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Book•

Varieties of Capitalism

Peter A. Hall1, David Soskice•
Harvard University1
01 Jan 2001-
TL;DR: A number of schemas have been proposed to explain why countries have often been able to secure substantial rates of growth in different ways, often with relatively egalitarian distributions of income as discussed by the authors.
Abstract: Scholarship on varieties of capitalism (VofC) explores the ways in which the institutions structuring the political economy affect patterns of economic performance or policy making and the distribution of well-being. Contesting the claim that there is one best route to superior economic performance, a number of schemas have been proposed to explain why countries have often been able to secure substantial rates of growth in different ways, often with relatively egalitarian distributions of income. Prominent among them is a VofC analysis focused on the developed democracies that distinguishes liberal and coordinated market economies according to the ways in which firms coordinate their endeavors. On the basis of institutional complementarities among subspheres of the political economy, it suggests that the institutional structure of the political economy confers comparative institutional advantages, notably for radical and incremental innovation, which explains why economies have not converged in the context of globalization. Although this framework is contested, it has inspired new research on many subjects, including the basis for innovation, the determinants of social policy, the grounds for international negotiation, and the character of institutional change. In this issue area, there is promising terrain for further research into the origins of varieties of capitalism, the factors that drive institutional change in the political economy, how institutional arrangements in the subspheres of the political economy interact with one another, the normative underlay for capitalism, and the effects of varieties of capitalism on multiple dimensions of well-being. Keywords: capitalism; political economy; globalization; politics; institutional change; economic growth; macroeconomics; innovation; complementarities; social policy
Citations
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Posted Content•
'Implicit' and 'Explicit' CSR: A Conceptual Framework for a Comparative Understanding of Corporate Social Responsibility

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Dirk Matten1, Jeremy Moon2•
York University1, University of Nottingham2
01 Jan 2008-Social Science Research Network
TL;DR: In this paper, the authors address the question of how and why corporate social responsibility (CSR) differs among countries and how it changes, and apply two schools of thought in institutional theory to conceptualize the differences between CSR in the USA and Europe.
Abstract: We address the question of how and why corporate social responsibility (CSR) differs among countries and how and why it changes. Applying two schools of thought in institutional theory we conceptualize, first, the differences between CSR in the USA and Europe and, second, the recent rise of CSR in Europe. We also delineate the potential of our framework for application to other parts of the global economy.

3,300 citations

Cites background from "Varieties of Capitalism"

  • ...…1980; Sorge, 1991; Whitley, 1992, 1999, 2002a,b), which shares key features with the varieties of capitalism approaches that distinguish liberal market economies and coordinated market economies (Hall & Soskice, 2001), along with specific social systems of production (Hollingsworth & Boyer, 1997)....

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Journal Article•DOI•
“Implicit” and “Explicit” CSR: A Conceptual Framework for a Comparative Understanding of Corporate Social Responsibility

[...]

Dirk Matten1, Jeremy Moon2•
York University1, University of Nottingham2
01 Apr 2008-Academy of Management Review
TL;DR: In this paper, the authors address the question of how and why corporate social responsibility (CSR) differs among countries and how it changes and delineate the potential of their framework for application to other parts of the global economy.
Abstract: We address the question of how and why corporate social responsibility (CSR) differs among countries and how and why it changes. Applying two schools of thought in institutional theory, we conceptualize, first, the differences between CSR in the United States and Europe and, second, the recent rise of CSR in Europe. We also delineate the potential of our framework for application to other parts of the global economy.

3,015 citations

Journal Article•DOI•
The Economic Consequences of Legal Origins

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Rafael La Porta1, Florencio Lopez-de-Silanes2, Andrei Shleifer3•
Dartmouth College1, Saint Petersburg State University2, Harvard University3
01 May 2008-Journal of Economic Literature
TL;DR: The authors argued that the historical origin of a country's laws is highly correlated with a broad range of its legal rules and regulations, as well as with economic outcomes, and they summarized this evidence and attempted a unified interpretation.
Abstract: In the last decade, economists have produced a considerable body of research suggesting that the historical origin of a country's laws is highly correlated with a broad range of its legal rules and regulations, as well as with economic outcomes. We summarize this evidence and attempt a unified interpretation. We also address several objections to the empirical claim that legal origins matter. Finally, we assess the implications of this research for economic reform.

