Between Historical Legacies and the Politics of Nation-Building: Explaining Variance in Social Investment Agendas Across the Baltic States

This paper accounts for the variation in social investment agendas implemented across the three Baltic states – Estonia, Latvia and Lithuania – since the onset of post-socialist transition in 1990. In order to explain this variation, I focus on the different legacies of Russian influence in the three countries and the types of politics of nation-building they pursued following the collapse of the Soviet Union. The paper contributes to our understanding of how historical path dependencies, in interaction with the political discourse that surrounds them, can affect the implementation of the social investment agenda. Using theory-building process tracing methodology, I show that: 1) Estonia was the most successful of the three countries in the implementation of the social investment agenda because it leveraged its future-oriented logic of welfare to produce a constructive public discourse and stabilise the political process. This served to marginalise the influence of its Russian minority, which formed above 30% of the country’s population and was the biggest loser of transition, in a non-conflictual manner. 2) Latvia followed Estonia, but the political process was more conflict ridden because of the stronger economic and political influence of its large Russian minority. Thus, less progress was made in the implementation of the social investment agenda. 3) Lithuania made the least progress in the implementation of the social investment agenda because of its emphasis on political and economic compensation of the Russian minority as the key loser of transition.