Comparative Political Economy Research Articles

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.

Green New Deals in comparative perspective

AbstractIn February 2019, Representative Alexandria Ocasio‐Cortez and Senator Ed Markey introduced into the US Congress a non‐binding resolution for a Green New Deal, with the aim to catalyze policies and programs to rapidly decarbonize the US economy while achieving wider progressive economic, social and environmental goals. This motion sparked widespread interest, in and beyond the US, in the potential for more ambitious and solidaristic climate policy under the banner of a Green New Deal (GND). This Overview, after introducing the history of the GND concept and exploring its dimensions in theory, provides a snapshot of GNDs proposed (or adopted/enacted) by politicians, candidates for political office, political parties and governments around the world in the period 2019–2022. Drawing on theories of comparative politics and comparative political economy, the Overview illuminates key patterns in the prevalence and content of this set of GND proposals, as well as their ideological underpinnings and implicit “theories of change.” Specifically, it ventures that: GND policies are more commonly proposed in high‐income, industrialized democracies; variation in GNDs' prevalence and content are associated with varieties of capitalism and electoral institutions; GND policies are more commonly proposed by left‐of‐center parties and candidates; and GNDs are being proposed at all levels of government, but their content is shaped by constraints on government powers. On the basis of this analysis, the concluding section proposes a detailed research agenda on GNDs, with an emphasis on comparative research.This article is categorized under: The Carbon Economy and Climate Mitigation > Benefits of Mitigation Policy and Governance > National Climate Change Policy Policy and Governance > Multilevel and Transnational Climate Change Governance

A Turn to Export‐Led Growth? Rethinking the Growth Models in Greece and Portugal

AbstractThe global financial crisis in 2007 and, more recently, the Covid‐19 pandemic renewed interest in capitalist divergence and the evolution of growth models in the Eurozone. The varieties of capitalism (VoC) approach and more recently post‐Keynesian research, especially the growth model (GM) perspective, have made important contributions to comparative political economy. However, the focus on either the ‘supply‐side’ or ‘demand‐side’ aspects of modern models of capitalism has offered a limited framework to explain capitalist diversity in the global economy. This article brings insights from both the VoC and GM perspectives and provides a more comprehensive understanding of the evolution of the growth models in Greece and Portugal. The argument is that although both countries implemented internal devaluation and contractionary policies to curtail domestic demand and transform their economies into export‐led ones, they have been stuck in a suppressed demand‐led growth model since the global financial crisis.

In search of a growth model for Italy: the failed attempt of an export-led recovery strategy?

We analyse Italy’s growth pattern from 2001 to 2019 using the demand and growth regime categories proposed in the post-Keynesian tradition and recently adopted in the comparative political economy (CPE) literature. We argue that after the Global Financial and Economic Crisis (GFEC), Italy followed an export-led recovery strategy. In this respect, Germany’s growth model emerged as the successful model to follow. In the dominant view, Germany’s economic success since the mid-2000s was attributed to a series of painful but necessary economic reforms. The success of Germany’s export-led mercantilist regime became particularly attractive to Italy given the similar export-oriented manufacturing industry. However, Italy has followed the ‘wrong’ German model based on wage compression and restrictive budget policies while the ‘true’ German model is based on non-price competitiveness factors.

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.

How do countries shift their export specialization? The role of technological capabilities and industrial policy in Ireland, Spain and Sweden (1995–2018)

Abstract This article contributes to the Comparative Political Economy discourse on countries’ export specialization transitions. While current growth model literature often highlights producer coalitions’ influence, we present a complementary perspective emphasizing industrial policies. These policies, we argue, are not solely shaped by politics but are also deeply influenced by sectoral technological capabilities. By strategically engaging in both demand and supply-side sectoral innovation processes, industrial policies deepen existing technological capabilities with spillover effects into new sectors or foster new sector-specific capabilities. Our empirical analysis comprises two main steps. First, we create export profiles for eight European nations, using OECD TiVA data from 1995 to 2018. These profiles are categorized based on their technological and innovation content. Second, we identify significant shifts in export structures within Ireland, Sweden and Spain. Through thorough case studies, we illustrate the role of industrial policies in cultivating sector-specific technological capabilities.

