Varieties of Capitalism and the Limits of Entrepreneurship Policy: Institutional Reform in Germany’s Coordinated Market Economy

Abstract

Recent debates on the comparative institutional advantages of diverse national models of capitalist development tend to differentiate between liberal market economies like the United States dominated by market coordination and coordinated market economies like Germany that highlight nonmarket coordination schemes. Institutional advantages of the liberal type inform reform initiatives in coordinated market economies, involving the domain of entrepreneurship policy. These efforts in the liberal reshaping of coordinated varieties of capitalism by the use of entrepreneurship policy need to be critically assessed. The case of entrepreneurship policy in Germany provides related insights on the prospects of these efforts. It gives evidence for the suggestion that the systemic character and institutional embeddedness of entrepreneurial activity need to be adequately reflected in the design of entrepreneurship policy.