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The Role of Europeanisation and History in Shaping Contemporary Baltic Welfare States: Path Dependence vs. Policy Diffusion

Liutauras Gudzinskas
Vilnius University
Liutauras Gudzinskas
Vilnius University

Abstract

The analysis is mostly focused on the development of welfare states of postcommunist Baltic countries, although the situation of other postcommunist EU member states will also be presented for comparative needs. The main focus of analysis is on the development of healthcare. Despite similar initial circumstances after regained independence, the time, speed and achieved results reforming health system significantly differ between these states. Estonia introduced compulsory health insurance already in 1991 thus crucially reforming financing of healthcare. It secured health budget from general economic downturn, allowed to early optimise over-extensive network of healthcare institutions, and also to delimit politicisation. In other Baltic countries there were also plans to introduce compulsory health insurance, but these plans were implemented only partially and during a long period of time (in Lithuania) or they were overall abandoned (in Latvia). Therefore, the system remained dependent upon general processes of fiscal policy, more sensible to economic fluctuations and political pressure. Accordingly, results of health systems differ by many important parameters. The EU membership should have affected these long-term trends. Method of open coordination at European level and the increasing integration into transnational “epistemic communities” have widened cognitive capabilities of state institutions to learn from made mistakes and introduce needed policy changes. However, the institutionalised power relations among main actors as well as increasing global competition pose their own challenges for welfare state, which may in turn reinforce diverging trends among countries in region.