Varieties of Capitalism and Institutional complementarities in the political economy
British Journal of Political Science 39 (2009) pp449-482This article provides a new framework for understanding the differences and similarities in economic and political institutions across developing countries, and aims on going beyond the three perspectives of institutional variance that have dominated studies on this topic for many years:Modernization approach (1965), developing economies were modernizing industries however still dominated by pre-war practices to secure high growth rates.Neo-corporatism (1970), states were able to bargain with employers and movements about wages, working conditions etc. Mass production economies.Social system of production (1990), more attention to the behaviour of firms. Sectoral government, national innovation systems, new ways of production.Where the authors fundamental break with these approaches, is how behaviour is affected by the institutions of the political economy. Three frameworks that visualise these relationship:Institutions are socializing institutions that instill a particular set of attitudes and norms in those who operate within themThe effects of institutions follow from the power they confer to particular actors through sanctions the hierarchy supplies or resources it hasInstitutions of the political economy are a matrix of sanctions and incentives, where to actors react and respond predictable The firm is seen as an entity with ultimately relational capabilities, that need proper coordination to be effective and successful. The main relations a firm must coordinate are:Industrial relations, how to coordinate bargaining over working conditions of the labor forceVocational training and education, securing the workforce and investing in skillsCorporate governance, secure return on investmentInter-firm relations, relations with other enterprises...
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