Whereas the active role of the state in steering financialization is consensual in advanced economies, the financialization of emerging market economies is usually examined through the prism of dependency: this downplays the domestic political functions of financialization and the agency of the state. With the consolidation of state capitalist regimes in the semi-periphery after the Global Financial Crisis, different interpretations emerged – some linking state capitalism with de-financialization, others with coercive projects deepening it. Preferring a more granular and multi-dimensional approach, I analyse how different facets of financialization might represent political risks or opportunities for state capitalist projects: Based on the Hungarian example, I first explain how the constitution of a ‘financial vertical’ after 2010 inaugurated a new mode of statecraft. Second, I show how the financial vertical enabled rentier bargains between state and society after 2015 by deepening the financialization of social policy and housing in response to a looming crisis of competitiveness.

Due to its focus on high tech sectors and the role played by FDI, the literature dealing with developmental opportunities in Central and Eastern European (CEE) economies underestimates the room for domestic developmental agency. In this paper, we contrast diverging strategies of positioning the Polish and Hungarian dairy sector in European markets. In Hungary, 'outsourcing' the integration of fragmented producers to multinational corporations (MNCs) led to competitive downgrading, providing a fertile terrain for economic nationalism in the wake of the financial crisis. In Poland, a developmental alliance between state and farmers upgraded the competitiveness of domestic cooperatives under the constraint of EU accession. Contrary to narratives that describe passive competition states in CEE, we show that the domestic politics of developmental alliances determined whether EU integration resulted in the neoliberal outsourcing of development to MNCs or gave rise to a sector-level developmental state. Using the notion of dynamic institutional complementarity, we explore why lesser-developed countries with similar initial conditions diverge in developmental strategies and outcomes within the same transnational integration regime that imposes the same rules and provides the same opportunities to member states.