Comparative Political Economy Research Articles

Transnational skills development in post-industrial knowledge economies: the case of Luxembourg and the Greater Region

Luxembourg exhibits strong transnational traits within its skills regime, defying any neat fit with existing educational typologies. It is characterised by its high-skill economy, cross-cultural characteristics, and central location within the European Union. As such, Luxembourg has developed a hybrid strategy of responding to labour market challenges, and by that, to skills development. Our institutionalist analysis finds that Luxembourg is involved in transnational skills development in three complementary ways: (a) employers in Luxembourg extensively recruit skilled workers at the European and global levels, but also (b) heavily rely on the distinct skills sets of cross-border commuters from the neighbouring regions of Belgium, France, and Germany (the Greater Region). Furthermore, (c) Luxembourg combines institutional elements of these neighbouring countries – representing distinct models of capitalism and welfare – within its own education system. In combining the specific strengths of different national skills regimes, institutional bricolage represents a core feature of Luxembourg’s highly stratified system of skill formation. Our analytical framework refers to two major comparative political economy perspectives, namely the welfare state and varieties of capitalism approaches, to analyse how Luxembourg has responded to deindustrialisation by creating a domestic transnational labour market.

Restarting convergence to reinvigorate output legitimacy: is the EMU Waiting for Godot, again?

ABSTRACTRelying on the insights of the Comparative Political Economy (CPE) literature and, mostly, from the structural institutional features implied by Varieties of Capitalism, this article challenges the idea of restarting convergence to have a smoothly functioning Eurozone. In literature, Europeanization and convergence have commonly been conceived as strictly related concepts. This conception persists once the institutional way forward from the crisis – epitomized by the Five Presidents’ Report – is also considered. A close investigation of the interrelation among Europeanization, convergence and output legitimacy reveals that the emphasis on convergence overshadowed the resilience of the domestic political economies structures. A support indicator for EC/EU membership, based on Eurobarometer data, is therefore built to display the functioning of this relationship. Eventually, the institutional heterogeneity characterizing the domestic political economies is individuated to be an important determinant of the cross-country paths of divergence that became visible even before the eruption of the Euro-crisis.

Negotiating transparency: NGOs and contentious politics of the Extractive Industries Transparency Initiative in Ghana

ABSTRACTTransparency has been upheld by the dominant Zeitgeist of the twenty-first century as an all-purpose recipe for addressing the ills associated with resource-led developmental transformation. However, little attention has been paid to the bargains and contestations accompanying its institutionalisation in resource-rich countries. To gain a fuller understanding of how transparency interventions interact with the deeper vectors of power and politics embedded in resource governance, this article examines the dynamics of NGO participation in the Extractive Industries Transparency Initiative (EITI), an international auditing and multi-stakeholder oversight initiative, adopted by Ghana in 2003. By recasting the analytic problem around the optic of NGO contestation and representation, the article offers a more nuanced engagement with the material politics of negotiability, contestation, and representation that drive EITI compliance, non-compliance, and de-compliance. Drawing from an overall comparative political economy approach and a heuristic model highlighting the intricate dynamics of transparency, the overriding argument ranks the understated contestations within the NGO community around the EITI and the disparity between its platforms and the representational processes of democratic accountability among the most formidable threats to the EITI's noble ambition of securing optimum resource-led transformation.

Permanent budget surpluses as a fiscal regime

AbstractThis article challenges the focus on budget deficits that permeates the literature on the comparative political economy of fiscal policy. It analyzes countries running budget surpluses and asks why some preserved these surpluses while others did not. Whereas several OECD members recorded surpluses for just a few years, balanced budgets became the norm in Australia, Canada, Denmark, Finland, New Zealand and Sweden in the late 1990s. The article compares both types of countries. Focusing on Canada and Sweden, it argues that a path-dependent shift in the balance of power among competing fiscal policy coalitions explains why surpluses persisted in one group of countries but not in the other. This reconfiguration of fiscal conflict was triggered by a deep fiscal crisis and an ensuing expenditure-led consolidation. It can be interpreted as creating a ‘surplus regime,’ in which fiscal policy became structured around the goals of balancing the budget and cutting taxes.

