Liutauras Gudžinskas (Vilnius Uni versity)
This paper deals with the development of welfare policies in Baltic countries. Welfare state development is analysed as a part of an ongoing process of postcommunist transformation of these societies. It is a complex, slow-moving and even more controversial process than other transitional processes such as liberalization or democratization. A more detailed analysis of healthcare reforms in Latvia, Lithuania and Estonia shows that despite many similarities there are important differences in how and when these reforms have been enacted and the results they have brought. While Estonia made path-breaking decisions to reform the Soviet system of healthcare by introducing compulsory social insurance even before its official declaration independence, other Baltic countries significantly lagged behind by choosing to continue with the Soviet system of financing healthcare from the general budget. Due to different early decisions there have been important divergences in terms of how the healthcare systems have been effective in achieving their main goals and how they have been prevented from fiscal shocks, development of political patronage ties, and institutionalisation of informal payments. In addition to the comparative historical analysis, the paper will explain why different trajectories among these countries were chosen. It will also try to compare whether the same tendencies can be detected with other major welfare policies (such as education and social security), and it will discuss the broader implications for the effective functioning of the state in these countries.