Showing papers in "Socio-economic Review in 2018"

Mapping the business systems of 61 major economies: A taxonomy and implications for varieties of capitalism and business systems research

Abstract: Efforts to build a universal theory of the world’s business systems require empirical grounding in an understanding of the variety that need explaining. To support such theorizing, we analyzed the institutional structures of 61 major economies, accounting for 93.5% of 2013 world GDP at purchasing power parity. We found nine main types of business systems: Highly Coordinated, Coordinated Market, Liberal Market, European Peripheral, Advanced Emerging, Advanced City, Arab Oil-Based, Emerging, and Socialist Economies. Our findings illustrate the need to go beyond the Varieties of Capitalism and Business Systems frameworks; provide empirical support for the CME versus LME dichotomy for part of the OECD; identify some of the business systems proposed recently as sub-types of larger clusters; indicate that institutional diversity may increase with development level; and cast doubt on the notions of state-led and family-led capitalism as types of business systems. Our discussion further suggests numerous avenues for theory development and empirical research.

Theoretical and methodological pathways for research on elites

Abstract: In this introductory essay to our special issue on elites, we outline some of the major challenges to research in this area and propose a series of theoretical and methodological pathways to address them. Theoretically we make four recommendations: (a) greater attentiveness to and specificity about the relationship between elites and power; (b) a clearer articulation of the relationships between elites and the varieties of capitalism; (c) far more attention to diversity within elites and the use of elites to understand forms of domination like white supremacy and masculine domination and (d) expanding beyond the orthodox form of Bourdieusian theoretical frameworks. Methodologically we outline how research using survey instruments, social network analysis (SNA) (and multiple correspondence analysis), interviews, ethnographic observation, experiments, archival research, administrative data and content analysis can each be deployed, built upon or redirected to help bring elites into greater focus.

Fit to be king: how patrimonialism on Wall Street leads to inequality

Abstract: The hedge fund industry is one of the most lucrative and powerful industries in the USA, yet it mostly comprises white men. To understand why, I turn to Weber’s theory of patrimonialism, which primarily has been applied to historical or nonWestern societies. I argue that patrimonialism—activated through trust, loyalty and tradition—restricts access to financial rewards and facilitates the reproduction of the white male domination of this industry. Using data from 45 in-depth interviews combined with field observations at industry events over a 4-year period, I investigate how hiring, grooming and seeding practices within and among firms enable certain elites to maintain monopolies over financial resources. Applying the theory of patrimonialism to a context with few women and minority men in power-holding positions demonstrates how practices that reproduce elite structures are directly connected to inequality in the workplace.

Diversified Quality Production Revisited: Its Contribution to German Socio-Economic Performance over Time

Abstract: We revisit the concept of Diversified Quality Production (DQP), which we introduced about 30 years ago. Our purpose is to examine the extent to which the concept can still be considered tenable for describing and explaining the development of the interaction between the political economy and concepts of production, notably in Germany. First, we show why and in which ways DQP was more heterogeneous than we had originally understood. Then, on the basis of evidence with respect to political, business, and economic changes in Germany, we show that DQP Mark I, a regime by and large characteristic of the 1980s, turned into DQP Mark II. In the process, major ‘complementarities’ disappeared between the late 1980s and now—mainly the complementarity between production modes on the one hand and industrial relations and economic regulation on the other. While the latter exhibit greater change, business strategies and production organization show more continuity, which helps explain how Germany maintained economic performance after the mid-2000s, more than other countries in Europe. Conceptually, our most important result is that the complementarities emphasized in political economy are historically relative and limited, so that they should not be postulated as stable configurations.

The effects of labour market reforms upon unemployment and income inequalities: an agent-based model

Abstract: This paper is meant to analyse the effects of labour market structural reforms by means of an agent-based model. Building on Dosi et al., (2016b) we introduce a policy regime change characterized by a set of structural reforms on the labour market, keeping constant the structure of the capital- and consumption-good markets. Confirming a recent IMF report (Jaumotte and Buitron, 2015), the model shows how labour market structural reforms reducing workersu bargaining power and compressing wages tend to increase (i) unemployment, (ii) functional income inequality, and (iii) personal income inequality. We further undertake a global sensitivity analysis on key variables and parameters which confirms the robustness of our findings.

