Comparative Political Economy Research Articles

Distributive cycles in the export-led growth model: On the macroeconomics of a pro-labor shift in Central and Eastern Europe

Abstract This article aims to reassess a stylized fact, increasingly well-established in the Comparative Political Economy scholarship, that Central and Eastern Europe (CEE) economies exhibit characteristics of the so-called export-led growth (ELG) model. We can confirm the ‘ELG in CEE’ hypothesis by developing and testing a Goodwinian distributive cycles’ macroeconomic model focused on the productivity–employment–wage share nexus. Moreover, our approach allows us to shed light on the apparent contradiction between ELG characteristics and the dynamic wage and employment growth experienced in the region after the global financial crisis (GFC) by exploring the possibility of a productivity-induced shift within the ELG model. We conclude that CEE countries experienced technical upgrading, which allows them to maintain export competitiveness despite a visible pro-labor shift in the income distribution.

Special section introduction: epistemic politics in international and comparative political economy

ABSTRACT Economic orthodoxy has faced multiple challenges over recent years, ranging from the global financial crisis and economic populism to the Covid-19 pandemic and the spectre of stagflation. This has generated significant policy innovations, like quantitative easing and the furlough schemes, while heterodox economic ideas (briefly) gained notoriety. Yet these shifts have frequently been grafted onto pre-existing institutional and discursive templates, anchored by the assumption that they represent a temporary deviation from ‘normal’ equilibrium conditions. To make sense of these dynamics of crisis, change and continuity, this special section showcases an ‘epistemic politics’ approach that foregrounds the political life of economic knowledge. It is framed around three questions. What has been the role of economic knowledge and expertise in shaping policy and regulation over the past decade? To what extent have dominant economic ideas, theories and models been impacted by political conflicts and emergent issues? How have policy makers navigated economic crises and uncertainty through cognitive and discursive practices? This introductory paper sets out the ambition for the special section by defining our understanding of epistemic politics, before detailing the threefold contribution it makes to wider scholarship in IPE and CPE. It concludes with an overview of the five papers.

Why We Need Minimum Wages: Pay, Recognition, and Economic Citizenship

Statutory minimum wages have become an important tool for regulating labor markets. One major reason is the decline in collective wage bargaining. But how can minimum wages be justified? We show that their best justification does not lie in their economic effects but in the respect for social contributors that they express. The article takes an innovative interdisciplinary approach, bridging political philosophy and comparative political economy. We first discuss existing justifications in political practice and theory. We then show how a distinctive and robust justification should regard minimum wages as paying necessary respect to those who fulfill their obligation to contribute to social cooperation. Our justification thus suggests a new concept of economic citizenship and advances recognition theory applied to work. We outline further implications of the argument, such as the desirability of setting minimum wages through collective bargaining, and a tentative case for a maximum income.

The institutional dimension of the inequality–corruption nexus: A varieties of capitalism assessment

AbstractAre unequal societies prone to the abuse of economic power to influence political decisions for private gains? We investigate how changes in inequality affect changes in corruption, controlling for comparative political economy factors. Our varieties of capitalism (VoC) approach explains corruption trends from an institutional viewpoint: liberal market economies (LMEs) exhibit lower corruption despite having high inequality. Coordinated market economies exhibit lower inequality but higher corruption, while state‐led non‐liberal economies have low inequality despite showing a range of degrees of corruption. Resource exporting economies show high corruption as well as inequality, akin to developing countries despite having higher national incomes. The relationship between changes in inequality and corruption diverges between the different VoC: strongly positive in coordinated and state‐led market economies, of an unclear sign in resource‐exporting economies, weak in resource‐poor developing countries, and downright negative in LMEs. Institutions are thus critical mediators of the socioeconomics of corruption.

