Economic Crisis Adjustment Strategy: An Investigation of the Institutional Determinants of Domestic Adjustment Policy Selection in Estonia and Slovenia

This thesis investigates the domestic institutional factors that account for cross-national differences in economic crisis adjustment strategy. It explores how the political-institutional features of Estonia and Slovenia restrained or encouraged certain policy responses to the 2008 recession. After demonstrating the divergent strategies of each – namely austerity for Estonia and stimulus for Slovenia – a comparative historical analysis is presented as a potential explanatory framework. The case studies presented provide some evidence that past institutional choices, and their subsequent political consequences, may impact the available options for future crisis adjustment policy. Therefore, Estonia's and Slovenia's opposing policy choices during the 2008 crisis could be explained by their divergent institutional design strategies implemented when each country made the transition from communism/socialism to capitalism. This project also presents a way to analyze austerity and stimulus policies and aims to contribute to theory-building about the distributional consequences – intended and unintended – of each adjustment strategy.