State Intervention and the Labour Market in Transition Economies: Interpreting Mongolia’s Institutional Governance

This chapter examines Mongolia’s labour market governance within the broader framework of post-socialist transformation and hybrid capitalism. Rather than interpreting institutional shortcomings merely as failures, the chapter reframes Mongolia’s labour trajectory as shaped by the coexistence of formal legal regimes, informal institutional practices, and donor-dependent governance. Drawing from the Varieties of Capitalism (VoC) framework, Douglass C. North’s notion of institutions as “rules of the game,” and feminist critiques of welfare and labour regimes, it proposes an interpretive approach that centres around institutional hybridity, gendered exclusions, and symbolic state intervention. Mongolia is a case of fragmented institutional construct rather than a mere incomplete liberalisation, with partial enforcement, residual welfare provisions and informal employment from which a distinct model of post-socialist governance has emerged. In order to make the case that Mongolia’s labour regime reflects the conflicts of informal adaptation, gendered institutional legacies, and donor dependency, the chapter examines employment protection, wage regulation, trade union dynamics, and active labour market policies (ALMPs). Ultimately, it contributes to a further understanding of institutional pluralism, inclusion failures, and governance ambiguity in emerging capitalist economies.