Hostname: page-component-cd9895bd7-dk4vv Total loading time: 0 Render date: 2024-12-24T02:53:52.478Z Has data issue: false hasContentIssue false
  • English
  • Français

The agency of reformers in new European financial centres: A historically informed financial geography

Published online by Cambridge University Press:  09 November 2023

Tom Hashimoto
Tom Hashimoto*
Affiliation:
ISM University of Management and Economics, Lithuania
*
Corresponding author: Tom Hashimoto, ISM University of Management and Economics, Arklių g. 18, Vilnius 01305, Lithuania. Email: [email protected].
Rights & Permissions [Opens in a new window]

Abstract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

While institutional frameworks are the dominant approach to analysing the geography of finance, this article focuses on how individual policymakers influence the characteristics of financial institutions and set, or even alter, financial centre development. The historical narratives from Central and Eastern Europe (CEE) that this article presents reveal postsocialist reformers’ contrasting philosophies and approaches, despite their shared goals of market liberalisation and European integration. These reforms (or lack thereof) differentiated the securities markets in Warsaw, Prague, and Budapest, especially with respect to financial intermediary mechanisms. Although the legacies of such reforms continue to shape an uneven landscape of financial centres in CEE, this article proposes reformer-centred narratives as an alternative to deterministic institutional thinking. The article argues that historical narratives that foreground the actions and ideas of key policymakers need to be included in the observation framework of financial centre development, in a similar way to how scholars analyse foreign policy by focusing on the heads of governments and ministers.

Keywords

Agencypolicymakersfinancial historyCentral and Eastern Europefinancial centres
Type
Article
Information
Finance and Society , Volume 7 , Issue 1 , 2021 , pp. 57 - 75
Creative Commons
Creative Common License - CCCreative Common License - BYCreative Common License - NCCreative Common License - ND
This is an Open Access article, distributed under the terms of the Creative Commons Attribution-NonCommercial-No Derivatives licence (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits noncommercial re-use, distribution, and reproduction in any medium, provided the original work is unaltered and is properly cited. The written permission of Cambridge University Press must be obtained for commercial re-use or in order to create a derivative work.
Copyright
© 2021 The Author(s)

