Can a comparative capitalism approach explain fiscal policy activism?

This study investigates the implications of models of capitalism for the responsiveness of countries’ fiscal policies during business cycles using new data for member countries of the Organization for Economic Cooperation and Development and China. We expand the literature by adding the category of East Asian nonliberal capitalism to the established distinction of liberal market economies and nonliberal coordinated market economies. These three differ substantially not just in their fiscal policies, but also in monetary policies, degree of financial market orientation, exchange rate regime, and labor market organization. As in previous studies, we find that governments of liberal economies adopt more countercyclical fiscal policies. Departing from existing studies, however, among the nonliberal models of capitalism, (East Asian) state-led models have more countercyclical fiscal policies than (European) coordinated market economies, perhaps as countercyclical as liberal economies, both historically and during the 2007–9 crisis. This is due to less independent central banks, managed float of exchange rates, and limited financial market orientation and financial openness in East Asia, which allow for more active fiscal policy. Among political factors, left-of-center governments, fractionalized party systems, and election years are associated weakly with countercyclical fiscal policy, as expected. Labor market coordination and welfare generosity have unclear roles in regard to fiscal policy, a topic for future research.     

The Tunisian Mise à Niveau Programme and the Political Economy of Reform

This article explores the homogenising pressures of globalisation and institutional change in the state-led model of capitalism, within the purview of the ‘varieties of capitalism’ literature. In light of the observation that the national political economies which are the exemplars of the state-led model have undergone a more fundamental change towards the liberal market model than the other non-liberal variant (namely, the coordinated market model), the article asks what systemic (structural-institutional) factors make the state-led model less resilient in the face of pressures for change. Focusing on corporate governance in South Korea as an illustrative case study, the article argues that the absence of the kind of institutional complementarity (that is, mutually reinforcing link) between the key capitalist sub-systems found in the coordinated market model can help to explain the profound, and even path-shifting, change in the state-led model.     

'Social Democracy on the Back Foot': The ALP and the 'New' Australian Model

Politicians hope that technological innovation will mitigate the threat of climate change and expect that capitalism will most efficiently deliver the necessary technologies. Yet capitalism is not monolithic. The Varieties of Capitalism approach suggests that capitalist states fall within a spectrum between liberal market economies (LMEs) and coordinated market economies (CMEs). How do the relative styles of technological innovation in LMEs versus CMEs affect their ability to reduce carbon emissions? This article addresses this question by investigating the relative technological styles and strengths of LMEs and CMEs, and comparing them to the technological development needed to combat climate change. While technological change in CMEs tends to be more incremental, LMEs, with their greater orientation to competitive markets, are said to better support radical technological change. This article finds that the US's LME variety of capitalism hampers its ability to address climate change by comparison to CMEs such as Germany and Japan, and therefore suggests that the US's lack of leadership on climate change is as much a consequence of its variety of capitalism as an absence of political will.     

Measuring Change of Capitalist Varieties: Reflections on Method,Illustrations from the BRICs

How to indicate institutional diversity and gradual change in capitalist political economies? What is the appropriate typological method, how could a suitable typology look? In the Weberian tradition, this article pleads for a method that rigorously distinguishes ideal types from empirical cases. Ideal types (like liberal capitalism) idealise reality by emphasising certain aspects, cases (like Brazilian capitalism) are hybrids more or less approximating the types. Contrasting static classifications that do not allow for gradual change, the latter has to be understood as the movement of cases in the field between the types. Using the state–economy and capital–labour relationships as criteria the article proposes a typology consisting of liberal, statist, corporatist, meso-communitarian and patrimonial types. Liberalism, statism and particularly patrimonialism are relevant for emerging economies. In the second half, the article illustrates its methodological recommendation by indicatively mapping institutional change from 1998 to 2008 in political economies that recently gained importance: the BRICs (Brazil, Russia, India, China), Turkey and a few Eastern European ones. It turns out that most of them liberalised but that this change was rather modest in the BRICs, while it was more significant in Eastern Europe. Yet statism and patrimonialism appear still to be strong.     