2,134 citations

Posted Content•
The Diversity of Modern Capitalism

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Bruno Amable
01 Jan 2003-OUP Catalogue
TL;DR: In this article, the authors consider why institutional forms of modern capitalist economies differ internationally, and propose a typology of capitalism based on the theory of institutional complementarity, which is the outcome of socio-political compromises.
Abstract: This book considers why institutional forms of modern capitalist economies differ internationally, and proposes a typology of capitalism based on the theory of institutional complementarity Different economic models are not simply characterized by different institutional forms, but also by particular patterns of interaction between complementary institutions which are the core characteristics of these models Institutions are not just simply devices which would be chosen by 'social engineers' in order to perform a function as efficiently as possible; they are the outcome of a political economy process Therefore, institutional change should be envisaged not as a move towards a hypothetical 'one best way', but as a result of socio-political compromises Based on a theory of institutions and comparative capitalism, the book proposes an analysis of the diversity of modern economies - from America to Korea - and identifies five different models: the market-based Anglo-Saxon model; Asian capitalism; the Continental European model; the social democratic economies; and the Mediterranean model Each of these types of capitalism is characterized by specific institutional complementarities The question of the stability of the Continental European model of capitalism has been open since the beginning of the 1990s: inferior macroeconomic performance compared to Anglo-Saxon economies, alleged unsustainability of its welfare systems, too rigid markets, etc The book examines the institutional transformations that have taken place within Continental European economies and analyses the political project behind the attempts at transforming the Continental model It argues that Continental European economies will most likely stay very different from the market-based economies, and caat political strategies promoting institutional change aiming at convergence with the Anglo-Saxon model are bound to meet considerable opposition

1,611 citations

Journal Article•DOI•
Income and Democracy

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Daron Acemoglu1, Simon Johnson2, James A. Robinson3, Pierre Yared4•
Massachusetts Institute of Technology1, International Monetary Fund2, Harvard University3, Columbia University4
01 May 2008-The American Economic Review
TL;DR: This paper showed that controlling for such factors by including country fixed effects removes the statistical association between income per capita and vari- ous measures of democracy, and presented instrumental-variables estimates that also show no causal effect of income on democracy.
Abstract: Existing studies establish a strong cross-country correlation between income and democracy but do not control for factors that simultaneously affect both variables. We show that controlling for such factors by including country fixed effects removes the statistical association between income per capita and vari- ous measures of democracy. We present instrumental-variables estimates that also show no causal effect of income on democracy. The cross-country corre - lation between income and democracy reflects a positive correlation between changes in income and democracy over the past 500 years. This pattern is con - sistent with the idea that societies embarked on divergent political-economic development paths at certain critical junctures. (JEL D7�, E�1)

1,045 citations

References
More filters
Posted Content•
The Diversity of Modern Capitalism

[...]

Bruno Amable
01 Jan 2003-OUP Catalogue
TL;DR: In this article, the authors consider why institutional forms of modern capitalist economies differ internationally, and propose a typology of capitalism based on the theory of institutional complementarity, which is the outcome of socio-political compromises.
Abstract: This book considers why institutional forms of modern capitalist economies differ internationally, and proposes a typology of capitalism based on the theory of institutional complementarity Different economic models are not simply characterized by different institutional forms, but also by particular patterns of interaction between complementary institutions which are the core characteristics of these models Institutions are not just simply devices which would be chosen by 'social engineers' in order to perform a function as efficiently as possible; they are the outcome of a political economy process Therefore, institutional change should be envisaged not as a move towards a hypothetical 'one best way', but as a result of socio-political compromises Based on a theory of institutions and comparative capitalism, the book proposes an analysis of the diversity of modern economies - from America to Korea - and identifies five different models: the market-based Anglo-Saxon model; Asian capitalism; the Continental European model; the social democratic economies; and the Mediterranean model Each of these types of capitalism is characterized by specific institutional complementarities The question of the stability of the Continental European model of capitalism has been open since the beginning of the 1990s: inferior macroeconomic performance compared to Anglo-Saxon economies, alleged unsustainability of its welfare systems, too rigid markets, etc The book examines the institutional transformations that have taken place within Continental European economies and analyses the political project behind the attempts at transforming the Continental model It argues that Continental European economies will most likely stay very different from the market-based economies, and caat political strategies promoting institutional change aiming at convergence with the Anglo-Saxon model are bound to meet considerable opposition

1,611 citations

"Varieties of Capitalism" refers background in this paper

  • ...Amable (2003) posits five forms of capitalism, characterized bydistinctive institutional complementarities, in Scandinavia,Asia, southern Europe, the Anglo-American world, and continental Europe. More recently, Becker (2009) suggests four types of capitalism seen as loosely ordered and relatively open systems. Another series of analyses assess the contention that LMEs provide more propitious institutional ground for radical innovation than CMEs. Taylor (2004) saw no evidence for this proposition; but Allen, Funk, and Tüselmann (2006) and Akkermans, Castaldi, and Los (2009) find that the revealed comparative advantage of sectors corresponds broadly to VofC predictions with some notable exceptions....

