Socio-Economic Review Advance Access originally published online on October 14, 2008
Socio-Economic Review 2009 7(1):7-34; doi:10.1093/ser/mwn020
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
This article appears in the following Socio-Economic Review issue: SPECIAL ISSUE: Changing institutions in developed democracies: economics, politics and welfare [View the issue table of contents]
Institutional change in varieties of capitalism
1 Minda de Gunzburg Center for European Studies, Harvard University, Cambridge, MA, USA
2 Department of Political Science, Northwestern University, Evanston, IL, USA
Correspondence: phall{at}fas.harvard.edu
Contemporary approaches to varieties to capitalism are often criticized for neglecting issues of institutional change. This paper develops an approach to institutional change more extended than the one provided in Hall and Soskice (in Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, Oxford, Oxford University Press, 2001) but congruent with its varieties-of-capitalism perspective. It begins by outlining an approach to institutional stability, which suggests that the persistence of institutions depends not only on their aggregate welfare effects but also on the distributive benefits that they provide to the underlying social or political coalitions; and not only on the Pareto-optimal quality of such equilibria but also on continuous processes of mobilization through which the actors test the limits of the existing institutions. It then develops an analysis of institutional change that emphasizes the ways in which defection, reinterpretation and reform emerge out of such contestation and assesses the accuracy of this account against recent developments in the political economies of Europe. The paper concludes by outlining the implications of this perspective for contemporary analyses of liberalization in the political economy.
Key Words: capitalism • varieties of • economic reform • Europe • globalization • institutional change • institutions