What do Germans think and know about income inequality? A survey experiment

Abstract: Germans are unable to assess their own position in the income distribution of their country and do not know much about income inequality and stratification. They are well aware of their ignorance. Germans would prefer society to be more egalitarian than they perceive it. Providing accurate information about the income distribution does not change this preference for more redistribution – except among those who learn that they are net contributors in the German tax-transfer system.

Resilient privatization: the puzzling case of for-profit welfare providers in Sweden

Abstract: In this article, we analyse the striking resilience of for-profit care and service provisionin what has often been seen as the archetypical social democratic welfare state:Sweden. We focus on the s ...

The social aftermath of economic disaster: Karl Polanyi, countermovements in action, and the Greek crisis

Abstract: The economic crisis in Greece resulted in high unemployment and the dismantling of social protection policies. How did newly-unemployed working-class people respond to rapid downward socioeconomic mobility? I trace these issues through the study of one working class community in Athens over 2012-13. Since the onset of the crisis, my informants became excluded from both market-provided income and state-provided welfare services, thereby experiencing a simultaneous drop in living standards, loss of social status, and debasement of their symbolic construction of reality. To respond to these pressures, they relied on a combination of material survival strategies, the reconfiguration of social resources, and the reconstruction of cultural imaginaries. To explain these findings, the article draws on Karl Polanyi’s analysis of countermovements to marketization and commodification. I argue in favour of augmenting the definition of countermovements, emphasising the cultural aspects of social protection, and grounding analyses in local-level phenomena and their interactions with the macro-institutional context. This reading of Polanyi’s work seeks to integrate many moving—and potentially contradictory—parts into a unified framework of societal responses to social dislocation.

Policies, skills and earnings: how educational inequality affects earnings inequality

Abstract: We study the impact of dispersions in education (both in student test scores and final educational attainment) on earnings inequality, in a country-cohort design. Neo-classical economic theory would predict a positive association between skill inequality (as measured in student test scores) and earnings inequality, while educational attainment inequality adds little on top of skills inequality. A sociological theory of social closure, however, argues that inequality in educational attainment is more important than skills inequality in the prediction of earnings inequality. Using educational policies as instruments, we find causal effects of skills inequality and educational attainment inequality, suggesting that a simple human capital model is insufficient to explain rising earnings inequalities. Nevertheless, skills inequality appeared a more important predictor of earnings inequality than educational attainment inequality. Some educational policy reforms (like public preschool provision or introducing standardized tests) led to reduced educational dispersions, and thereby reduced earnings inequality in adulthood.

How regimes shape preferences : A study of political actors' labour market policy preferences in flexicurity and dualizing countries

Abstract: Political actors do not operate in a vacuum; rather, it is safe to assume that their preferences are influenced by the institutional context in which they operate. By means of novel interview data, which was collected in flexicurity countries, i.e. Denmark and Switzerland, and in dualizing countries, i.e. France, Germany and Italy, I investigate the preferences of parties, unions, state bodies, employers and social movement organizations towards traditional and activation strategies. I find that the institutional context indeed shapes preferences. The results reveal, for instance, that state bodies reject increasing activation efforts in flexicurity countries but support it in dualizing countries. Moreover, in line with previous research, social democratic parties are found to cater to the interests of insiders by endorsing the expansion of traditional measures in dualizing countries, while focusing on outsiders’ interests by preferring the expansion of activation in flexicurity countries.

How to become a judgment device: valuation practices and the role of auctions in the emerging Chinese art market

Abstract: This article studies the role of judgment devices in the emergence of markets for singularities. In particular, it seeks to understand how specific judgment devices become dominant in resolving uncertainty within these markets. Building on Karpik’s seminal theory, we argue that institutional environments (e.g. government regulations, political economic factors, the level of informality within business environments) as well as the level of expertise of consumers, co-determine which devices come to be used in new markets. Empirically, we focus on the emerging market for contemporary art in China. While auctions and auction prices are widely used in valuing contemporary art in China, this is highly illegitimate in international art markets. We argue that auctions act as a judgment device in China because of strong government backing, because other validating organizations, such as museums and art critics, are seen as untrustworthy, and because auctions send strong, easily interpretable signals to novice collectors.

