Showing papers in "Socio-economic Review in 2010"

The asymmetry of European integration: or why the EU cannot be a "Social Market Economy"

Abstract: Judge-made law has played a crucial role in the process of European integration. In the vertical dimension, it has greatly reduced the range of autonomous policy choices in the member states, and it has helped to expand the reach of European competences. At the same time, however, ‘integration through law’ does have a liberalizing and deregulatory impact on the socio-economic regimes of European Union member states. This effect is generally compatible with the status quo in liberal market economies, but it tends to undermine the institutions and policy legacies of Continental and Scandinavian social market economies. Given the high consensus requirements of European legislation, this structural asymmetry cannot be corrected through political action at the European level.

Comparing forest certification schemes: the case of ratcheting standards in the forest sector

Abstract: This project evaluates the factors driving improvement of industry-sponsored private regulatory standards under conditions of competition in three-country contexts between 1995 and 2005. The paper provides a comparative analysis of regulatory competition in forestry in the USA, Sweden and Finland. While previous research has identified the importance of transnational supply chain pressure and of NGOs’ direct targeting campaigns in diffusing and upgrading standards, this paper stresses the role of public comparison and environmental benchmarking that contributed to an upgrading of industry standards via competition between the Forest Stewardship Council and rival industry-sponsored schemes. The paper explores how transnational and national actors created important moments of public comparison in which substantive as well as accountability standards were ratcheted up while they diffused more broadly across industry. This project evaluates the role of environmental benchmarking in constructing and contesting the legitimacy of private regulation.

Globalization, labour power and partisan politics revisited

Abstract: This paper explores temporal variation in partisan effects on social spending growth in OECD countries over the period 1971–2002. We argue that partisan effects are jointly conditioned by globalization and the mobilizational capacity of organized labour. We present three main empirical findings. First, we show that partisan effects increased from the mid-1970s to the late 1980s and then disappeared in the 1990s. Second, we show that partisan effects rose with globalization in the 1970s and early 1980s, a period characterized by rising labour strength in many OECD countries, but this is not true for the post-1990 period, characterized by declining labour strength. Third, we show that globalization was associated with declining partisan effects in countries that experienced union decline in the 1980s and 1990s, but it was associated with rising partisan effects in countries in which unions remained strong.

Law, expertise and legitimacy in transnational economic governance: an introduction

Abstract: The increasing relevance of transnational governance for the regulation of cross-border economic relations in many public policy fields has given rise to debates about its legitimacy. This paper provides an introduction to normative and empirical approaches and suggests to bridge between them by exploring normative perspectives through the views and strategies of actors practically involved in transnational governance. Based on a synthesis of contributions from different fields of transnational governance, it is suggested that a perceived lack of fit between the regulators’ legitimacy claims and the addressees’ expectations, if expressed as protest and criticism by the latter, can lead transnational governance institutions to adjust to demands for more inclusiveness, expertise and procedural fairness. However, the rising level of expertise required from participants, stakeholders and publics to meet normative criteria for greater participation and procedural fairness creates new and yet unresolved problems.

A silent revolution? New management ideas and the reinvention of European public employment services

Abstract: Labour-market policy regimes are in flux, not only because of the introduction of activation policies but also because of changes in the governance of public employment services (PESs). This paper argues that PESs have been fundamentally transformed due to the ‘discovery’ of New Public Management ideas. In the European context, these ideas first emerged in the UK and Sweden, were subsequently diffused through the Organization for Economic Cooperation and Development and the European Union and then internalized by critical epistemic communities, including the network of the heads of PESs and the World Association of PESs. Through the acceptance, diffusion and internalization of these new management ideas, common governance practices, including performance, quality and case management, have been widely adopted in Europe. Policymakers have failed, however, to agree on a ‘best-practice’ model with respect to the local organization of labour-market policy delivery. Consequently, no hegemonic idea was established, and significant national differences continue to persist.

Right place, right time: serendipity and informal job matching

Abstract: Chance is a prominent feature in the processes by which people become aware of job openings, yet current theories—which emphasize the instrumental job search activities of workers—do not provide a framework for understanding the unsolicited receipt of job leads. The concept of serendipity is discussed as a way to understand the role that chance plays in informal job finding. Interviews with 42 workers in an engineering firm reveal that job information often comes from unlikely sources in unexpected situations. Moreover, nationally representative survey data are used to assess the non-random experience of serendipity, finding that personal, contextual and relational characteristics structure the unsolicited receipt of job leads. The results from this mixed methods approach help to supplement the current theories of job matching and offer a promising research agenda for future investigations of the conditions under which serendipitous job finding is likely to occur.

