Globalization, liberalization, and national capitalisms

Abstract

In an era of rapidly expanding international trade, investment, and capital flows, the capacity of national authorities to exercise meaningful coordination of the economy is being called into question. One interpretation is that globalization is putting an end to nationally-distinct capitalisms: globalization is driving liberalization, liberalization is eroding sovereignty, and the final outcome is convergence on some kind of Anglo-Saxon, deregulated form of capitalism. This paper offers an alternative understanding of the relationship between globalization, liberalization, and nationally-rooted capitalisms. It puts forward three basic propositions: (1) that the turn towards a discourse of liberalizing reform stems as much from political and institutional considerations as from international economic pressures; (2) that liberalization generally entails a transformation of the purposes and forms of public coordination of the economy, as opposed to their eradication; and (3) that convergence is precluded both by intellectual disagreement as to the virtues of the Anglo-Saxon model and by differential institutional and political capacity to emulate this model. Taken together, these propositions suggest that rather than mechanically translating international pressures into the domestic arena, liberalization is itself defined and refracted by the political and institutional context into which it is imported.