The inner circle revisited: the case of an egalitarian society

Abstract: The interlocks within the corporate elite in a highly egalitarian society, the negotiated economy of the Scandinavian welfare state of Denmark, are examined by critically reassessing Michael Useem’s notion of the inner circle. Using a new measure of social circles memberships based on proximity in social networks, we identify a cohesive core group of 171 individuals within a corporate elite of 6,154 board members of the top 1,037 Danish corporations. A high degree of social homogeneity in gender, social background, education, and career position underlines the cohesion of the inner circle. By mapping business association committees, political commissions, university governing boards, cultural institutions, social clubs, foundations, and royal events, the inner-circle members are shown to be representatives of the entire capitalist class in key sectors. This suggests that on-going opposition to the capitalist class enhances the need for collective action, and thus paradoxically strengthens the unity of the corporate elite.

Domestic obstacles to labor standards: law enforcement and informal institutions in Argentina’s garment industry

Abstract: The obstacles to implementing labor standards in the garment industry have been addressed by a significant body of literature which increasingly considers local institutions. This includes viewing states and government actors as predictors of compliance. Yet fine-grained studies on how the interplay of informal institutions and local actors’ interests prevents standards being implemented are still lacking. Drawing on seven months of ethnographic fieldwork at the main supply center for sweatshop produced and counterfeit clothing in Buenos Aires, Argentina, this article shows how these actors’ tolerance toward the sweatshop economy obstructs the implementation of labor standards. According to empirical evidence, this tolerance means protecting certain actors, i.e. non-enforcing the law. Accordingly, the paper distinguishes between two types of protection: provided by state or by political actors. By uncovering the workings of informal institutions and the political actors’ logics, this article helps to understand why deplorable labor conditions in the garment industry persist.

“Before long there will be nothing but billionaires!” The power of elites over space on the Saint-Tropez peninsula

Abstract: Despite its worldwide fame as a fashionable resort and dwelling place of high society, and unlike other elite haunts, the St Tropez peninsula has been overlooked by the social sciences. And yet, it is an emblematic place to observe not only elite self-segregation, but the rise of inequality as well. Based on an ongoing empirical research, this article aims to fill this gap by linking the study of elites to the analysis of social-spatial inequality. It challenges the dominant narrative that simply focuses on elite newcomers charmed by the natural beauty of the area by showing that it took considerable work to adapt local amenities to their tastes. Departing from the common image associated with St Tropez as a show-off place of conspicuous consumption, it also highlights a trend towards ‘conspicuous seclusion’. All in all, the case of St Tropez reveals how elites shape their environment through the physical and symbolical power they exert over space.

Pension management between financialization and intergenerational solidarity: a socio-economic analysis and a comprehensive model

Abstract: In recent decades, the management modes of pension obligations have been coevolving with political and financial economic strategies aimed at promoting and favouring active financial markets and institutional investors, as well as transnational harmonization and convergence of accounting standards between private and public sectors. In this context, our article provides a theoretical analysis of these management modes of pension obligations, based on a comprehensive review of existing practice and regulation. The latter are still inconsistent with the individual savings model that has been fostered by international institutions, including the World Bank, the International Monetary Fund and the International Public Sector Accounting Standards (IPSAS) Board. According to our frame of analysis, a variety of viable modes of pension management exists and may be acknowledged. Overcoming the received opposition between defined contribution and defined benefit systems, our approach elaborates a model of pension management with a view to clarifying and improving pension protection, that is, the assurance of continued provision of pension payments at their agreed levels under viable alternative modes of pension management. The definition of financial sustainability depends on the pension management mode that is applied. With the help of this model, we further develop policy recommendations for accounting and prudential regulations concerning pension obligations.

Varieties of education and inequality: how the institutions of education and political economy condition inequality

Abstract: This paper focuses on the relationship between equality of educational opportunity and equality of income in different institutional contexts. By combining insights from the literature on Varieties ...