The legitimacy of private transnational governance: experts and the transnational market for force

Abstract: This paper explores the roles that experts, specialized systems of knowledge and law play in the legitimization of private transnational governance. Governance of the global political economy and society is increasingly being shaped by private actors, institutions and processes that operate transnationally, linking local and global orders through complex laws and regulatory arrangements. These private governance arrangements are legitimized through their claims to possess expert knowledge and authority. However, adopting the lenses of critical theory, this paper seeks to problematize the tendency to defer unquestioningly to expert opinion. It argues that uncritical deference to experts is symptomatic of deeper conditions that are linked to the dominant form that law takes under contemporary capitalism. This paper examines the nexus between knowledge and power and the specific place that experts have in the legitimization of private modes of governance under contemporary conditions of post-modern legality and late capitalism. It advances critical theory as an approach to understanding the significance of technological rationality and expert systems of knowledge in the reproduction of transnational capitalism and in the creation of space for greater reflexivity in governance and the enhancement of individual autonomy.

Legitimacy in financial markets: credit default swaps in the current crisis

Abstract: The current financial crisis appears to be a moment of epochal change, an archetypal ‘legitimation crisis’. This paper examines the impact of this collapse on one particular section of the financial markets that concerned with credit default swaps. This paper shows how and why the markets for these products expanded and why they were integral to the financial crash. The consequence of the crash was a huge loss of legitimacy for these markets. This paper examines the processes whereby this legitimacy is being reconstructed. In particular, it distinguishes between the re-establishment of pragmatic legitimacy, which is the primary concern of the market participants, and the re-establishment of broader political legitimacy, which concerns governments and regulators. It argues that these two forms of re-establishing legitimacy work in different ways and proceed at different rates. It explores the tensions to which this leads in terms of reconstructing the financial system.

Regulatory governance and the informal economy: cross-national comparisons

Abstract: This article examines the relationship between state regulation and the informal economy at the macro-level across a broad set of countries. The analysis shows (a) that countries have different types of regulatory environments—varying by the degree of state regulation of economic activity—and the degree to which the state implements and enforces the existing regulations—and (b) that this variation helps explain why some nations have more informal economic activity than others. The findings also suggest that (c) contrary to what the neoliberal orthodoxy has prescribed over the past few decades, decreasing the degree of state regulation in the economy will not necessarily formalize the economy. The degree of regulation seems to have a significant association with the size of the informal economy only in nations with effective law enforcement. Where this is not the case—as in many developing nations—deregulatory policies are likely to be counter-productive in formalizing the economy.

The social construction of quality: status dynamics in the market for contemporary art

Abstract: The association between quality assessment and status attainment is fundamental in the sociology of markets. However, past literature failed to explain status dynamics such as mobility in the status order where highly uncertain goods make quality hard to measure. This paper contributes to the understanding of this relationship by identifying various social mechanisms behind quality evaluation processes. It also explores why certain products are considered to be more valuable than others. The results demonstrate that only through exchange relations and active participation in the marketplace (what I call status actions) can actors affect the social definition of what are perceived as high-quality products. The results also provide evidence of two major market outcomes: conservativism and centralization. The findings improve the understanding of the evolution and dynamics of status in uncertain markets from both micro- and macro-sociology of markets. These processes are illustrated in a study of the art market in Israel.

Rhetorical legitimation: global scripts as strategic devices of international organizations †

Abstract: This paper focuses on a largely neglected aspect of legitimation in international organizations (IOs)—the rhetorical work done by IO scripts as a legitimation strategy of IOs. Based on extensive research within regional and global IOs, we demonstrate four aspects of rhetorical legitimation. First, IO texts draw upon a finite repertoire of rhetorical devices (a) to propagate legitimation strengths of an IO, (b) to amplify or compensate for legitimation weaknesses and (c) to express rhetorical repertoires which convey their own intrinsic merits. Second, configurations of rhetorical devices in IO texts are affected by temporal contexts, such as exogenous shocks and the historical sequencing of IO norm production. Third, the negotiation of relations of IO interdependency, including competition and cooperation, are partly signaled and managed through the rhetorical repertoires of IO products. Fourth, texts have their own properties, formal and substantive, that are crafted to persuade domestic law-makers.

