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The object of this book is to elaborate a new framework for understanding the institutional similarities and differences among the developed economies, one that offers a new and Intriguing set of answers to such questions” (1-2) * VOCE Is actor- centered: * “which is to say we see the political economy as a terrain populated by multiple actors, each of whom seeks to advance his Interests In a rational way In strategic interaction with others” (p. ) however all actors are not equally important: * “this s a firm-centered political economy that regards companies as the crucial actors in a capitalist economy’ (p. 6) * relational conception of firms, coordination problems (how institutes may influence firms) * institutions offer firms opportunities * Coordinated Market Economies (CAME) versus Liberal Market Economies (LAME) * Ideal, typical varlets. Political economies do not resemble these Ideals perfectly. These are the most efficient extremes. Institutions in five different spheres: * Industrial relations: How Is wage bargaining and bargaining over working conditions organized?
LAME: Company based wage bargaining; few rights to work-based representation; low unionization * CAME: Co-ordination of wage determination involving employers and union organizations; Importance of employee participation wealth the firm’s decision-making (e. G. Germany: high degree of worker protection) Education/training systems: How Is It secured that the working force has the skills required for the company to be competitive? * LAME: Limited vocational training; only modest connection of higher education to industry * CAME: Well-established vocational raining (Involving firms and unions).
Higher education system delivers strong supply of scientists and engineers (e. G. Germany: a link between industry and school) * Financial system/market for corporate governance: How do firms get access to the capital required for them to finance their * LAME: High levels of stock market capitalization; threat of takeovers activities? Determine firm governance (firms rely on the stock markets to finance activities) * CAME: Stable shareholding; hostile takeovers difficult; banks central to monitoring ND financing of companies; perhaps limited investment in new technology and industry (e. . Germany: companies can be “bank-oriented”) * Inter-firm relations (cooperative/competitive): * What type of relationship do firms have with their own suppliers and with their rivals? * LAME: Inter-firm relations governed by arms-length legal relations; strong tradition of anti-collusion competition (read: cartels) law (fierce competition) * CAME: Consensus-based inter-firm relations, often through business associations (example: the board director of one company can be the board director f several others and as such also be Interested in the well-being of competitors) http://en. Kipped. Org/wick/elongating_directorate * Intra-firm relations: concerns ten structure AT Tells * LAME: top-managers enjoy significant unilateral powers. Higher Job mobility (the US) * CAME: consensus decision-making. Top managers need to secure agreement with employee representatives . Longer average Job tenure. * Institutional complementarily * The notion that the functioning/efficiency of one particular institutional Truckee in one area depends on the structure of institutions in other areas. * Synergies: “Since many of these institutional practices (Synergies.
Positive-sum. ) enhance the effectiveness with which others operate, the economic returns to the system as a whole are greater than its component parts alone would generate” (27) * Comparative institutional advantage * “… The institutional structure of a particular political economy provides firms with advantages for engaging in specific types of activities there” (p. 37) * Think: “comparative advantage” LAME better at radical innovation (decentralization, lower barriers to entry, flexible capital). Bio-tech, tech-oriented innovation business * CAME better at incremental innovation (longer time horizons, stability, specialized labor, networks and learning). * Mechanical, engineering * Implications in relation to globalization: breaks with the hyper-globalization thesis according to which the common pressures generated by globalization lead to convergence on one (liberal) model of capitalism * Rather advocate: dual convergence thesis