According to most nationalist fairytales fluttered around throughout history in the CEE countries a nation should be modern, urbanized and economically flourishing in its motherland (mimicking what nation-forgers “observed” about Western nations). When this story was being popularized in Easter-Central Europe on the ground the situation was radically different (with some exceptions as the Czech Republic): rural predominance, an urban environment whose elites where more often than not foreign (Jewish, German and other groups) and a problematic level of industrialization gravitating around natural resource exploitation. However, both under the nation-building impetuus of the interwar state-makers and under the communist iron fist urban biases and urbanization phenomena seem to have been common denominators of economic and social policies (with some lingering elements that can be observed even today). Building on Michael Lipton‘s seminal work, I attempt in this brief overview to look at some aspects concering urban biases in order to gauge their outcome: “success” (whatever that might mean!) or perverse/jeopardy effect (to use the framework of Hirschman). I will further narrow down my attemp by approaching this problem from the perspective of welfare-centered policies. Although in-depth studies have already shown that the label “CEE countries” greatly hides some of the fascinating differences between these states, for argument’s sake I will adopt a collective-centered approach here in order to better highlight the central point.

The interwar – nationalism qua modernization

It is already fermly established that interwar nation-building projects were more often than not solutions to the general problem of “backwardness”. It is at this step that we already start to see a specific pathway opened, one that apparently dissonates from the socio-demographic reality of CEE countries: Bismarkian urban-biased, income inequality entrenching welfare-schemes (for full scholarly overview I recommend Vanhuysse&Cerami:2009, also Inglot:2008). For early nation-builders an urban biased welfare-state laced with nationalistic overtones was supposed to generate upward mobility and increase rural-urban migration. However, much of the data collected thus far suggests that in reality this did not happen (Kaser&Radice:1986), at least not “according to plan”. The most observable phenomenon was indeed as Lipton suggests, a “capital city bias”, while urban development only blossomed in particular contigencies (i.e. oil fields, mining tows etc.). This fits the pattern of a top-down nation-building project: it was the capital that appointed bureaucrats, the capital that offered the main economic market and transportation hub etc. More disturbingly perhaps, instead of a rural-urban migration urban biases disenfranchised the lower peasantry which found itself unable to cope: the upper stratum of the peasantry managed to almost monopolize trade relationships with cities, With peasants excluded from the early Bismarkian welfare schemes in reality urban biased policies generated a widening of poverty gaps. However, it is extremely important to mention than on a nationalistic scale of values the urban bias was a “success”: the ethnic core was strengthened from its relative deprivation towards certain minorities that comprised large sectors of urban millieus.

The communist age – a story of forced urbanization

With a radical reshaping project in mind, communist state-makers in CEE countries commonly went into an accelerated urbanization process, coupled with intense industrialization that did not always have a solid economic backing. The artificial blossoming that follows did eventually lead to urban dwellers outnumbering rural inhabitants but at a steep cost: overcrowding, cities entirely depending on one overgrown factory, the creation out of the blue of a new social strata (modernization through cognitive dissonance comes to mind here) etc. If in the interwar urban bias often meant a complete lack of resources distributed to rural enviroments (in terms of capital and human resources), the communist urban bias which offered rather generous resources to rural areas greatly overstretched the economic possibilities of most CEE countries and continued to entrench some of the equalities inherited (bureaucrats, army members and heavy industrial workers to give some examples analyzed in the literature (Vanhuysse&Cerami:2009, ch. by Szikra and Tomka). Up to a point urbanization and industrialization in this guise did generate some economic growth, though once the economic shocks started to be felt by the COMECON countries it all went downhill. Full employment that was meant as a basis for a universal welfare coverage (though not in the classical sense of Nordic universalism) created state-dependency. As regimes grew more politically rigid, informal black-market “welfare” started to appear.

The post-socialist era: path-dependency of path-breaking?

The post-socialist setting seems to be torn between two main ideas: the desired neo-liberalization of welfare policies on the one hand, and the extremely high importance of welfare-policies for political gains (the typical strategy of divide&pacify, Vanhuysse:2004). Interestingly enough a sort of “contigency” neo-liberalization did occur – retrenchenment of benefits due to sheer lack of resources was masked to a certain extent as a move towards the more internationally-preferred (to be read as preferred by creditors such as IMF and World Bank) liberal model of welfare. It is this precarious economic state that generates again a high imbalance in resource allocation between rural and urban environments, although on paper this is not designed as intentional. What is more, a backlash effect of communist urbanization consisted in an inverse migration trend where rather large numbers of individuals returned to villages due to the worsening state of the economy. From a welfare-regime type of perspective, it is extremely hard to argue whether urban-biased is still strong as an element of path-dependency or whether the tide is changing. On a certain level even the most moderate attempt at a liberal-inspired welfare-regime might seem an element of path-breaking though again it is hard to give a verdict as these reforms seem tied down to the specific contingencies of each country, more powerful than their character of an overarching trend.

All things considered, Pierson’s fundamental definition of path-depdency as a Polya-urn effect (Pierson:1996) seems to fit perfectly the present overview of urban bias in CEE countries. Based on some of the arguments present in the literature, I would disagree with the more radical tone of Lipton’s opus that urban biases are a cause of entrenching poverty, but nuance it by arguing that under specific spells of modernization the result of pro-urban biases was partially perverse from an economic point of view, but successful from a nation-building-national-pride style of argument which up to a point masked the resource-allocation problems. The strong footing that some liberal-oriented reforms have gained underlines the idea that a rigid path-dependent reading of urban bias might not be the optimal lens of analysis. Path-breaking policies will of course though require future developments for a better observation.

Image Source: Daily News