Varieties of capitalism and growth regimes: the role of income distribution

Abstract

This article proposes a comparative political economy framework for analyzing the links between varieties of capitalism (VoC) and growth models, with a focus on the role of income distribution in the international trade imbalances leading up to the global financial crisis of 2008. For a panel of 18 countries over the period 1981–2007, we find that strongly rising top income shares contributed to debt-led growth and current account deficits in major liberal market economies (LMEs), whereas pronounced falls in the wage share contributed to export-led growth and current account surpluses in coordinated market economies (CMEs). We discuss how, against a global trend of liberalization and de-unionization, the institutional features originally thought to establish prosperous (and stable) VoC were linked to the emergence of distinct but similarly inequitable (and unstable) growth models in LMEs and CMEs.

Varieties of the rat race: working hours in the age of abundance

“…Also, the conventional view that coordinated market economies (CMEs) are more immune to adverse shifts in income distribution than liberal market economies (LMEs) was recently called into question by the emergent growth model perspective following Baccaro and Pontusson (2016). Behringer and van Treeck (2021) argue that persistent differences in institutions, against a global trend of liberalization and de-unionization since the early 1980s, help explain why LMEs experienced much stronger rises in top household income shares, but smaller decreases in the economy-wide wage share, than CMEs, despite similar increases in broad measures of income inequality such as the Gini coefficient of household income.…”

Varieties of capitalism and the base of pyramid population segment in affluent economies: Discussion on entrepreneurship financing and skills development

“…However, the focus of most of these studies has been on redistribution and taxation strategies (e.g. Cahuvel and Bar-Hain, 2016;Behringer and van Treeck, 2017). An important role that entrepreneurship can potentially play in uplifting BOP population segment has been rather under-researched, and its analysis from the perspective of VOC has been very limited.…”

Reconsidering macroeconomic policy prescriptions with meta-analysis

“…From a macroeconomic perspective, this consensus featured tight fiscal and monetary policies (due to their supposed low effectiveness and inflationary tendency) as well as financial, trade and labor market deregulation (because of their supposed structural inefficiencies due to extensive policy interventions). While these policies generated the "Great Moderation" (Stock and Watson 2003) of low inflation and low business cycle volatility, under the surface they bred inequality, trade imbalances, private debt accumulation as well as subdued growth and labor market performance (Behringer and van Treeck 2021;Hein et al 2017;Dosi et al 2013). Heterodox approaches pointed to these problems and questioned the mechanisms and implications of the underlying New-Neoclassical Synthesis approach (Arestis and Sawyer 2006;Arestis 1996;Arestis and Sawyer 2004;Hein et al 2008) (Lavoie and Godley 2006;Dullien 2012;Dosi and Virgillito 2021;Haldane and Turrell 2019;Caverzasi and Russo 2018;Louçã et al 2021;Turner 2010).…”