Comparative Economic Systems Research Articles

The revival of comparative economic systems research

AbstractThis essay offers an overview of the state and perspectives of comparative economics in Europe. The starting point is the publication of the collected works of Mario Nuti, but the overview covers several Handbooks and collections as well as individual contributions. The big picture of the post-transition period highlights the relevance of “old” comparative economics, especially when interpreting illiberal practices in the post-communist Europe and the debate on the nature and limitations of the Chinese market socialism.

János Kornai on planning and disequilibrium: Theoretical dilemmas and solutions

AbstractJános Kornai has achieved a wide-scope multifaceted theoretical analysis moving from Marx to Walras-Lange, then to post-Keynesian disequilibrium economics, and eventually, to Hayek and economic institutionalism. Such a travel is not without meeting dilemmas that Kornai has had to struggle with and opt to resolve them in some way. Such process is illustrated first with a planner's dilemma. On the one hand, Kornai has elaborated on – together with Tamás Lipták – a mathematically ‘super’ solution to finding the optimal plan through a two-level planning procedure. But once implemented the latter has appeared to be too slow, and Kornai has rejected Lange's ideas for Hayek's criticism against central planning. A second dilemma is about how to analyse a centrally-planned shortage (excess demand) economy in which those industries privileged in the planners' pecking order priorities were producing an excess supply of (useless) goods. Kornai did not find a solution in the current disequilibrium economics but, instead, in a ‘lax’ communist bureaucracy generating a soft budget constraint. The third dilemma is that Kornai's views about disequilibria have not converged with the Post-Keynesian disequilibrium models. The latter were unable to conceive a simultaneous excess demand and excess supply in a same market, due to their so-called shorter-side rule. Instead, Kornai has found a solution that fits with theorising the observed micro (or even infra-micro) disequilibria in a Debreu's book, some years after having published a hard criticism of neo-classical microeconomics. A final question is raised: is Kornai's theory a decisive contribution to the analysis of comparative economic systems – that no one denies – or has he added some value to a more general theory of economic disequilibrium?

The return of comparative economic systems: An extension of János Kornai's contribution

AbstractKornai profoundly contributed to place the system to the centre of economic analysis. His multidisciplinary system paradigm is fundamental for understanding and analysing the variety of economic solutions and its consequences. The strong scientific foundation of Kornai's approach provides a fruitful opportunity to further develop and apply it to the most fundamental economic issues, such as explaining the different performance and strength of different economies and societies. The inclusion of a multidisciplinary perspective has the significant advantage of keeping under control non-economic factors that influence economic activities and performance and allows to account for the real behaviour and evolution of economies and societies. It can also contribute to explain the resilience of economic and social systems and economies. The paper takes stock of the importance of Kornai's analysis and method and applies them to better understanding the nature and working of the European Union and its difficulties. Based on Kornai's approach, the paper considers how the European Union should evolve to make itself workable and resilient in front of a threatening international environment.

The tradeoff between economic freedom and economic performance: a classroom exercise

This study describes a straightforward classroom exercise that highlights the general tradeoff between the level of economic freedom and economic performance (measures of a population’s well-being) using the Index of Economic Freedom (IEF) that is published annually by the Heritage Foundation. The classroom exercise focuses on the relationship between economic freedom and economic performance and is amenable to either group or individual effort by way of a brief writing project or oral presentation. The classroom exercise is tailored to both principles of economics students and those in various upper-level economics courses (e.g., comparative economic systems, public choice, and introduction to econometrics).

