Varieties of Capitalism

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.

Multinational enterprises and the Sustainable Development Goals: An institutional approach to corporate engagement

“…In an effort to characterise the nature of countries' institutional infrastructures, the ''varieties of capitalism'' approach distinguishes between liberal and coordinated market economies (Hall & Soskice, 2001). Companies operating in liberal market economies rely heavily on hierarchies and competitive market arrangements, whereas companies operating in coordinated market economies depend on their embeddedness in broader societal networks (Hall & Soskice, 2001).…”

“…In an effort to characterise the nature of countries' institutional infrastructures, the ''varieties of capitalism'' approach distinguishes between liberal and coordinated market economies (Hall & Soskice, 2001). Companies operating in liberal market economies rely heavily on hierarchies and competitive market arrangements, whereas companies operating in coordinated market economies depend on their embeddedness in broader societal networks (Hall & Soskice, 2001). Following such institutional differences, North American companies, influenced by the liability orientation of American institutions (also known as the ''substantial equivalence principle''), tend to have a defensive/reactive sustainability approach (Doh & Guay, 2006).…”

Theorizing ideational continuity: The resilience of neo-liberal ideas in Europe

“…58 See Gualmini and Schmidt in this volume; see also Schmidt 2002, and Fioretos 2011. 59 See Lehmbruch andSchmitter 1982 andSoskice 2001. 1980s and 1990s, they have remained. 60 In the 2000s, moreover, policy makers, academics, and commentators sometimes drew on these diverse approaches to attack neo-liberalism, in particular using the example of the economic successes of countries farthest away from neo-liberalism -not only the Nordic countries with their continuing social-democratic traditions but also Germany, whose coordinated market economy suffered less from the housing boom and subsequent bust and which recovered much more strongly than, for instance, the more neo-liberal United Kingdom.…”

Shaping the Life Course: A European Perspective

“…A major characteristic of institutional systems is that they rely on complementarities between various institutional areas (see Hall and Soskice 2001;Amable 2003;Bosch et al 2009). This property has two main consequences for the analysis of life transitions.…”

“…The nine European countries on which this book's analysis is based cover the whole range of both varieties of capitalism (coordinated market economies versus liberal market economies; see Hall and Soskice 2001) and traditional typologies of welfare state systems (social democratic, conservative and residual; see Esping Andersen 1990, Table 1.2). In addition the inclusion of Hungary expands the range to include post-transition economies with their own distinctive legacy or path-dependent evolution.…”