Reforming School Choice Systems to Reduce Segregation in Schools: A Comparative Political Economy Study of Education Reform in Belgium, Chile, and the Netherlands

ABSTRACT This study offers a comparative examination of desegregation policy reforms in Belgium, Chile, and the Netherlands, addressing equity reforms to universal school choice systems. Through an analysis of the reform trajectories, we explore the evolution of policies, the causal mechanisms of change, efforts to institutionalize policies, and the sources of resistance to reform. We then undertake a cross-national comparison to discern trends and confirm or disconfirm theorized causes. Policy strategies from each context included nondiscrimination policies, fiscal incentives, and eventually reform of admissions procedures. Causal mechanisms facilitating equity reforms included shifts in political context, grassroots mobilization, generated focusing events through scholarly work and reports of civil society and transnational actors, and effective framing. Oppositional forces from non-state school networks and middle-class/white parents emerged in each context, affecting reform design and the path to institutionalization, but were unable to block reforms. The resulting reforms in each context were the products of compromise that retreated from deeper structural changes, likely mitigating the effects of reforms on school-based segregation.

Calibrating Ukraine’s Growth Model: How Can Ukraine Emulate Poland’s Growth?

This study provides a comparative analysis of the economic growth paths of Ukraine and Poland from a growth‑model perspective and determines how to calibrate Ukraine’s growth model to converge with Poland’s booming economy. The methodology comprises an approach to operationalizing growth models for GDP growth decomposition into “import‑adjusted” demand components, drawing on national input‑output data from 2000 to 2019. I found that from 2000 to 2003, both European economies relied on a combination of exports and domestic consumption. Expanded trade integration and an FDI boost after Poland joined the EU in 2004 spurred the Polish growth model’s shift to a distinctively export‑led, FDI‑driven strategy with accelerated GDP growth rates. In Ukraine, in the wake of the great financial crisis, I identified a transition to a consumption‑led growth model that, along with a declining investment component of aggregate demand, led to fading growth rates. An analysis of sectoral contributions to GDP growth revealed that avoiding deindustrialization in Poland underpinned the country’s export‑led strategy, unlike Ukraine, which underwent a key sectoral shift from manufacturing to a commodities‑based orientation after 2008. Both these economies demonstrated a high level of integration into global value chains, focusing on labor‑intensive manufacturing and services, but Poland has outperformed Ukraine in terms of share of high value‑added exports, which increased after EU accession. Following the Polish pattern, I propose that Ukraine’s growth model should activate the FDI driver of economic growth, upgrading the export structure and moving up value chains to unlock the country’s growth opportunities. The study represents the first comparison of Ukraine’s and Poland’s economic growth paths that traces the changes in dominant final demand components and macro‑sectors in the two countries’ economic growth profiles. This paper contributes to the comparative political economy literature on the growth models of peripheral economies, providing insights that can inform policies for growth model transformation.

The comparative political economy of job creation: European growth and employment models

ABSTRACT Recent studies within Comparative Political Economy have sought to identify European growth models by analysing the relationships between the institutional framework, income distribution and aggregate demand. This paper contributes to this debate by examining the strategy for unemployment reduction and the sectoral drivers of output and employment growth as core parts of any growth model. We propose a new analytical framework that focuses on three aspects of the economy: (1) the drivers of demand growth, (2) the determinants of the evolution of unemployment through Okun's law and (3) the sectoral patterns of output and employment creation. This approach, which considers both supply and demand aspects, is applied to the cases of Italy, Spain, the United Kingdom, Germany and Sweden before and after the 2008 crisis, and has the potential to refine the taxonomy of European growth models.

T. Robert Malthus's Comparative Political Economy of Prudential Restraint

Abstract Examination of the second and subsequent editions of T. Robert Malthus's Essay on the Principle of Population shows that the author created a more expansive examination of his political economy of population than that of the simple model in the Essay's first edition. In subsequent editions, the simple, ecological model gives way to a sophisticated general model of a commercial society with property rights, the rule of law, marriage laws similar to those of the British Christian tradition, and expanded markets. The result was not the “dismal” prognostication that Malthus is often identified with. Rather, he was reasonably optimistic that steady growth in per capita income could be accomplished along with a rising population. Biology could never be conquered, but within the right institutional context, reason might interrupt its career.