Islamic Economics: A Survey of the Literature

Economics, as one of the sciences of the new age, deals with people and things and has the concepts and characteristics of the science of the new age, such as falsifiability and prediction. Economics disproves its theories through repeated experiments and experiments. "Islamic economy" is not scientific in the sense of a new science and it does not have scientific characteristics and features except (comparative concepts) which presents a different methodology for studying its principles. In Islamic economics, there are fixed and variable rules and concepts, and comparative concepts, and by accepting the "comparative concepts thesis", Islamic economics will be able to discuss what is and what should be, and while presenting the best economic system that is in accordance with human nature and God's commandments, develop new concepts and theories, or employ them and harmonize and adapt them with Islamic principles and ethics. The comparative concepts of Islamic economics have scientific characteristics and based on the principles of the subject, it explains behavioral patterns that are falsifiable. In this research, the analysis and interpretation of the nature of Islamic economy and the researchers conducted in this field have been done in the library method. This research shows that the extensive literature on the Islamic economic system is still being created and most of the issues have not been carefully considered. Many of the important issues raised in this paper are not resolved, but merely determined. However, such problems may be of interest not only to Islamic scholars, but also to Western experts in money and banking. By examining the specific issues of the Islamic economic system more closely, many important problems in the general economy as well as comparative economic systems can be solved.

Resisting Narrative Closure: The Comparative and Historical Imagination of Evsey Domar

Abstract This article explores the peculiar approach to narrative argumentation taken by the MIT economist Evsey Domar (1914–97). Combining biography and textual analysis of his academic work reveals that Cold War themes permeated Domar's later research in comparative economic systems, Soviet economics, and economic history—and yet, Domar employed these themes in ways that challenge traditional understandings of postwar American social science. Against the heady partisanship and epistemic self-confidence that characterized his milieu, Domar offered conclusions that emphasized ambiguity, complexity, and open-endedness. He achieved this, the article argues, by thinking not only comparatively but also historically and speculatively. This article takes a journey through a number of Domar's historical and speculative narratives to demonstrate that what Domar was ultimately doing in many of his works was resisting normative, literary, and scientific closure.

Martin Weitzman: A Gift That Keeps on Giving

Martin Weitzman: A Gift That Keeps on Giving

Hanson , Philip Hendon-Moscow-Dorset: A Memoir (and Birmingham) (review)

REVIEWS 193 Hanson, Philip. Hendon-Moscow-Dorset: A Memoir (and Birmingham). Upfront Publishing, Peterborough, 2020. 208 pp. Illustrations. £10.00: $14.45: €11.45 (paperback). Philip Hanson is one of the two main pioneers of scholarly study of the Soviet economy in Britain (the other being the late Alec Nove). Focusing in turn on retail trade, foreign trade and technological innovation, his work in this area culminated in The Rise and Fall of the Soviet Economy: An Economic History of the USSR from 1945 (Harlow, 2003). After the collapse of the Soviet Union, he took part in research projects on the economy of post-Soviet Russia in the 1990s at the regional as well as national level (pp. 156–67). Now more or less retired, Hanson has given us in this memoir not only a wrily humorous account of his own life and career but also an illuminating overview of the emergence and development of a new academic subfield. Hanson found his métier through a serendipitous combination of circumstances. Reaching maturity at a time when national service had not yet ended, he was trained as a Russian interpreter by the army. He then studied economics at Cambridge, choosing the subject for its relevance to public affairs and in preparation for a career as an economist in government service and eventually in international organizations. However, he was not happy in his first posting, at the Treasury, and his initial contract was not renewed. Only then did he join the faculty of Exeter University, where he decided to combine his Russian with his economics, thereby becoming an analyst of the Soviet economy. He was to return to government service, at the British embassy in Moscow, but only briefly, until expelled in a ‘spy exchange’. There was one major exception to Hanson’s usual concentration on the economic aspect of Soviet Studies, and that was his enthusiasm for the original analysis of Soviet society embodied in the voluminous fiction and art of the dissident Russian philosopher, Aleksaner Zinov´ev. A section of the memoir is devoted to Zinov´ev and the evolution of his thinking (pp. 122–25). Most of Hanson’s research and teaching has been at the University of Birmingham’s Centre for Russian and East European Studies. He takes a positive view of CREES as a place where people work together harmoniously despite sharply conflicting political outlooks (pp. 94–95). Having been at CREES myself — I took Hanson’s courses on Soviet Economy and Comparative Economic Systems, wrote a PhD thesis under his supervision, and collaborated with him in follow-up research — I fully concur with that view. Much of the scholarly value of the memoir lies in descriptions of the many research projects in which the author has been involved and in the summaries of their results. He even discusses the theses of his two ‘most idiosyncratic’ doctoral students — Helene Ryding (on district heating in Soviet cities) and myself (on the Soviet family budget survey) (pp. 194–96). SEER, 99, 1, JANUARY 2021 194 Also of interest are Hanson’s accounts of his discussions with academic colleagues, businesspeople, government officials and military men on his many trips abroad. This gives us perspectives on issues and events not only from Moscow, London and Washington but also — for instance — from Accra, Almaty, Kaliningrad, Kyoto and Warsaw. Hanson concludes his memoir by confessing to a ‘smug’ confidence in the intrinsic value of his life’s work: ‘We [academics] know that what we do is worthwhile… We are trying to understand and explain’ (p. 199). Providence, RI Stephen D. Shenfield ...