Marketing and selling transnational ‘judges’ and global ‘experts’: building the credibility of (quasi)judicial regulation

Abstract: Drawing on examples from the fields of international commercial arbitration and international human rights, in particular, and also on trade, intellectual property and governance, this article explores the processes through which transnational norms are created and legitimated. The article rejects approaches that presume an international consensus around norms or simply the imposition of Northern norms and technologies on the South, showing instead how the fields are developed, the advantages that favour ideas and approaches that are credible in the North, and also how limited openings to individuals from the South subtly modify the norms - which in turn reinforces their legitimacy. The article also shows that legal processes, courts and court-like approaches serve to capture both the hierarchies of the field and the processes that can allow a slow evolution that produces some change-but no challenge to the basic orientation.

What if Robin Hood is a social conservative? How the political response to increasing inequality depends on party polarization

Abstract: This paper examines how political competition on a non-economic dimension affects redistribution. More specifically, the paper argues that a high degree of party polarization on a non-economic policy dimension modifies the political response to growing income inequalities. Data from the World Values Survey and the Comparative Manifesto Project are employed to show that party polarization on a traditional moral dimension of politics is associated with a weaker relationship between income and subjective position on the Left-Right scale. Because party polarization is associated with a weaker relationship between income and leftism, the paper claims that the political response to increases in inequality will be weaker in polarized countries. The empirical analysis using redistribution data from the Luxembourg Income Study demonstrates that the positive effect of increases in market inequality on redistribution is lower when party polarization on the non-economic dimension is high.

Institutions and national development in Latin America: a comparative study

Abstract: We review the theoretical and empirical literatures on the role of institutions on national development as a prelude to present a more rigorous and measurable definition of the concept and a methodology to study this relationship at the national and subnational levels. The existing research literature features conflicting definitions of the concept of "institutions" and empirical tests based mostly on reputational indices, with countries as units of analysis. The present study's methodology is based on a set of five strategic organizations studied comparatively in five Latin American countries. These include key federal agencies, public administrative organizations, and stock exchanges. Systematic analysis of results show a pattern of differences between economically-oriented institutions and those entrusted with providing basic services to the general population. Consistent differences in institutional quality also emerge across countries, despite similar levels of economic development. Using the algebraic methods developed by Ragin, we test six hypotheses about factors determining the developmental character of particular institutions. Implications of results for theory and for methodological practices of future studies in this field are discussed.

Labour and the global financial crisis

Abstract: At the 21st SASE Conference in Paris, in July 2009, a group of political economy and industrial relations scholars discussed whether the current legitimation crisis of financial capitalism could be viewed as a turning point for labour internationally. Following are an introduction by the panel organizer, Lucio Baccaro, and revised versions of presentations by Robert Boyer, Colin Crouch, Marino Regini, Paul Marginson, Richard Hyman and Rebecca Gumbrell-McCormick, and Ruth Milkman.

Employability and job security, friends or foes? The paradoxical reception of employacurity in the Netherlands

Abstract: text. The idea that investing in employability is the answer to creative destruction caused insecurity originated in the context of Silicon Valley. Paradoxically, this ‘employacurity’ discourse has taken root in the Netherlands, a country in which the employment system is firmly based on the norm of job security, the total opposite of Silicon Valley’s employment system. Although management gurus have built an attractive discourse on employability, an associated collective action problem detracts from its realism. The Dutch case exhibits mechanisms that may alleviate such a collective action problem. These mechanisms are explored via an examination of policy documents, a quantitative analysis of collective labor agreements and two cases, one of a large bank and one of an industrial company. A craving among Dutch employers for flexibility, fueled by the norm of security that impacts their perception of potential benefits of investments in employability is crucial to our understanding of employacurity in the Netherlands.

A structural fit between states and markets? Public administration regimes and market economy models in the OECD

Abstract: This article examines the relationship between public administration regulation and market economy models in 20 OECD countries. Building on Pollitt and Bouckaert’s (2004) administrative dimension, we employ explorative statistical analysis to identify three distinct public administration regimes: an Anglo-American, a French/German and a Scandinavian regime. The regime structure, especially with regard to public employment regulation, shows a high degree of institutional coherence with the co-ordination rules applying to the market economy. Probing deeper, we construct an index of politico-administrative regulation, which is compared to Hall and Gingerich’s (2009) index of market coordination. The empirical evidence leads us to presume that public administration reforms are likely to focus on the existing market economy model when introducing private sector instruments to public administrations.