What lies behind export-led growth? An inquiry into the role of price and non-price competitiveness

The paper enters the current debate at the intersection of comparative political economy and international trade on the role of price and non-price competitiveness in influencing export. Through an econometric exploration, we identify price competitiveness as a non-negligible factor in driving export for a set of Organisation for the Economic Co-operation and Development (OECD) countries from 1994 to 2019. The documented price sensitiveness, combined with the institutions and policies adopted to promote export-led growth, casts an unsettling light on the prospects for a recovery, particularly for the Euro area. These worrying conclusions are not, however, unescapable. The emergence of the export-led growth model – with its twin brother, the debt-led one – answered the demand-generating problems created by years of wage share decreases and a steady retreat of the State from its traditional demand management role. Drastically inverting these tendencies would contribute to strongly narrowing the need for export-led strategies.

From a cultural to a distributive issue: Public climate action as a new field for comparative political economy

From a cultural to a distributive issue: Public climate action as a new field for comparative political economy

The political economy of electricity market coupling: Comparing experiences from Europe and the United States

Advancing the integration of neighbouring power markets is widely identified in the literature as a key enabler of power system efficiency, flexibility, and variable renewable energy integration. Nonetheless, the existing economic literature offers only partial explanations of why greater market integration is difficult to achieve in the real world despite its evident advantages in terms of overall welfare, supply security, and competitiveness. It is argued that power market coupling is an inherently political process involving significant institutional contestation and adaptation, and hence requires a more nuanced political analysis to be fully understood. This paper adds to the existing literature by conducting a comparative political economy analysis of electricity market coupling processes in Britain, Italy, and California, spanning from 2013 to 2021. It seeks to unpack how differences in the political economy contexts of these jurisdictions influenced the electricity market coupling process with their respective neighbouring systems. The analysis draws on 86 key policy documents, and 53 in-depth interviews with senior power system stakeholders in the three jurisdictions. Results widely align with claims in the political economy literature that market coupling outcomes do not simply reflect the most efficient solution. While all three jurisdictions have shown a commitment to enhance regional integration of short-term wholesale energy markets, there is considerable variation in policy outcomes, particularly the extent to which different segments of the market have been coupled. These differences can largely be attributed to variations in the political economy contexts of the three jurisdictions, including multi-level governance structures, diplomatic relations with neighbouring countries, and interactions with national political priorities and contexts. The main implications for the governance of electricity market coupling are discussed in the conclusion.

Authoritarian innovation in the United States: the role of dual subnational systems of labor governance

I apply Curato and Fossati's (2020) concept of “authoritarian innovation” to analyze historic changes in labor governance in the United States that have undermined democratic participation in the workplace and in the polity. Drawing from comparative political economy and welfare state theories, I argue that since the 1930s the U.S. has had not one unified, national labor regime but two competing, subnational regimes: the New Deal and its legacy in the industrialized North and West Coast, and a counter-regime based initially in the former Confederate Southern states. The more anti-union, anti-welfare, and anti-democratic Southern regime survived the Civil Rights era of the 1960s and 1970s, gained ascendance nationally with the rise of neoliberalism in the 1980s and 1990s, and expanded its boundaries in the 2010s into the deindustrialized Midwest. The “dual regime” analysis highlights critical transitions and divergent paths in the reshaping of American democracy.

Partial organization and economic coordination: The gradual re-organization of Finnish corporatism

Comparative political economy (CPE) scholarship has drawn various insights from organization theory throughout its existence. Organization theory has made more progress than CPE to explicate the organizational processes behind institutional change. In this paper, we draw on theory of partial organization to describe, interpret, and explain change in the coordination of one Coordinated Market Economy: Finland. We show that Finnish corporatism has become gradually re-organized during the last three decades. We argue that the structural and membership dynamics of partial organization explain some key patterns as well as the shape and timing of institutional change in the face of a changing constellation of economic interests. We argue that theory of partial organization complements the interest-based and institutional explanations of change in economic coordination.

