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Paper short abstract

The paper analyzes how great power rivalry reshapes post socialist middle income economies. Through a QCA of the Visegrád Four and five Central Asian states, it shows how institutional integration and external alignment shape divergent paths amid EU friendshoring and multi vector alignment.

Paper long abstract

Great power rivalry is reconfiguring the development of post socialist countries through intensified geoeconomic power projection, compelling middle-income economies to recalibrate their development strategies. This paper explores how the European Union’s Green Deal, the U.S. Inflation Reduction and CHIPS Acts, China’s Belt and Road Initiative, and Russia’s Eurasian Economic Union reshape the industrial upgrading trajectories of those countries. Using Qualitative Comparative Analysis (QCA), we compare Central Europe’s Visegrád Four and Central Asia’s five states (n=9) to identify how different combinations of institutional integration and external alignment produce divergent adaptation paths amid geopolitical fragmentation.

Findings indicate that EU integration has embedded the V4 within transnational production networks via subsidies, regulatory harmonization, and investment incentives. Yet such friendshoring and de-risking practices have reinforced dependent upgrading, constraining domestic innovation and deepening the reliance on foreign capital and technology. In contrast, Central Asian states’ long standing multi vector diplomacy—once an effective balancing strategy—has become a high-risk alignment under sanctions, infrastructure competition, and rival geoeconomic instruments. The overlap of major power initiatives generates institutional friction, fragmented governance, and renewed middle income trap pressures.

The study argues that when post-socialist middle-income countries remain unable to act as institutional architects capable of redesigning the rules of industrial transformation under great-power rivalry, they face structural limits to growth and constrained trajectories of industrial upgrading.