    [...]

  • ...Amable (2003) posits five forms of capitalism, characterized bydistinctive institutional complementarities, in Scandinavia,Asia, southern Europe, the Anglo-American world, and continental Europe. More recently, Becker (2009) suggests four types of capitalism seen as loosely ordered and relatively open systems. Another series of analyses assess the contention that LMEs provide more propitious institutional ground for radical innovation than CMEs. Taylor (2004) saw no evidence for this proposition; but Allen, Funk, and Tüselmann (2006) and Akkermans, Castaldi, and Los (2009) find that the revealed comparative advantage of sectors corresponds broadly to VofC predictions with some notable exceptions. Huo (2012) extends the theory to show why competition encourages radical innovation based on information effects, while cooperation does not. In a bold intervention, Acemoglu, Robinson, and Verdier (2012) find support for the proposition that radical innovation is more likely in LMEs, and use the point to contend that economic growth in the “cuddly capitalism” of CMEs is ultimately dependent on the technological innovations devised in the “ruthless capitalism” of LMEs. However, using different measures, Maliranta, Mättännen, and Vihriälä (2012) dispute this argument on the grounds that radical innovation can be found in the Nordic economies....

    [...]

  • ...Amable (2003) posits five forms of capitalism, characterized bydistinctive institutional complementarities, in Scandinavia,Asia, southern Europe, the Anglo-American world, and continental Europe. More recently, Becker (2009) suggests four types of capitalism seen as loosely ordered and relatively open systems. Another series of analyses assess the contention that LMEs provide more propitious institutional ground for radical innovation than CMEs. Taylor (2004) saw no evidence for this proposition; but Allen, Funk, and Tüselmann (2006) and Akkermans, Castaldi, and Los (2009) find that the revealed comparative advantage of sectors corresponds broadly to VofC predictions with some notable exceptions. Huo (2012) extends the theory to show why competition encourages radical innovation based on information effects, while cooperation does not. In a bold intervention, Acemoglu, Robinson, and Verdier (2012) find support for the proposition that radical innovation is more likely in LMEs, and use the point to contend that economic growth in the “cuddly capitalism” of CMEs is ultimately dependent on the technological innovations devised in the “ruthless capitalism” of LMEs....

    [...]

  • ...Amable (2003) posits five forms of capitalism, characterized bydistinctive institutional complementarities, in Scandinavia,Asia, southern Europe, the Anglo-American world, and continental Europe....

    [...]

  • ...Amable (2003) posits five forms of capitalism, characterized bydistinctive institutional complementarities, in Scandinavia,Asia, southern Europe, the Anglo-American world, and continental Europe. More recently, Becker (2009) suggests four types of capitalism seen as loosely ordered and relatively open systems....

    [...]

Book Chapter•
Social protection and the formation of skills: a reinterpretation of the welfare state

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David Soskice, Margarita Estévez-Abe, Torben Iversen
01 Jan 2001
TL;DR: The authors argue that workers will only make such risky investments when they have some insurance that their job or income is secure, otherwise, they will invest in general, and therefore portable, skills.
Abstract: This paper outlines a new approach to the study of the welfare state. Contrary to the emphasis on “decommmodification” in the current literature, we argue that important dimensions of the welfare state – employment protection, unemployment protection, and wage protection – are designed to make workers more willing to invest in firmand industry-specific skills that increase their dependence on particular employers and their vulnerability to market fluctuations. Workers will only make such risky investments when they have some insurance that their job or income is secure. Otherwise, they will invest in general, and therefore portable, skills. In turn, because the skill composition of the work force constrains the set of product market strategies that firms can pursue successfully, employers will support social protection that facilitates the set of skills they need to be competitive in particular international product markets. We show that our argument is consistent with observed clusters of social protection and skill profiles among OECD countries, and that these clusters are associated with very different distributional outcomes and patterns of gender-specific labor market segmentation.