Lesson Plans for Teaching with Parks and Recreation

Parks and Recreation was a hit NBC showed that aired from 2009 to 2015. The show contains numerous examples of economic concepts and principles that can be used in the classroom. We outline 5 lesson plans on topics from the show that can be used to supplement an instructor's current teaching. Topics include comparative economic systems, market structures, government bailouts, government intervention, and labor market discrimination. All of the scenes are available online at EconomicsOfParksAndRec.com

„Comparative (Bio)Economic Systems” in Terms of Social Responsibility: The Natural Environment – Between Ideal Capitalism, Utopian Socialism and Real-World Interventionism

Comparative judgements related to economic systems (along with pending political ideologies) represent a subject of investigation that, at first glance, appertains to the “ABC” of social sciences, although the “literacy” of policy-makers, business officials, or public opinion reveals surprising understanding flaws. The academic environment – where there is a tacit consensus on the interdisciplinary character of such an approach, on the perpetual relevance within the various (sub)disciplines, and on the somewhat exhaustion of the subordinated debates – remains subtly divided on a series of theoretical delimitations or historical evidence. This article aims to highlight a (sub)domain of the comparative analysis regarding the economic systems in which the literature is not as polarized as it is rarefied: what roots and reverberations does “social responsibility” have within the main economic systems and where and how its “ecological sustainability” component manifests itself? The present research targets to critically and originally review, in a “bioeconomic” key, the way in which social responsibility underlying sustainability is perceived, penetrated and practiced within pure liberal capitalism / market economy, canonical socialism / command economy, and real-world interventionism / mixed economy, offering both a priori insights and empirical illustrations.

Teaching comparative economic systems 25 years after the collapse of the Soviet Union

Twenty-five years after the collapse of the Soviet Union, we reflect on contemporary teaching of undergraduate comparative economic systems (CES). Using qualitative and quantitative measures, we consider how the field responded to the collapse by examining CES textbooks from the 1980s, 1990s, and 2000s. We also consider how the dissolution of the Soviet Union affected economics course offerings at the undergraduate level. Based on our findings, we suggest two strategies for reimagining CES for the 21st century by: (1) changing textbook organization and content, and (2) incorporating more comparative economic concepts throughout the undergraduate curriculum.