Does Europe need neoliberal reforms?

This paper examines the neoliberal claim that the only way toachieve sustainable growth and full employment is to abandonKeynesian macroeconomic management and the welfare state andbring back ‘flexible labour market policies’. Itsummarises the conditions required for neoliberal policies toproduce such an outcome and their relevance to contemporaryeconomic, social and political realities. This is followed byan empirical comparison of the economic performance and socialwell-being of seven advanced economies, widely regarded as leadingproponents of the three models of capitalism: liberal, corporatistand social democratic. Contrary to the claim, the model thatperforms best is the one that has least in common with the neoliberaleconomic orthodoxy – a conclusion that is likely to beof particular relevance in the present century.     

The Competitive Advantage of Collaboration – Throwing New Light on The Nordic Model

ABSTRACT

In one of the most influential contributions to modern political economy, Hall and Soskice have launched a distinction between ‘liberal’ and ‘coordinated’ market economies, placing the Nordic countries firmly in the latter category. We argue that, while the H&S distinction may serve classificatory purposes, seeing the Nordic model in terms of ‘coordinated capitalism’ blurs the distinctive features of the Nordic countries’ success as productive and fair economies. We contend that the central formula behind this success lies in what we call the Nordic model’s ambidexterity – the capacity to combine collaborative and competitive elements and skilfully navigate between them. Using an interdisciplinary perspective (inspired by organisation theory, cultural semiotics and evolutionary analysis), we provide a conceptual basis for reinterpreting the Nordic Model as an ambidextrous combination of culturally rooted, collaborative strategies that are subsequently competitively exposed. The article illustrates the workings of this ambidexterity in three societal domains: work life (including female participation), resource management – illustrated by the Norwegian petro-economy – and international business management and regulation with a focus on CSR. In each case we will show how collaboration is intertwined with pragmatic competitive exposure, yielding high productivity, high welfare, as well as fair income and wealth distribution.     

German Finance Capitalism: The Paradigm Shift Underlying Financial Diversification

This article is concerned with the genesis of German financial liberalisation. A refined inventory of financial system change – including new meso-level data on finance pattern and the marketisation of banking – reveals a varied pattern of change across German finance. It is argued that this financial diversification can only be understood with careful reference to the underlying ideational factors. An analytical narrative traces how technocratic ideas of financial modernisation during the 1980s began to open up space for the political program of finance capitalism to absorb liberal and leftist discontents with insider control and bank dominance. Upon reaching a tipping point of discursive dominance, the program was distinctly adopted across the political economy as the result of compartmentally different political, ideational and structural factors; creating a non-hegemonic financial paradigm that became identifiable in the face of recent crises. By developing analytical steps that link incremental and dynamic theories of institutional change in a conceptual framework of belief shifts, the paper contributes to efforts of adapting existing models of change to complex domains and accounting for the dynamic nature of the paradigm-generating process. The findings inform the larger debate about internal capitalist diversity and the coherence of national economic models.     

Basic income,liberal neutrality,socialism, and work

Liberal critics often object to basic income (BI) on the grounds that it violates reciprocity and is biased toward those who choose voluntarily to opt out of work and thus violate the principle of liberal neutrality toward conceptions of the good life. In the first part of this paper I argue that liberal neutrality favors BI. Marxist critics of BI are less likely to accept liberal neutrality, but I argue in the second part that the argument for BI in the first part applies with equal force to Marxist objections that BI is unfairly exploitative of workers. Marxists are also less likely to accept current labor market trends, seeing socialism as affording more opportunity for guaranteeing everyone a right to decent work, and suspecting BI of making the unfair inequalities of capitalism a little more palatable while diverting attention from a more equitable socialist alternative. I argue that BI is not incompatible with socialism or Marxism, and should not be opposed to but rather combined with strategies for full employment.     