‘정의로운 전환(Just Transition)’과 분배 갈등

The issue of climate change in political science has mainly been addressed at the international or global level, viewing environmental sustainability as a public good, and focusing on why intergovernmental cooperation to address climate change has often failed. However, it is necessary not only to analyze climate change at the global level but also to examine them at the domestic level, focusing on the conflicts of interest among various actors. With the widespread recognition that solving climate issues and transitioning to sustainable energy are inseparable, the recently emerged concept of 'Just Transition' is a suitable topic for approaching through frameworks developed in international political economy and comparative political economy. This paper explores how the issue of just transition intersects with important research in international political economy such as trade politics, as well as with social protection and welfare politics in comparative political economy. It argues that analyzing political conflicts surrounding just transition from a political-economic perspective is essential to establish effective governance for climate change mitigation.

Changing international hegemony and dependency in peripheral countries: A case study of Latin America

The literature on demand-driven growth models, while an important contribution to comparative political economy, places too much emphasis on developed countries and too little on the international political economic context. To extend these models to the periphery, where international influence is especially important, it is suggested that theories of hegemony and dependency be incorporated into the analysis. The main argument is that international relationships can limit the ability of peripheral countries to produce more sophisticated goods and attain high-income status. The nature of the limits varies with the needs of the hegemon (or rising hegemon), which are met via three dependency mechanisms: markets, leverage, and linkage. The proposed approach is illustrated by a study of Latin America from 1990 to 2020. After following a consumption-led model from the end of WWII until the debt crisis of the 1980s, a new export-led model was introduced in the 1990s, with different variants in the northern and southern parts of the hemisphere and different “winners” and “losers.” In the 1990s, US dominance favored Mexico through its incorporation into US industrial value chains, while China’s entrance into the region after 2000 privileged South America’s commodity producers. The trade and financial advantages afforded the two subregions by the respective powers were offset by negative aspects of the dependent relationships. Mexico’s sophisticated industries financed by US FDI benefited only certain enclaves in the country, while South America suffered reprimarization and deindustrialization through its new links with China.

Protecting gains: Extractivism, social movements, and the politics of policy implementation

Scholarship on social movements around conflicts over extractive development has advanced in identifying when movements are likely to impact policy adoption. Yet, in Latin America policies are rarely implemented – a reality that commonly leads conflicts to reignite. This introduction sheds light over this often overlooked issue. We focus on the politics of policy implementation – when and how social movements around extractive development have higher chances to favorably impact policy enforcement. To this end, we switch the attention from the strategies of social movements and their outcomes over policy implementation at the local level, to their cumulative impact on national-level policy. We argue for a comparative political economy approach that enables us to identify the systemic, intermediate, and short-term factors that impact the effect of movements on conflicts over policy implementation. Building on this approach, we propose three potential implementation outcomes – positive, status quo and rollback – depending on the degree to which they align with a movement's position. We conclude highlighting the contributions of the articles in this issue to the politics of policy implementation and providing some insights for social movements’ course of action to protect their gains.

The “EU‐Leash”: Growth Model Resilience and Change in the EU’s Eastern Periphery

Although the EU’s Eastern periphery has been afflicted by a series of crises over the past two decades, the region’s dependent market economies have shown puzzling resilience. Since the global financial crisis, the FDI-led, export-oriented growth models of the Visegrád countries have been reinforced. Meanwhile, the debt-based, consumption-oriented capitalism of the Baltic states has not experienced dramatic shifts either, despite a strengthening of its export component. Scholarly accounts from a comparative political economy perspective explain this resilience as the product of country-specific factors and tend to downplay the role of external influence. Instead, we aim to bridge these approaches with international political economy scholarship by arguing that European integration, in general, and the EU’s transnational regulatory influence, in particular, serves as an external anchoring mechanism for both semi-peripheral growth models. In addition to the region’s structural characteristics, such as deep embeddedness in global value chains, high exposure to trade with the EU, and dependence on external sources of finance, which already limit domestic agency in changing national growth models, we argue that European transnational regulatory integration involves an “EU-leash” that sets the boundaries for domestic economic policies, thereby influencing growth model trajectories. This ensures institutional continuity and prevents sudden and radical changes in semi-peripheral growth models. We demonstrate these mechanisms through two country studies (Estonia and Hungary).