Labour market inequality: a comparative political economy perspective

Abstract Large and rising earnings and employment inequalities in countries such as the USA and the UK pose fundamental questions for social scientists and challenges for policymakers. Mainstream economists have explained these outcomes mainly in terms of competitive market forces, particularly the mismatch between technology-driven demands for skills and those supplied by workers. In contrast, political economy perspectives focus on employer–employee bargaining power, driven by the monopsony power of firms and declining institutional and policy protections for workers. We critically assess the evidence on the education wage premium and employment polarization used to support the competitive market explanation for US wage inequality. We then show that the incidence of decent pay for young less-educated workers varies sharply across similarly rich countries and that new indices of institutional bargaining power closely correspond to differences in pay distributions but are uncorrelated with conventional measures of employment performance. We conclude that well-designed institutional and policy changes can substantially promote shared growth and the well-being of working families.

The politics of pro-outsider labour market reforms: a configurational study

AbstractOver the past decades, the level of regulation of fixed-term contracts has been in flux. Many reforms deregulating these contracts were followed by a regulatory countertrend, a puzzling finding considering influential theoretical expectations like the ones developed by the dualization and liberalization literatures. This paper draws on the comparative employment relations and comparative political economy literatures to identify the drivers of pro-outsider reforms. Furthermore, it develops an innovative argument claiming that governments may rely on support from a ‘domestic coalition’ including workers in permanent contracts, or they can leverage the European link to support their intention of conducting a pro-outsider reform. Each of these paths relies on the assemblage of distinct pro-reform coalitions of policy actors. To test our argument, the paper uses fsQCA. We compare 38 reforms enacted in 16 European countries between 1985–2019. After the fsQCA analysis, we conduct a qualitative discussion of the different paths.

Braverman and Labor and Monopoly Capital: A Retrospective

Abstract This paper appraises the work of Harry Braverman (1920–76), specifically his classic, Labor and Monopoly Capital, published in 1974 and remaining an influential reference for what has become the labour process approach to the study of work in capitalist societies. Labor and Monopoly Capital (LMC) reshaped what was then known as industrial sociology in the English-speaking world and was impactful across a range of disciplines, including history, organisation and management studies, comparative political economy, and labour geography. It is widely regarded as the foundational text of labour process theory (LPT). Fifty years after the initial publication of LMC, that theoretical approach is not only alive and well, but in the past decade, undergone something of a resurgence, influencing global communities of scholars. The paper takes a close look primarily at the text in its context, examining the genesis of the arguments, the distinctive biography of the author, and the structure of the book drawing out its major and minor themes, including a critical assessment of sources and evidence. We argue that the enormous impact of LMC can be explained by its successful challenge to existing orthodoxies about trajectories in work, technology, and management dominant in the social sciences and orthodox Marxism. This is followed up with a discussion of the reception, diffusion, and development of LMC comparatively and across different geographic domains and academic disciplines. As the debate on LMC eventually became a much broader programme of theory and research on the labour process, we consider some of the key points of differentiation from one of the foundational texts. Whilst acknowledging its enduring legacy, the final section argues that there is only a route forward from, rather than back to Braverman, given the profound changes to global capital and labour in the 50 years since LMC appeared.

The Weberian ideal type in political economy: obsolete match or fruitful encounter?