COMPETITION OR COOPERATION IN URBAN SERVICE DELIVERY?

ABSTRACT: Inter‐municipal cooperation is now as common among US local governments as for profit privatization. This article uses data from a national survey in 2007 to explore the benefits of cooperation – economies of scale, service coordination across the metropolitan region and greater community control. While privatization reforms have focused on harnessing the benefits of a competitive market, cooperation may be the new frontier where economies of scale and efficiency gains can be achieved with governments working together in a new form of collaborative service delivery.     

Inflation,a disease of society

This paper focuses on financing the welfare state expenditures in the UK. It offers a comprehensive analysis of social expenditures and taxes paid by the working population families, and an estimation of the net benefits received by them. While the subsequent analysis of the welfare state and its development primarily concentrates on the British experience, it has a broader application to other OECD countries. The UK as the most egalitarian “liberal market economy,” offers an interesting case for the study of the interaction between the welfare state expansion and economic growth. In terms of her capitalist economic structure, (interaction between market and economy) she is relatively closer to the USA and other Angelo-Saxon (liberal market) economies. In terms of her level of social expenditures, she is much closer to the European “social market economies” than the USA and other more egalitarian “liberal market economies.”     

What about the Elephant in the Room? Varieties of Capitalism,Varieties in Capitalism

Conceived as considerably broader than simply the Varieties of Capitalism framework, I argue that the varieties of capitalism literature is premised upon an institutional reductionism which necessitates the search for a more holistic approach. In brief, if we are to explain convincingly the evolution of national political economies, then we must acknowledge that varieties of capitalism are also varieties in capitalism. In particular, Antonio Gramsci's writings on common sense enable us to focus on the role of institutions as a historical force without abandoning the system of production that they are part of. I then provide an alternative explanation, compared to the varieties of capitalism literature, of the evolution of the Dutch and German political economies in order to demonstrate the advantages of the framework I develop.     

Cultural globalisation, institutional diversity and the unequal accumulation of intellectual capital

National economies used to be characterised by cultural standardisationand social protection. Globalisation pushes cultural standardisationbeyond the boundaries of national states and induces a globaldilution of the standards of social protection. At the sametime, if national economies specialise according to their comparativeinstitutional advantage, global economic integration may helppromote institutional diversity and variety in welfare policies.However, the institution of a global system of intellectualproperty rights may seriously limit the ‘biodiversity’of capitalism and imply a global revenge of a new internationalform of Taylorism. The overall result may be a very unequalaccumulation of intellectual capital. Paradoxically, the modernglobal economy may end up sharing some aspects of the agrariansocieties that have been displaced by modern nation states.     

A proposal for a democratic market economy

A type of market socialism is proposed for the United States both as a means of attaining more social equality than private ownership of corporate business makes politically and economically feasible, and of advancing a whole range of liberal purposes by undermining direct and indirect political power of the conservative business community. It is proposed to transfer ownership of corporate business to a system of local-government investment funds under specified national regulation. Such a system could retain all the economic advantages of capitalism, while facilitating better control of inflation, and would have genuine political feasibility in the United States.     

Nationalism, development and integration: the political economy of Ernest Gellner

In this paper, we show how in Gellner we can find a stimulatinganalysis of the institutional equilibria that characterise agrarianand industrial society and the conditions that make possibleinstitutional change from one equilibrium to another. This allowsa convincing account of the reasons why some countries industrialisedbefore others and why nationalism had such an uneven impacton the development of market economies. We consider the relationbetween Gellner's analysis and other theories of organisationand point out how Gellner can help to solve some paradoxes thatarise in these theories. We also argue that joining Gellner'scontribution to the analysis of the positional nature of statusand power reinforces his conclusion about the necessary stagnationof agrarian societies and the necessary (over)accumulation ofdifferent forms of capitalism. We conclude by examining theimplications of his analysis for the process of globalisationand its challenge to national states.     