References

Aghion, P. and Blanchard, O.J. (1994) On the speed of transition in Central Europe. NBER Macroeconomics Annual, 9: 283–330.CrossRefGoogle Scholar
Akbar, Y.H., Elms, H. and Dhakar, T.S. (2006) Foreign direct investment, stock exchange development, and economic growth in Central and Eastern Europe. In: Batten, J.A. and Kearney, C. (eds.) Emerging European Financial Markets: Independence and Integration Post-Enlargement. Oxford: Elsevier, 461–72.Google Scholar
Alfaro, L., Chanda, A., Kalemli-Ozcan, S. and Sayek, S. (2004) FDI and economic growth: The role of local financial markets. Journal of International Economics, 64(1): 89–112.CrossRefGoogle Scholar
Amin, A. and Thrift, N. (1992) Neo-Marshallian nodes in global networks. International Journal of Urban and Regional Research, 16(4): 571–87.CrossRefGoogle Scholar
Amin, A. and Thrift, N. (2017) Seeing Like a City. Cambridge: Polity.Google Scholar
Ábel, I. (1999) Hungary. In: Helmenstein, C. (ed.) Capital Markets in Central and Eastern Europe. Cheltenham: Edward Elgar, 109–28.Google Scholar
Åslund, A. (2013) How Capitalism was Built: The Transformation of Central and Eastern Europe, Russia, the Caucasus, and Central Asia. Second edition. Cambridge: Cambridge University Press.Google Scholar
Balcerowicz, L. (2002) Post-Communist Transition: Some Lessons. London: Institute of Economic Affairs.Google Scholar
Benes, V. and Karlas, J. (2010) The Czech presidency. Journal of Common Market Studies, 48 (Annual Review): 69–80.CrossRefGoogle Scholar
Blommestein, E.T. (1998) Overview: The development of securities markets in transition economies: Policy issues and country experience. In: OECD (ed.) Capital Market Development in Transition Economies: Country Experiences and Policies for the Future. Paris: OECD Centre for Co-operation with Non-Members, 13–34.Google Scholar
Błaszczyk, B., Górzyński, M., Kamiński, T. and Paczóski, B. (2003) Poland II: Ownership and performance of the National Investment Funds and their portfolio companies. In: Błaszczyk, B., Hoshi, I. and Woodward, R. (eds.) Secondary Privatisation in Transition Economies: The Evolution of Enterprise Ownership in the Czech Republic, Poland and Slovenia. Basingstoke: Palgrave Macmillan, 123–69.CrossRefGoogle Scholar
Bonin, J.P. and Schaffer, M.E. (2002) Revisiting Hungary's bankruptcy episode. In: Meyendorff, A. and Thakor, A.V. (eds.) Designing Financial Systems in Transition Economies. London: MIT, 59–99.Google Scholar
Brenner, N. (1998) Global cities, global states: Global city formation and state territorial restructuring in contemporary Europe. Review of International Political Economy, 5(1): 1–37.CrossRefGoogle Scholar
Brenner, N., Madden, D.J. and Wachsmuth, D. (2011) Assemblage urbanism and the challenges of critical urban theory. City, 15(2): 225–40.CrossRefGoogle Scholar
Buckley, N. (2014) Hungary cannot bank on state ownership. Financial Times, 10 December.Google Scholar
Cassis, Y. (2006) Capitals of Capital: A History of International Financial Centres, 1780-2005. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Cassis, Y. and Wójcik, D. (eds.) (2018) International Financial Centres after the Global Financial Crisis and Brexit. Oxford: Oxford University Press.CrossRefGoogle Scholar
Castells, M. (2010) The Rise of the Network Society. Second edition. Chichester: Wiley-Blackwell.Google Scholar
Cave, T. (2013) Warsaw Stock Exchange and Aquis: Unlikely bedfellows. e-Financial News, 19 August. Available at: <http://www.efinancialnews.com/story/2013-08-19/the-warsaw-sock-exchange-and-qquis-are-unlikely-bedfellows>. Accessed 8 September 2020..+Accessed+8+September+2020.>Google Scholar
Chi, J. and Young, M. (2006) The development of financial derivatives markets in an expanded EU. In: Batten, J.A. and Kearney, C. (eds.) Emerging European Financial Markets: Independence and Integration Post-Enlargement. Oxford: Elsevier, 215–34.Google Scholar
Cieński, J. (2013) Stock exchanges: Sound of overtures in Warsaw and Vienna. Financial Times, 9 May.Google Scholar
Clark, G.L. (2003) European Pensions and Global Finance. Oxford: Oxford University Press.CrossRefGoogle Scholar
Clark, G.L. (2000) Pension Fund Capitalism. Oxford: Oxford University Press.Google Scholar