1,222 citations

Journal Article•DOI•
Varieties of Capitalism and Institutional Complementarities in the Political Economy: An Empirical Analysis

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Peter A. Hall1, Peter A. Hall2, Daniel W. Gingerich3•
Harvard University1, Max Planck Society2, University of Virginia3
01 Jul 2009-British Journal of Political Science
TL;DR: This paper provided a statistical analysis of core contentions of the "varieties of capitalism" perspective on comparative capitalism and constructed indices to assess whether patterns of co-ordination in the OECD economies conform to the predictions of the theory and compared the correspondence of institutions across subspheres of the political economy.
Abstract: This article provides a statistical analysis of core contentions of the ‘varieties of capitalism’ perspective on comparative capitalism. The authors construct indices to assess whether patterns of co-ordination in the OECD economies conform to the predictions of the theory and compare the correspondence of institutions across subspheres of the political economy. They test whether institutional complementarities occur across these subspheres by estimating the impact of complementarities in labour relations and corporate governance on growth rates. To assess the durability of varieties of capitalism, they report on the extent of institutional change in the 1980s and 1990s. Powerful interaction effects across institutions in the subspheres of the political economy must be considered if assessments of the economic impact of institutional reform in any one sphere are to be accurate.

948 citations

Journal Article•DOI•
An Asset Theory of Social Policy Preferences

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Torben Iversen1, David Soskice2•
Harvard University1, Duke University2
01 Dec 2001-American Political Science Review
TL;DR: The authors argue that individuals who have made risky investments in skills will demand insurance against the possible future loss of income from those investments, and they test the theory on public opinion data for eleven advanced democracies and suggest how differences in educational systems can explain cross-national differences in the level of social protection.
Abstract: We present a theory of social policy preferences that emphasizes the composition of people's skills. The key to our argument is that individuals who have made risky investments in skills will demand insurance against the possible future loss of income from those investments. Because the transferability of skills is inversely related to their specificity, workers with specific skills face a potentially long spell of unemployment or a significant decline in income in the event of job loss. Workers deriving most of their income from specific skills therefore have strong incentives to support social policies that protect them against such uncertainty. This is not the case for general skills workers, for whom the costs of social protection weigh more prominently. We test the theory on public opinion data for eleven advanced democracies and suggest how differences in educational systems can help explain cross-national differences in the level of social protection.

920 citations

"Varieties of Capitalism" refers background in this paper

  • ...Building on this, VofC analysts develop an account of why employers have interests in social policy regimes (Estevez-Abe, Iversen, & Soskice, 2001; Iversen & Soskice, 2001; Mares, 2004)....

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Journal Article•DOI•
Setting the Rules of the Game: The Choice of Electoral Systems in Advanced Democracies

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Carles Boix1•
Princeton University1
20 Mar 2000-Social Science Research Network
TL;DR: In this paper, the authors show that the existing wide variation in electoral rules across nations can be traced to the strategic decisions that the current ruling parties, anticipating the coordinating consequences of different electoral regimes, make to maximize their representation according to the following conditions.
Abstract: The origins of electoral systems have received scant attention in the literature. Looking at the history of electoral rules in the advanced world in the last century, this paper shows that the existing wide variation in electoral rules across nations can be traced to the strategic decisions that the current ruling parties, anticipating the coordinating consequences of different electoral regimes, make to maximize their representation according to the following conditions. On the one hand, as long as the electoral arena does not change substantially and the current electoral regime serves the ruling parties well, the latter have no incentives to modify the electoral regime. On the other hand, as soon as the electoral arena changes (due to the entry of new voters or a change in their preferences), the ruling parties will entertain changing the electoral system, depending on two main conditions: the emergence of new parties and the coordinating capacities of the old ruling parties. Accordingly, if the new parties are strong, the old parties shift from plurality/ majority rules to proportional representation (PR) only if the latter are locked into a 'non-Duvergerian' equilibrium; i.e. if no old party enjoys a dominant position (the case of most small European states) --conversely, they do not if a Duvergerian equilibrium exists (the case of Great Britain). Similarly, whenever the new entrants are weak, a non-PR system is maintained, regardless of the structure of the old party system (the case of the USA). The paper discusses as well the role of trade and ethnic and religious heterogeneity in the adoption of PR rules.

583 citations

"Varieties of Capitalism" refers background in this paper

  • ...However, these are still matters of lively debate (cf. Boix, 1991; Martin & Swank, 2012)....

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