An Introduction to Varieties of Capitalism (Peter Hall)
Abstract: This chapter outlines the theoretical perspective behind a varieties of capitalism' approach to comparative political economy, emphasizing the central role of the firm as the agent of economic adjustment and the impact of the relationships it forms in the spheres of corporate governance, labor relations, skill formation, inter-corporate relations, and employeremployee relations. It develops the distinction between liberal market economies, where firm endeavours are coordinated primarily by markets, and coordinated market economies, where coordination is more heavily strategic, and explores how the institutional complementarities in these economies give rise to distinctive forms of innovation as well as comparative institutional advantages that condition the response of firms and national governments both to globalization and to the dilemmas they face in the realms of economic and social policy-making.
Keywords: comparative institutional advantage, comparative political economy, coordination, economic adjustment, economic policy, globalization, institutional complementarities, skills, social policy, varieties of capitalism
1.1 Introduction
Political economists have always been interested in the differences in economic and political institutions that occur across countries. Some regard these differences as deviations from best practice' that will dissolve as nations catch up to a technological or organizational leader. Others see them as the distillation of more durable historical choices for a specific kind of society, since economic institutions condition levels of social protection, the distribution of income, and the availability of collective goodsfeatures of the social solidarity of a nation. In each case, comparative political economy revolves around the conceptual frameworks used to understand institutional variation across nations.
On such frameworks depend the answers to a range of important questions. Some are policy-related. What kind of
Keywords: comparative institutional advantage, comparative political economy, coordination, economic adjustment, economic policy, globalization, institutional complementarities, skills, social policy, varieties of capitalism
1.1 Introduction
Political economists have always been interested in the differences in economic and political institutions that occur across countries. Some regard these differences as deviations from best practice' that will dissolve as nations catch up to a technological or organizational leader. Others see them as the distillation of more durable historical choices for a specific kind of society, since economic institutions condition levels of social protection, the distribution of income, and the availability of collective goodsfeatures of the social solidarity of a nation. In each case, comparative political economy revolves around the conceptual frameworks used to understand institutional variation across nations.
On such frameworks depend the answers to a range of important questions. Some are policy-related. What kind of