Baumol’s productive and unproductive entrepreneurship after 25 years

Purpose– The purpose of this paper is to consider the impact of Baumol’s work on entrepreneurship has had on framing the economic development puzzle.Design/methodology/approach– In many ways, the intuition behind the paper is straightforward. Entrepreneurs allocate their time and attention based on the relative payoffs they face in any given social setting. If the institutional environment rewards productive entrepreneurship, then the time and attention of entrepreneurial actors in the economy will be directed toward realizing the gains from trade and the gains from innovation. If, on the other hand, there are greater returns from the allocation of that time and attention toward rent-seeking and even criminal activity, alert individuals will respond to those incentives accordingly. The simplicity of the point being made is part of the brilliance in Baumol’s article. As with other classics in economics, once stated the proposition seems to be so basic it is amazing that others did not put it that way beforehand.Findings– It has been 25 years since Baumol published his paper in theJournal of Political Economy, and as pointed out, it has had a significant scientific impact. But to put things in perspective, James Buchanan’s “An economic theory of clubs” published in 1965 has accumulated roughly 3,500 citations, F.A. Hayek’s “The use of knowledge in society,” published in 1945 has over 12,000, and Ronald Coase’s “The problem of social cost” published in 1960 has over 28,000 citations. So Baumol’s paper would put him in rather elite company. The great strength of the paper is to focus the attention on the relative payoffs of productive, unproductive and destructive entrepreneurial activity. But one of the most significant disappointments of the subsequent history of this paper is a methodological one. The comparative case study approach that Baumol employed did not result in a renewed appreciation for narrative forms of empirical research in political economy. It could legitimately be argued that the sort of questions about the fundamental institutional causes of economic growth and development can only be captured with these more historical methods. Attempts to force fit this analysis into a set of methodological tools which have already revealed themselves to be inadequate to do justice of the role of institutions and disregard the underlying cultural norms and beliefs that characterize human sociability.Originality/value– In this paper, the authors will focus on the contribution made by Baumol’s 1990 paper on the field of comparative political economy, and in particular on the literature on transitional political economy. Section 2 places Baumol’s argument in the context of the failure of neoclassical growth theory. Section 3, the authors argue that although the Baumol framing was an improvement over the old comparative economic systems literature, contemporary transitional political economists have failed to fully realize the implications of the institutional revolution. They have therefore been unable to understand the causes of the heterogeneity of outcomes among those countries that transitioned from communism to the market economy in the 1990s. In Section 4, the authors argue that the political economy of transition will gain from a more sophisticated view of the economic process of the market economy, an appreciation of the entrepreneurial function, and a deeper understanding of the role of formal and informal institutions and their effect on entrepreneurship. The authors will illustrate the point with some examples from the recent history of the Russian political and economic transition. Credible commitment problems and the deficiencies of the institutional reforms of the early 1990s were responsible for the failure of reallocating the entrepreneurial talent that existed in the Soviet economy to productive economic activities. The framework can therefore be used to solve the puzzle of why the announced liberalization of Russian markets and privatization of previously state-owned resources led to economic stagnation, the growth of black markets, and the rise of organized crime, instead of economic development through the operations of smoothly operating markets. Section 5 briefly concludes.

Teaching Comparative Economic Systems: 25 Years after the Collapse of the Soviet Union

Teaching Comparative Economic Systems: 25 Years after the Collapse of the Soviet Union

Comparative Economics Systems in the Undergraduate Curriculum

This study reports on the status of Comparative Economics Systems (CES) courses in the U.S. undergraduate economics curriculum. The treatment of CES topics in introductory courses is examined through a survey of standard textbooks; findings indicate that the education of American students is highly parochial compared to international peers. To evaluate the status of CES at the advanced undergraduate level, we rely on survey data, searches of course catalogs, and an evaluation of available textbooks. We find course offerings in CES have declined noticeably since Foley and Pyle’s (2003) survey, with departments shifting to courses that study the economics of specific regions or countries. We suggest this is a mistaken strategy. Rather than considering comparative economics systems as a niche course, a subset of theories of economic development or of the peculiarities of cross-country studies, we argue that economics is comparative by definition. Accepting this premise suggests we need to think of new methods for treating traditional subjects and the way comparative economic systems is taught.

Institutional Resilience and Economic Systems: Lessons from Elinor Ostrom’s Work

Comparative economic systems literature deals extensively with ‘systemic functions’ and ‘performance criteria’ such as growth, efficiency and equity but rarely mentions the topic of resilience. This paper focusses on the issue of resilience while drawing several important lessons from the contributions in this respect of 2009 Nobel Prize in Economics co-recipient, Elinor Ostrom: The effects of alternative institutional arrangements and social norms as a source of both resilience and vulnerability; the problem of ‘highly optimized tolerance’ to specific sources of uncertainty; polycentricity as a possible structural solution to sustainability problems. A key point is that resilience is more than mere ‘absorptive capacity’ or ‘speed of recovery’: it depends on innovation and creative socio-cultural adaptations made possible by flexible and polycentric institutional processes. That has important implications for the ways we define and assess institutional performance and institutional design.