). The competitiveness disparity between core and peripheral EU countries: an empirical analysis with panel ARDL approach

Purpose- This study empirically investigates whether there is an asymmetry between the competitiveness of the core and peripheral EU countries in the post-monetary union period, which includes the public debt crisis. Methodology- This paper analyzes the long and short-term effects of the interest rate for public bond yields and real effective exchange rate on public debt in core (Germany, Austria, Belgium, Denmark, and the Netherlands) and peripheral (Greece, Ireland, Italy, Portugal, and Spain) EU countries using the panel linear Autoregressive Distributive Lag model. In the study, second-generation unit root tests, Westerlund's (2007) cointegration test, and short and long-term MG, PMG, and DFE panel econometric methods are employed. Findings- According to the primary findings of the study: (i) while the interest rate for public bond yields is not effective on public debt in core EU countries, it has an increasing effect on public debt with a high positive coefficient in peripheral EU countries. (ii) The long-term coefficient of the real effective exchange rate in the peripheral EU countries is higher than in the core EU countries. According to this conclusion, the increase in the real effective exchange rate augments the public debt of the peripheral EU countries at a higher level than the core EU countries. Conclusion- Contrary to the monetarist approach that relies on the role of one last funder, these findings contribute to the literature by supporting the first two conditions of the Optimum Currency Area, the Varieties of Capitalism, Comparative Political Economy, and Fundamentalist approaches, which reveal the asymmetrical structure between the competitiveness of the core and peripheral EU countries. Keywords: EMU public debt crisis, core EU countries, peripheral EU countries, panel ARDL model, competitiveness differences JEL Codes: C45, F45, N14, N24

Regulating Platform Work in the UK and Italy: Politics, Law and Political Economy

The advent of the platform economy gives rise to an important challenge for existing systems of labour law across the world. Different countries are reacting to this common challenge with various legislative measures, ranging from accommodation to re-regulation. This paper analyses the policy response to the spread of platform work in the UK and Italy, countries with quite different labour law frameworks as well as contrasting political and regulatory institutions. These two countries have responded differently to the advent of the platform economy. Adopting an interdisciplinary approach, the paper draws on theories from political science and comparative political economy to explain the different regulatory outcomes observed. Specifically, it is argued that policy and legislative outcomes can be explained by the relative power of political actors and interest groups which are shaped, in turn, by the national system of political parties and the existing industrial relations frameworks. Platform or Gig Economy, Platform Work, Law and Political Economy, Power Resources

Post-Keynesian Financialised growth models as an alternative to Varieties of Capitalism: (in)stability, institutions and taxonomic method

This article evaluates the potential of the Post-Keynesian literature on growth models to gain influence over the Varieties of Capitalism approach within Comparative Political Economy. It shows that the future analytical strength of the latter approach depends, primarily, on the ability to consolidate macroeconomic principles consistent with a dynamic reality. On the other hand, Post-Keynesian macroeconomic foundations allow financialised growth models to capture the importance of power struggles in long-term growth as well as to integrate crises as recurrent and inherent phenomena to capitalist economies. That said, Post-Keynesian challenge to become a beacon within CPE lies on moving beyond country-based analyses towards the construction of a systematic association between, on the one hand, the institutional aspects shared between countries and, on the other hand, their classification on growth models.

Why the West’s alternative to China’s international infrastructure financing is failing

As geopolitical rivalry intensifies, Western states have moved to compete with China’s Belt and Road Initiative (BRI). However, the mobilisation of funds for global infrastructure remains paltry, suggesting that Western states cannot contest Chinese dominance here. Why? Through comparative political economy analysis of China and the United States, we argue that serious competition cannot be willed into being by state managers thinking geostrategically. States’ strengths and weaknesses are rooted in structural political economy dynamics. Where state managers’ plans jibe with, or express, the interests of powerful social forces and the capital and productive forces they command, a powerful impact results. This is true of China, whose BRI is principally a spatio-temporal fix for industrial overcapacity and over-accumulated capital. Conversely, where geopolitical ambitions are divorced from powerful groups’ interests and material realities, results are lacklustre. This applies to the United States, characterised by infrastructural decay, industrial hollowing-out and a dominant financial sector largely disinterested in infrastructure. Although US state managers are turning towards increased state spending on domestic infrastructure, internationally, the West’s continued neoliberal approach still relies on the already-failed approach of mobilising private capital into infrastructure investment.