Davies, N. (2001) Heart of Europe: The Past in Poland's Present. Oxford: Oxford University Press.Google Scholar
Dlouhy, M. (2002) Czech privatization: A ten-year overview. White & Case. Available at: <http://www.whitecase.com/Publications/Detail.aspx?publication=211#.VRRUN_zF8rU>. Accessed 8 September 2020..+Accessed+8+September+2020.>Google Scholar
Dunford, M. (2005) Old Europe, new Europe and the USA: Comparative economic performance, inequality and market-led models of development. European Urban and Regional Studies, 12(2): 149–76.CrossRefGoogle Scholar
Epstein, R.A. (2008) In Pursuit of Liberalism: International Institutions in Postcommunist Europe. Baltimore, MD: John Hopkins University Press.CrossRefGoogle Scholar
Fischer, S., Sahay, R. and Végh, C.A. (1996) Stabilization and growth in transition economies: The early experience. Journal of Economic Perspectives, 10(2): 45–66.CrossRefGoogle Scholar
Friedmann, J. (1986) The world city hypothesis. Development and Change, 17(1): 69–83.CrossRefGoogle Scholar
Gál, Z. (2010a) Miért nem lett Budapest a kelet-közép-európai régió pénzügyi központja? Budapest pénzintézeti szerepköre az ezredfordulón (Why did not Budapest become the regional financial centre of Central and Eastern Europe? Financial centre functions of Budapest at the millennium). In: Barta, G., Keresztély, K. and Sipos, A. (eds.) A ‘világváros’ Budapest két századfordulón (The ‘World City’ Budapest at the Turn of the Two Centuries). Budapest: Napvilág Kiadó, 137–65.Google Scholar
Gál, Z. (2010b) Nemzeti pénzügyi központ nemzetközi ambíciókkal: Budapest pénzintézeti szerepköre a 19-20. század fordulóján (National financial centre with international ambitions: Financial centre functions of Budapest at the turn of the 19th and 20th Centuries). In: Barta, G., Keresztély, K. and Sipos, A. (eds.) A ‘világváros’ Budapest két századfordulón (The ‘World City’ Budapest at the Turn of the Two Centuries). Budapest: Napvilág Kiadó, 87–118.Google Scholar
Gelos, G. and Sahay, R. (2000) Financial market spillovers in transition economies. IMF Working Paper Series, WP/00/71.CrossRefGoogle Scholar
Glaeser, E.L., Johnson, S. and Shleifer, A. (2001) Coase versus the Coasians. Quarterly Journal of Economics, 116(3): 853–99.CrossRefGoogle Scholar
Gomułka, S. and Jasiński, P. (1994) Privatization in Poland 1989-1993: Policies, methods, and results. In: Estrin, S. (ed.) Privatization in Central and Eastern Europe. London: Longman, 218–51.Google Scholar
Gomułka, S. and Kowalik, T. (2011) Transformacja polska: dokumenty i analizy 1990 (Transformation of Poland: Documents and Analyses 1990). Warsaw: Wydawnictwo Naukowe Scholar.Google Scholar
Griffith-Jones, S. (1995) Introductory framework. In: Griffith-Jones, S. and Drábek, Z. (eds.) Financial Reform in Central and Eastern Europe. London: St. Martin's Press, 3–15.CrossRefGoogle Scholar
Hall, P.A. and Thelen, K. (2009) Institutional change in varieties of capitalism. Socio-Economic Review, 7(1): 7–34.CrossRefGoogle Scholar
Hancké, B., Rhodes, M. and Thatcher, M. (2009) Beyond varieties of capitalism. In: Hancké, B. (ed.) Debating Varieties of Capitalism: A Reader. Oxford: Oxford University Press, 273–300.Google Scholar
Hanousek, J. and Němeček, L. (2002) Mispricing and lasting arbitrage between parallel markets in the Czech Republic. European Journal of Finance, 8(1): 46–69.CrossRefGoogle Scholar
Harrison, B. and Moore, W. (2010) Non-linear stock market co-movement in Central and East European Countries. In: Matousek, R. (ed.) Money, Banking and Financial Markets in Central and Eastern Europe: 20 Years of Transition. Basingstoke: Palgrave Macmillan, 119–38.Google Scholar
Hashi, I. (2000) The Polish National Investment Fund programme: Mass privatisation with a difference. Comparative Economic Studies, 42(1): 87–134.CrossRefGoogle Scholar
Hlaváček, J. and Mejstřík, M. (1997) The initial economic environment for privatization. In: Mejstřík, M. (ed.) The Privatization Process in East-Central Europe: Evolutionary Process of Czech Privatizations. Dordrecht: Kluwer, 1–32.Google Scholar
Iglewski, J. (2014) UPDATE 1-Polish bourse says no longer interested in tie-up with Vienna. Reuters, 23 September.CrossRefGoogle Scholar