ABSTRACT This article highlights the analytical contribution of the Weberian ideal type to the field of political economy. Major strands of political economy have continued to integrate ideal type thinking to understand better the dynamics of national, regional and global economic systems. While there is an unbroken popularity of this methodological tool in the social sciences, we argue that it shows particular strengths and weaknesses in the interface between comparative and international political economy. To make this point, we first analyse the aims of the Weberian ideal type and investigate how it has been applied in the Varieties of Capitalism approach (VoC), dominant in much of comparative political economy (CPE). We then explore standard criticisms especially in the extension and reformulation of this approach to include the reasoning of international political economy (IPE). Main patterns of ideal type construction are identified to capture the CPE/IPE interaction and to point to some of the standard pitfalls when using the Weberian device. To maintain its strong position in the toolbox of political economy researchers need to take its heuristic purpose more seriously and be aware of its limitations.

The comparative political economy of sustainability transitions: Varying obstacles, accelerants and power in national capitalisms

Sustainability Transition Research (STR) has increasingly recognised the importance of capitalism and the capitalist state in constraining and accelerating the adoption of low-carbon innovations, but has engaged far less with the distinctive forms of national capitalisms. This article highlights the relevant insights of comparative political economy (CPE) that provide a fuller comprehension of the capitalist diversity shaping contemporary sustainability transitions. Specifically, it calls for greater attention to be awarded to the idiosyncratic supply and demand dynamics relating to national growth models, interest coalitions and institutional coordination, and historically-constituted political tendencies of governance. Through these insights, it is argued, the complexities of instigating industrial decarbonisation though the effective application of low-carbon technologies and the geographic asymmetries of transition can be better understood. The importance of these insights is outlined theoretically and demonstrated empirically through an examination of the varying strategic and institutional dynamics characterising sustainability transitions in the contemporary global economy.

The social and political bases of political economy: interpreting and periodising Italian developments since WWII

ABSTRACT We investigate the transition between Fordism and neoliberalism in Italy employing insights from International (IPE) and Comparative Political Economy (CPE). Transitions are key periods to observe how countries tend to converge towards similar political economy developments through processes of social, political and institutional adaptation. We contribute to the literature by detailing how transformations in the ‘social and political bases of political economy’ influence institutional change. We understand these transformations as movements from below (changes in sociodemographic and productive compositions, and social movements) and above (agency in political parties, trade unions, business associations and elites); we name these components ‘the social and productive composition’ and ‘the social and political representation sphere’ respectively. Employing process tracing, we identify three historical periods in post-WWII Italian political economy – state Fordism (1945–78), a transitional period we name ‘the long 1980s’ (1979–91), and neoliberalism (1992–) – delineated by two historical ruptures: a breakup moment in 1978–9 that signalled the decline of Fordism, and a critical juncture that ushered in neoliberalism in 1992. Analytically, changes within the social and productive composition during state Fordism impacted on the social and political representation sphere, and on several reforms undertaken in different institutional domains. However, since the breakup moment 1978–9 this dynamic changed together with the international political economy context. Similar to other western countries, the main actors within the social and political representation sphere increasingly approached institutional regulation inspired by neoliberal ideas, while the pressures coming from the more active forces within the social and productive composition faltered.

Between export-led growth and administrative Keynesianism: Italy’s two-tiered growth regime

ABSTRACT Comparative political economy scholarship struggles to categorise Italy’s model of capitalism between a mixed-market economy and a hybrid, stagnant economic system. To enhance our understanding of the Italian political economy, this article employs the analytical framework of growth regimes to study Italy’s regional economic systems. Our analysis indicates that Italy can hardly be defined as a ‘national growth regime’ due to the presence of two diametrically opposed regional growth regimes: Northern regions conform to a manufacturing-based, export-led growth regime supported by competitiveness-enhancing territorial institutions; southern regions conform to a particular variety of the consumption-led growth regime, that is, an administrative Keynesianism regime, which we theorise to typify a regime where growth and employment are systematically dependent on the state’s role of employer of last resort, the state’s consumption-enhancing social policies and economic forbearance of labour and corporate tax regulations. The article suggests that studying regional growth regimes is desirable when marked internal diversity in economic outcomes or productive structures exists across regions within (generally larger) countries, and when subnational governments have powers to develop major own institutions/policies in support of regional growth regimes.