Quick guide to New Institutional Economics

The old field of Comparative Economic Systems lacked a theoretical framework, which New Institutional Economics now provides. The paper is a brief guide to NIE: its strength, weaknesses, policy implications, and future tasks. The intellectual interest in the NIE approach is directly related to the gap between prevailing economic property rights (institution) and best practice (most productive) arrangements. A large productivity gap on a national scale is mainly found in two circumstances: in low income countries that fail to import and adapt existing technologies, and in high income countries failing to cope with new technologies, such as digitization.

Enrico Barone's ‘Ministry of Production’: Content and Context

Enrico Barone's famous article on economic planning, ‘Il Ministro della Produzione nello Stato Collettivista’ (‘The Ministry of Production in the Collectivist State’), which showed the theoretical possibility of an economically efficient collectivist planned economy, was published in Giornale degli Economisti in 1908. Barone's article has been widely cited, particularly in the comparative economic systems literature, but it has not been very widely read or analysed in recent years, and there is not much literature that places Barone's ‘Ministry’ model in the context of his other works or in its historical, social, or ideological context. The aims of this article are: (a) to analyse and clarify Barone's model in depth; (b) to place it in the context of Barone's other writings and the literature on the subject; and (c) to examine the apparent contradiction between Barone's hostility to socialism and his attempt to formulate the pure theory of the collectivist economy.

State capitalism and the rent-seeking conjecture

The notion that state capitalism (an economic system “in which the state functions as the leading economic actor and uses markets primarily for political gain”) is a new form of capitalism emerging in the global arena has been recently advanced by several authors. This paper explores the problem of the nature of this system in the light of these claims to novelty. What are its main features as described by these authors? Is state capitalism distinctive from other forms of capitalism or other types of economic systems? Are we really witnessing the emergence of a new type of economic system? To address such questions the paper starts by trying to place the model of state capitalism within the traditional comparative economic systems framework. The inconclusive result leads to a different approach in which the concept of rent-seeking society is used to underlie the structural similarities between mercantilism, real life socialism and state capitalism. The article argues that the conjecture that what has been labeled “state capitalism” is yet another form of rent-seeking system is both robust and worth further investigating.

Logics of local actors and global agents: divergent values, divergent world views

PurposeThis paper seeks to develop a theoretical explanation of conflicts and incompatible interpretations of events between agents of multinational corporations (MNCs) and actors present in certain host countries. It aims to situate the argument in comparative economic systems as a part of a broader social system. The socio‐economic system can be modeled using institutional theory, particularly using Scott's three pillars and the concept of formal and informal institutions. Within different socio‐economic systems a dominant logic is developed, and this becomes internalized among actors and agents as behavioral scripts.Design/methodology/approachThe paper uses a multi‐level and multi‐disciplinary conceptual analysis, developing a model of dominant logic and behavioral scripts with MNC agents and traditional emerging economy actors.FindingsMNC agents and traditional emerging economy actors have difficulty comprehending the logic of the other, creating a fertile context for conflict.Research limitations/implicationsAn ideal type template is developed that can be used for empirical investigations focusing on situations where disagreement and conflict occur when MNCs operate in traditional emerging economies.Practical implicationsBy integrating the authors' conceptualization into training for expatriate managers, the potential for conflict can be reduced.Originality/valueThis multi‐level and multi‐disciplinary model allows grounded development of understanding of conflicts or potential conflicts in the MNC agent‐traditional emerging economy actor context.

Book Reviews

Kenneth Kuttner of Williams College reviews “From Financial Crisis to Global Recovery” by Padma Desai. The EconLit abstract of the reviewed work begins: Presents an introduction for economics and finance undergraduate students to the financial crisis, using a combination of scholarly research and narrative. Discusses the financial crisis origin; banking sector stress tests -- the United States versus the European Union; whether the U.S. economy is on the mend; global recovery prospects -- North America and Europe, Asia, and South America; hedge funds and derivatives, credit default swaps, and rating agencies; U.S. and EU regulatory proposals -- how strict and how cooperative; the dollar's future as a reserve currency; the Great Depression and the current financial crisis; and the future of American capitalism. Desai is Gladys and Roland Harriman Professor of Comparative Economic Systems and Director of the Center for Transition Economies at Columbia University. Index.