Ježek, T. (2006) Privatizace české ekonomiky: její kořeny, metody a výsledky (Privatisation of the Czech Economy: Its Origins, Methods and Results). Prague: Vysoká škola ekonomická v Praze.Google Scholar
Kang, N.-H. (2006) A critique of the ‘varieties of capitalism’ approach. International Centre for Corporate Social Responsibility Research Paper Series 45, Nottingham University Business School.Google Scholar
Kindleberger, C. P. (1984) A Financial History of Western Europe. London: George, Allen & Unwin.Google Scholar
King, L.P. and Szelényi, I. (2005) Post-communist economic systems. In: Smelser, N.J. and Swedberg, R. (eds.) The Handbook of Economic Sociology. Princeton, NJ: Princeton University Press, 205–29.Google Scholar
Kokoszczyński, R. (1999) Poland. In: Helmenstein, C. (ed.) Capital Markets in Central and Eastern Europe. Cheltenham: Edward Elgar, 148–62.Google Scholar
Kouwenberg, R. and Mentink, A. (2006) The links between Central, East European and Western security markets. In: Batten, J.A. and Kearney, C. (eds) Emerging European Financial Markets: Independence and Integration Post-Enlargement. Oxford: Elsevier, 353–81.Google Scholar
Kozarzewski, P. and Woodward, R. (2003) Poland I: Ownership and performance of firms privatised by management-employee buyouts. In: Błaszczyk, B., Hoshi, I. and Woodward, R. (eds.) Secondary Privatisation in Transition Economies: The Evolution of Enterprise Ownership in the Czech Republic, Poland and Slovenia. Basingstoke: Palgrave Macmillan, 91–122.Google Scholar
Kraakman, R., Davies, P., Hansmann, H. et al. (2009) The Anatomy of Corporate Law: A Comparative and Functional Approach. Second edition. Oxford: Oxford University Press.Google Scholar
Krištoufek, L. (2010) Efficiency, persistence and predictability of Central European stock markets. In: Matousek, R. (ed.) Money, Banking and Financial Markets in Central and Eastern Europe: 20 Years of Transition. Basingstoke: Palgrave Macmillan, 98–118.CrossRefGoogle Scholar
Laca, P. and Chamonikolas, K. (2013) Czech push to lure hedge funds eyes Luxembourg not Cyprus. Bloomberg, 26 April.Google Scholar
Lavigne, M. (1996) The Economics of Transition: From Socialist Economy to Market Economy. Basingstoke: Palgrave Macmillan.Google Scholar
Lewandowski, J. and Szyszko, R. (1999) The governance of privatization funds in Poland. In: Simoneti, M., Estrin, S. and Böhm, A. (eds.) The Governance of Privatization Funds: Experiences of the Czech Republic, Poland and Slovenia. Cheltenham: Edward Elgar, 44–71.CrossRefGoogle Scholar
McFarlane, C. (2011) Assemblage and critical urbanism. City, 15(2): 204–24.CrossRefGoogle Scholar
Mejstřík, M. (1997) Large privatization: Theory and practice. In: Mejstřík, M. (ed.) The Privatization Process in East-Central Europe: Evolutionary Process of Czech Privatizations. Dordrecht: Kluwer, 55–124.CrossRefGoogle Scholar
Mihaljek, D. (2010) The spread of the financial crisis to Central and Eastern Europe: Evidence from the BIS data. In: Matousek, R. (ed.) Money, Banking and Financial Markets in Central and Eastern Europe: 20 Years of Transition. Basingstoke: Palgrave Macmillan, 5–31.CrossRefGoogle Scholar
Mitchell, J.C. Jr (2003) Recapitalization of Banks in Transition Economies: Poland and Hungary in the New Market Economy. Bloomington, IN: First Books.Google Scholar
Musílek, P. (1998) Development of financial markets: The Czech case. In: Larçon, J.-P. (ed.) Entrepreneurship and Economic Transition in Central Europe. Dordrecht: Kluwer, 57–70.CrossRefGoogle Scholar
Myant, M. (2007) The Czech Republic: From ‘Czech’ capitalism to ‘European’ capitalism. In: Lane, D. and Myant, M. (eds.) Varieties of Capitalism in Post-Communist Countries. Basingstoke: Palgrave Macmillan, 105–23.Google Scholar
Mykhnenko, V. (2007a) Poland and Ukraine: Institutional structures and economic performance. In: Lane, D. and Myant, M. (eds.) Varieties of Capitalism in Post-Communist Countries. Basingstoke: Palgrave Macmillan, 124–45.Google Scholar
