Determinants of Economic Fragility in Central and Eastern European Countries FsQCA Approach

Katarzyna Boratynska
European Research Studies Journal, Volume XXIV, Issue 3B, 827-837, 2021
DOI: 10.35808/ersj/2541


Purpose: This study aims to identify the main drivers of economic fragility in Central and Eastern European countries (CEECs). Design/Methodology/Approach: This study focuses on the FsQCA (Fuzzy set Qualitative Comparative Analysis) approach in economic fragility and crisis research. The study concentrates on implementing the FsQCA method to identify and evaluate the main drivers of financial fragility in CEECs based on Fragile States Index data. The research covers 2020. Findings: The research indicates and examines the main reasons for economic fragility in CEECs, e.g., economic decline, uneven economic development, unemployment rate, demographic pressure, government debt, bankruptcy declarations. As a result of the financial crisis and anti-fragility measures, the national budget deficit is growing. Its reduction will be one of the main tasks of the post-crisis period. It points out that anti-crisis actions can create conditions for promoting the zombie-ing of the economy by their nature. Practical Implications: The economic crisis manifested itself in the fact that many countries, including the USA, China, and most CEECs, suspended their economies. The lockdown of economic activity directly affected the real sector of the economy. Identifying factors that determine the main drivers of financial fragility may constitute practical recommendations for public managers in creating recovery measures during the Covid-19 pandemic. The Fragile States Index, analyzed in the article, can be helpful tools for practice, warning against failures at the level of economies. Originality/Value: This article shows how a FsQCA approach can overcome the knowledge gap of current conceptual and methodological attempts to expose economic fragility’s architecture of causalities. FsQCA is a valuable tool for economic fragility evaluation. Finally, the results may also serve as a basis for further research into economic and financial fragility.

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