THE INFLUENCE OF CO-ORDINATION ON LABOUR MARKET ON THE EFFECTIVENESS OF AN ECONOMIC MODEL

Abstract

The goal of this paper is to comparative models of the political economy. I use Hall coordination index to conform the institutional features of liberal and coordinated market economies. In coordinated markets economies firms depend more heavily on non-market relationships to coordinate and to construct their core competencies. These non-market modes of coordination generally are based on more extensive relational or incomplete contracting, network monitoring inside networks. In liberal market economies firms coordinate their activities through hierarchies and competitive market arrangements. The political economy is a terrain populated by multiple actors: individuals, firms, producer groups or governments. However, this is a firm-centered political economy that regards companies as the crucial actors in a capitalist economy. They are the key agents of adjustment in the face of technological change or international competition whose activities aggregate into overall levels of economic performance. In both economies reveal institutional complementarities across sub-sphere of the macroeconomics. It can explain cross-national differences in the change of institution and efficiency. It conform the impact of complementarities in system of labor market regulation on rates of growth.