Mykhnenko, V. (2007b) Strengths and weaknesses of ‘weak’ coordination: Economic institutions, revealed comparative advantages, and socio-economic performance of mixed market economies in Poland and Ukraine. In: Hancké, B., Rhodes, M. and Thatcher, M. (eds.) Beyond Varieties of Capitalism: Conflict, Contradictions, and Complementarities in the European Economy. Oxford: Oxford University Press, 351–78.Google Scholar
Naczyk, M. and Palier, B. (2013) Feed the beast: Finance capitalism and the spread of pension privatization in Europe. Unpublished conference paper. Available at: <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2551521>. Accessed 8 September 2020..+Accessed+8+September+2020.>Google Scholar
Oręziak, L. (2014) OFE: katastrofa prywatyzacji emerytur w Polsce (Pension Funds: Disaster of Pension Privatisation in Poland). Warsaw: Książka i Prasa.Google Scholar
Pavlínek, P. (2004) Regional development implications of foreign direct investment in Central Europe. European Urban and Regional Studies, 11(1): 47–70.CrossRefGoogle Scholar
Pick, P.J. (1992) Privatizing privatization: The Czech experience. Arthur D. Little. Available at: <https://www.adlittle.com/sites/default/files/prism/1992_q3_17-19.pdf>. Accessed 8 September 2020..+Accessed+8+September+2020.>Google Scholar
Pithart, P. (2011) Škoda byla jen jedna, škoda (Škoda was only one, Škoda). Hospodářské noviny, 15 April. Reprinted in Petr Pithart Archiv textů. Available at: <http://www.pithart.cz/archiv_textu_detail.pp?id=489>. Accessed 8 September 2020.Google Scholar
Pithart, P. (1994) Luncheon address delivered by former Prime Minister of the Czech Republic. In: Smit, H. and Pechota, V. (eds.) Privatization in Eastern Europe: Legal, Economic, and Social Aspects. Dordrecht: Martinus Nijhoff, 18–20.Google Scholar
Pokorný, M. (2002) Nejsem handlíř (I am not a trader). Respekt, 5 August. Available at: <http://respekt.ihned.cz/c1-36169530-nejsem-handlir>. Accessed 8 September 2020..+Accessed+8+September+2020.>Google Scholar
Rao, S. and Peto, S. (2015) After Hungary's Swiss franc mortgage manoeuvre, a nod to Orbanomics. Reuters, 26 January.Google Scholar
Santa, M. (2014) Czech Finance Minister open to Euro adoption, but consolidation a priority. Reuters, 11 March.Google Scholar
Shields, M. (2015) Raiffeisen Bank executive says Hungary unit lacks shareholder value. Reuters, 20 January.Google Scholar
Simoneti, M., Estrin, S. and Böhm, A. (eds.) (1999) The Governance of Privatization Funds: Experiences of the Czech Republic, Poland and Slovenia. Cheltenham: Edward Elgar.CrossRefGoogle Scholar
Sobczyk, M. and Kruk, M. (2010) Warsaw Stock Exchange IPO priced at top of range. Wall Street Journal, 29 October.Google Scholar
Stark, D. and Bruszt, L. (1998) Postsocialist Pathways: Transforming Politics and Property in East Central Europe. Cambridge: Cambridge University Press.Google Scholar
Storper, M. (2013) Keys to the City: How Economics, Institutions, Social Interaction, and Politics Shape Development. Princeton, NJ: Princeton University Press.Google Scholar
Storper, M. and Scott, A.J. (2016) Current debates in urban theory: A critical assessment. Urban Studies, 53(6): 1114–36.CrossRefGoogle Scholar
Szabadföldi, I. (2002) Final Report of the Conference on Budapest as a Regional Business Center. Budapest: Bancraft Kft. Available at: <http://www.bibca.net/docs/2001_Conference_final_report.pdf>. Accessed 8 September 2020.Google Scholar
Taylor, P.J. (2004) World City Network: A Global Urban Analysis. London: Routledge.CrossRefGoogle Scholar
Thompson, E. (2012) Warsaw Stock Exchange eclipsing Prague: Prague Exchange is being relegated to a marketing tool. Prague Post, 6 June.Google Scholar
Waldoch, M. (2011) Goldman Sachs opens Warsaw office, says Poland a ‘financial hub’. Bloomberg, 11 May.Google Scholar
Wallerstein, I. (1974) The Modern World-System: Capitalist Agriculture and the Origins of the European World-Economy in the Sixteenth Century. London: Academic Press.Google Scholar
Wójcik, D. (2011) The Global Stock Market: Issuers, Investors, and Intermediaries in an Uneven World. Oxford: Oxford University Press.CrossRefGoogle Scholar
Zemplinerová, A. and Laštovička, R. (1997) Enterprises restructuring during and after privatization. In: Mejstřík, M. (ed.) The Privatization Process in East-Central Europe: Evolutionary Process of Czech Privatizations. Dordrecht: Kluwer, 203–14.Google Scholar