| The economies of the European former Soviet Union were dependent upon energy subsidies in the form of virtually free oil and natural gas imports from Russia, the loss of which implied dramatic shocks to domestic production structures, and the maintenance of which implied continued policy concessions to Russia. Yet some of these states actively pursued integration into the global economy while others sought to maintain the shelter of domestic markets and Russian energy subsidies. While the economic costs of openness and restructuring would be high in all cases in the short term, it is the political costs of openness and restructuring that determine the policy of the state. Where the high costs of restructuring are borne by a politically disenfranchised group, a consensus coalition can emerge in favor of rapid restructuring and energy reorientation. Where the benefits of the status quo accrue to a well-organized coalition closely allied with the state, a consensus coalition emerges in favor of maintenance of energy subsidies from and political relationship with Russia. Where the costs of restructuring are borne broadly or by a well-organized minority group, power oscillation and fragmentation will lead to inconsistent policy and slow progress toward energy reorientation and reform.; Integrating a state-in-society approach to coalition formation within the field of international political economy, the author argues that states dominated by globalist-liberalizing-nationalist coalitions were able to implement energy trade reorientation by politically disenfranchising the ethnic minorities who populated the sector most vulnerable to energy contraction, heavy industry. These "globalizers," Estonia and Latvia, bore the high costs of restructuring industries and importing energy at world prices. Belarus, dominated by pro-Moscow-statist-leftist coalitions, sought to preserve energy subsidies through political and economic reintegration with Russia. States ruled by divided governments or an oscillation of power failed to implement either policy consistently, resulting in continued energy dependence on Russia. Lithuania, Moldova, and Ukraine, the "hybrids," sought to limit their energy dependence on Russia, but could not meet their energy needs at world-market prices. They remained dependent on Russian energy, while struggling toward energy trade diversification. |
