Socio-Economic Review Advance Access originally published online on February 13, 2007
Socio-Economic Review 2007 5(2):261-286; doi:10.1093/ser/mwl025
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Open systemness and contested reference frames and change. A reformulation of the varieties of capitalism theory*
Political Science, University of Amsterdam
Correspondence: k.u.becker{at}uva.nl
The theory of Varieties of Capitalism is conceived as a systems theory. Without using systems theoretical language, different varieties are constructed as entities whose parts are complementary. Critics argue that this thwarts understanding of institutional change. While joining in this criticism I will argue that a systems perspective, more precisely a perspective of open and relatively loosely ordered social entities revealing systemness, is appropriate for analyzing politico-economic development. For human survival, political economies need this systemness. A political economy cannot be competitive without a considerable degree of functionality. But a functionalist logic automatically leading to systemness does not exist. As the parts of political economies (firms, stock markets, state departments) are relatively autonomous, the relevant actors often do not know what is functional, and reference frames, consisting of economic, social and environmental goals, are contested. Moreover, there are equi-functional ways to bring about identical results. These aspects of openness are the basis for institutional change that is kept in check by forces of path inertia.
Key Words: capitalism—varieties of • systems theory • open systems • institutional change • uncertainty • path dependency
* For critical comments and suggestions I would like to thank Jonathan Zeitlin and two anonymous reviewers, Brian Burgoon, Peter Hall, Martin Höpner, Peer Hull Kristensen, Kathleen Thelen, and the participants of the panel on Comparative Capitalism and Institutional Change at the Annual SASE Meeting, Budapest, June 30–July 2, 2005, the seminar on The Dynamics of Varieties of Capitalism as Open Systems: A Critique and Reformulation, Center for European Studies, Harvard University, February 6, 2006 and of the workshop on Institutional Competitiveness of the Center of Business and Politics, Skagen, Denmark, March 10–11, 2006. For technical assistance, I have to thank Franca van Hooren and Aimee Rindoks.