The Great Recession and social preferences: Evidence from Ukraine

We use detailed survey data to document stark differences between West and East Ukraine when it comes to household attitudes toward market-based economies and democratic institutions. Along both of these dimensions, Eastern Ukrainians are decidedly less supportive of liberal systems. We also find that economic attitudes changed in response to the global financial crisis. West Ukrainian households who were affected more extensively by the crisis were more disappointed with the market and private ownership, while in Eastern Ukraine economic attitudes became less pro-market across the board. Our evidence suggests that attitudes and values are determined by both deep-rooted factors and more transient macroeconomic shocks.     

LOCAL SERVICES OF GENERAL ECONOMIC INTEREST IN EUROPE. WATER SERVICES: WHAT ARE THE CHALLENGES?

ABSTRACT: This study was conducted within the CIRIEC International Scientific Commission ‘Public Services/Public Enterprises’ project on Local services of general economic interest. Compared to other sectors, the process of Europeanization has distinct features in the water field. At EU level, water policy is rather founded on the respect of common ambitious quality standards based on public health and environmental protection norms than the creation of an ‘internal market’. Therefore, the evolution of different models of governance, organization and supply have undergone specific changes. This study focuses on local and national diversity of water services and the broad outlines of current challenges and developments. It concludes that a key challenge is to guarantee the competent public authorities’ freedom of choice of management modes.     

From performativity to political economy: index investing,ETFs and asset manager capitalism

As a discipline, political economy has often been reluctant to engage with the details of market devices and practices. This weakens the microfoundations of its analysis of capitalist macro-dynamics and cedes unnecessarily large stretches of intellectual territory to economics. The performativity approach developed by Michel Callon offers a theoretical way out of this dual dilemma. It allows political economists to study ‘the economy’ directly by investigating the links between the diversity of market devices and the diversity of capitalism. The argument is illustrated by an analysis of the gradual, performative evolution of the investment intermediation market, where the traditional high-cost model of active asset management has been challenged by the emergence of a low-cost alternative in the form of index-tracking investment funds. Highlighting the distributive implications of this development, the current article shows that the financial innovation of exchange-traded funds played a crucial part in the completion of the socio-technical agencement of the ‘passive investor’. In contrast to the recently resurgent notion that the two approaches are incompatible, this article insists that the micro-sociological study of market devices fosters the analytical capacity of political economy by opening up new perspectives on the macro-dynamics of contemporary capitalism. In the case at hand, it brings into sharp relief the contours of the emerging constellation of ‘asset manager capitalism’.     

Does corporate social responsibility reduce financial distress risk?

This paper examines how corporate social responsibility (CSR) affects the level of financial distress risk (FDR). Using a sample of 1201 US-listed firms during 1991–2012, our results indicate that firms with higher CSR levels have lower FDR, suggesting that a better CSR performance makes firms more creditworthy and have better access to financing, which is rewarded with less financial defaults. This finding is robust to using alternative proxies of FDR, to controlling for potential endogeneity, and is mainly driven by the community, diversity, employee relations, and environmental dimensions of CSR. Moreover, this relationship is more prevalent in firms with strong governance mechanisms and high product market competition. It is also more exacerbated for less distressed firms and during non-crisis periods. Overall, our findings suggest that the adoption of CSR practices comes with less distress and default risks, likely leading to a more attractive corporate environment, better financial stability and more crisis-resilient economies.     

创造性资本主义与资本主义的创造性消亡

资本主义具有一种内生的创造性,同时又具有一种内生的非创造性,创造性和非创造性悖论根源于资本主义经济的内在矛盾。随着世界市场的不断成熟和全球资本主义经济矛盾的不断加深,资本主义需要寻求新的自我拯救之道。创造性资本主义试图同时利用人性中的利己主义与利他主义。创造性资本主义预示着资本主义终将创造性地消亡,它对未来中国社会主义市场经济体制改革具有重要的启发意义。