SASE Annual Meeting 2009, Paris, France: Economic Regulation and Social Solidarity: Conceptual and Analytic Innovations in the Study of Advanced Capitalism

Abstract: The title for this year’s SASE conference, ‘Capitalism in Crisis: Economic Regulation and Social Solidarity after the Fall of Finance Capitalism’, reflects the turbulent times in which we find ourselves. Policymakers struggle to respond to rapidly unfolding developments, while academics assess how well their theories capture those features of the contemporary situation that best reflect the choices these actors confront. Contemporary developments pose a special challenge for institutionalist theories of political economy since many of the institutional arrangements on which our explanations of cross-national policy differences are based are themselves in flux. The most widely used framework in the literature is that proposed by Peter A. Hall and David Soskice in their influential volume Varieties of Capitalism (2001). The framework they lay out is based on national models defined by

Against the Schumpeterian mainstream: a review of institutional approaches to entrepreneurship

Abstract: An institutionalist scholar, familiar with the numerous impacts of institutions, is likely to be puzzled by most entrepreneurship studies that have been published in leading economics, business and management journals over the past decades. Surely, these studies are far from agreeing on one homogeneous line of research. Disagreement concerns most fundamentally the question whether entrepreneurial ‘traits’ or ‘founding processes’ are the defining entrepreneurial characteristics to be studied ...

Crisis in the regulation regime—a new paradigm?

Abstract: The pre-crisis doxa was based on the idea that the development of modern economies was suffering from excessive regulation and that the institutions inherited from the so-called Golden Age of the post-war years were not suited to new forms of capitalism, particularly the emergence of the ‘knowledge-based society’ (e.g. Sapir, 2004). The policy prescription was to implement a series of structural reforms that aimed roughly at deregulating the economy so as to increase the competitive pressure on agents. All areas of the economy were concerned: product markets were privatized and competition-regulating legislation was dismantled; the employment relationship was altered by increasing the flexibility of the labour market and reducing employment protection; and, of course, the financial system changed with the rise of market finance against intermediated finance and with capital owners given a central role over stakeholders, and financial ‘innovations’ generalized in a way that proposed new ways to manage risk and offered new possibilities for financial investment. The deregulation paradigm was therefore proposed as a coherent package (Braga de Macedo and Oliveira Martins, 2006).

Producing legitimacy at the World Trade Organization: the role of expertise and legal capacity

Abstract: This qualitative study of disputing at the World Trade Organization (WTO) examines how expertise is acquired and maintained over time and how it influences perceptions of legitimacy held by WTO practitioners. The research demonstrates that expertise is derived from individuals' direct experience with disputing. Trade delegations employ or acquire expertise through the development of in-house experts, contracting private legal representation and seeking legal assistance. Institutionalizing expertise acquired by individuals is a primary challenge for building legal capacity and is linked to serial participation, building informal professional relationships and creating economies of scale in expert practitioners. Nonetheless, challenges remain, particularly related to the cost and difficulty of maintaining expertise over time and the role of market power in retaliation. How countries are able to gain expertise underwrites the legitimacy perceptions of practitioners, which emphasizes opportunities to acquire expertise over the persistence of inequalities in legal capacity.

Voluntary contribution to public goods in mutual-help forums: reciprocity or group attachment?

Abstract: This paper studies the provision of public goods in open-source software support forums. Data from the Italian TeX Users Group were analysed to find individual motives for offering help. Using this methodology, we were able to split the forum participants into a small intrinsically motivated core group and a much larger group motivated mainly on the basis of reciprocity. The motives of the two groups were largely complementary and jointly produced a situation where the overwhelming majority of questions received an appropriate answer. At the same time, the core group played a fundamental role and was the key in explaining the forum’s success. Without this group, the forum’s performance would have been considerably diminished, probably down to a level that would not justify its existence.

How macro-level sampling affects micro-level arguments : a rejoinder to Steven Casper

Abstract: For scientists, it is a rewarding experience when our research findings are taken seriously and become the object of an international scientific debate. I thus gratefully acknowledge the interest which Steven Casper has taken in my work by responding in a recent volume of the Socio-Economic Review (Casper, 2009) to the results which Knut Lange (Lange, 2009) and myself (Herrmann, 2008a) had published in previous issues. My article did not address Casper’s research directly. However, like the work of Lange, my findings raise questions about Casper’s results as they arrive at opposite conclusions regarding the sustainability of radically innovative firms in Germany.