Populist agenda-setting

ABSTRACT Populist agenda-setting is under-theorized, in part because of the fragmentation of scholarship on populism and agenda-setting. Policy studies has concentrated on the ideas, agents, and mechanisms of mainstream agenda-setting; comparative political economy, political sociology, comparative politics have centred on the sources of populism; and party politics, social movement, and political communication studies have focused on the characteristics of the populists themselves. This article builds on all such literatures to theorise the interactive effects of populism on agenda setting when populists are on the outside, in elective office, or in government. Using the four ‘Ms’ of populists’ ‘discursive construction of discontent’ – message, messenger, medium, and milieu – the article examines how populist messages shape the policy narrative; how populist messengers frame the debate; how they use the media to captivate ‘the people;’ and why, depending on milieu, populists are able to leverage ‘the people’s’ support to upend the mainstream and/or capture power.

Growth models and the comparative political economy of Europe

Growth models and the comparative political economy of Europe

The new political economy of public sector wage-setting in Europe: Introduction to the special issue

This special issue (SI) brings the industrial relations scholarship on the public sector into dialogue with the comparative political economy (CPE) literature on growth models/regimes. While the former has paid great attention to the public sector, in CPE the public sector has been analysed less, and mostly as subaltern to the export-sector’s actors, interests and institutions. We posit that the public sector matters for CPE in its own right for three reasons. First, the state remains today the single largest employer in virtually every European economy, providing incomes to a large segment of the middle class. Second, public employers’ wage bill – one of the largest items of governments’ current expenditures – is funded by the taxpayers. Hence, public sector wage policy is fiscal policy, ultimately pursued by public/political employers. Third, public employers are simultaneously public managers and political sovereigns acting in the shadow of hierarchy. Case-study contributions to the SI detail how these insights matter within different European growth regimes: (1) the Mediterranean demand-led growth regime (France, Italy, Spain and Portugal), (2) the German export-led growth regime, (3) the Nordic balanced growth regime (Denmark and Sweden) and (4) the FDI-led Eastern European growth regime (Czechia and Slovakia).

House price cycles, housing systems, and growth models

The paper provides a framework for theorising the role of house price cycles in national growth models. We synthesise Minskyan approaches with comparative political economy (CPE) by arguing that institutions influence the extent to which countries experience what we call ‘house-price-driven growth models’. First, we argue that house price dynamics have been undertheorised in existing growth models analysis. Finance-led models can be properly understood only against the background of rising house prices that stimulate consumption through wealth effects and investment through construction. Second, we identify behavioural and Minskyan theories of housing cycles as suitable frameworks to theorise the impact of housing on growth. However, this literature does not provide an analysis of cross-country differences in housing cycles. Third, drawing on the CPE literature on housing systems, we argue that factors such as private homeownership and mortgage-credit encouraging institutions can explain differences in the intensity of housing cycles. We provide preliminary empirical support for this framework from a cross-country analysis. Our results show strong cross-country heterogeneity in the intensity of housing cycles. Countries with more intense house price cycles also tend to exhibit more volatile business and debt cycles. Homeownership rates and mortgage-credit encouraging institutions are positively correlated with the volatility of house price cycles.

Nothing new under the sun: the so-called ‘growth model perspective’

Recent contributions in comparative political economy have made much of the ‘growth model perspective’, presenting it as a way to ‘rethink political economy’. This paper argues that the origins of the growth model approach can be found in contributions made by Michel Freyssenet in the framework of Gerpisa in the 1990s/2000. By presenting the contributions and limitations of Freyssenet’s approach, it is possible to establish how contemporary growth model approaches fail to establish a solid link between political economy and heterodox macroeconomics. It appears that an approach that starts from the differentiation of interests of social groups and considers the autonomy of politics has more potential to achieve this task, allowing to recover the inspiration of Kalecki’s 1943 article on the political limits to economic policy.