Institutional coherence and macroeconomic performance

Abstract

Peter Hall and David Soskice suggest that institutional coherence is conducive to successful macroeconomic outcomes. Countries with corporate governance arrangements, industrial relations systems and other institutions that are congruent either with those of a coordinated market economy or with those of a liberal market economy are expected to perform better, while nations with less coherent institutional frameworks are expected to fare worse. I use a measure of institutional coherence devised by Peter Hall and Daniel Gingerich and another I develop here to assess the impact of institutional coherence on variation in economic growth and employment growth across 18 affluent countries over the period 1974–2000. The results offer little support for the institutional coherence hypothesis.