Competing With the Dragon: Employment Effects of Chinese Trade Competition in 17 Sectors Across 18 OECD Countries

China’s rapid rise on the global economic stage has substantial and unequal employment effects in advanced industrialized democracies given China’s large volume of low-wage labor. Thus far, these effects have not been analyzed in the comparative political economy literature. Building on pooled time-series data, we analyze the effects of Chinese trade competition across 17 sectors in 18 countries. We devote attention to a new channel, increased competition from China in foreign export markets. Our empirical findings reveal overall employment declines in sectors more exposed to Chinese imports. Furthermore, our results suggest that employment effects are not equally shared across skill levels, as the share of hours worked worsens for low-skilled workers.

The imbalance of capitalisms in the Eurozone: Can the north and south of Europe converge?

The European response to the sovereign debt crisis has exposed a tension between the national and the supranational in a multilevel polity while opening up new political cleavages between the north and south of the Economic and Monetary Union (EMU). This dilemma has become particularly acute for programme countries that were either directly or indirectly in receipt of non-market financial fundingfrom the troika. Drawing upon a new international political economy approach to comparative political economy, this article argues that joining together two distinct macroeconomic growth regimes is the real source of the euro crisis: domestic demand-led models, which predominate in southern Europe, and export-led models, which dominate the landscape of northern Europe. European policymakers assume that all member states can converge on an export-led model of growth. This vision of convergence is exacerbating rather than resolving the imbalance of capitalisms at the heart of the Eurozone.

Theories of policy change and variation reconsidered: a prospectus for the political economy of public policy

Studies of decision-making in public policy may be conceived as three distinct ages of theory building and testing. The first was the classic period of studies of decision-making and rationality; the second was the age of synthesis when theories of decision-making were blended into accounts of agenda setting. The third—which is starting to take shape—is the age of the political economy of public policy, drawing on models and methods that have been applied to the study of international relations and comparative politics, which are increasingly addressing issues in public policy. The paper’s argument offers a challenge to public policy scholars to use theory and approaches from political economy and to integrate them with classic and synthetic approaches. Insights from public policy approaches from the first two ages could also inform the political economy of public policy. The paper contains a review of the development of public policy theory in the 1990s; it provides an account of the recent period as one of relative stability; it then presents work in comparative political economy as examples of research on public policy.

Divergence via Europeanisation: rethinking the origins of the Portuguese debt crisis

ABSTRACTA founding myth of the euro was that profound economic convergence could be achieved across the core and periphery of Europe. Scholarship from within Comparative Political Economy (CPE) has compellingly pointed to this myth of convergence as the fundamental mistake of the euro project (Regan, “Imbalance of Capitalisms”). Economic and Monetary Union was applied across a range of incompatible varieties of capitalism with little appreciation for how difficult it would be for peripheral economies to overcome long-standing institutional stickiness. Yet, while institutional stickiness tells us much about the causes of declining competitiveness, it tells us much less about the origins of brand new patterns of debt-led growth. This article modifies this CPE account by drawing attention to the much overlooked case of Portugal. In contrast to CPE’s emphasis on institutional stickiness, this paper explores the ways in which negotiation of European integration has been generative of institutional transformation leading to debt-led growth in Portugal. By combining Europeanisation with CPE, this article shows that, far from an inability to do so, in the case of Portugal, it has been the attempt to ‘follow the rules’ of European Integration that explains its damaging patterns of debt-led growth.

What Makes Firms Competitive? States, Markets, and Organisational Embeddedness in Competitive Firm Restructuring in Postsocialist Economies

ABSTRACTThe prevailing transitions literature suggests that dynamic firms in postsocialist economies are the result of macroinstitutional reforms leading to the making of markets. This article builds on work in comparative political economy and economic sociology to show that the degree of competitive behaviour of postsocialist firms is determined not by the existence of general market institutions alone but by the kinds of organisational allies firms possess and the kinds of markets they compete in. Using firm survey data across 28 postsocialist economies, the article examines the determinants of competitive restructuring by firms, including product innovation, standards upgrade, financial transparency, and investments in research and development. The article confirms insights from comparative political economy which suggest that dynamic enterprise sectors emerge when governance is effective. However, at the firm level, the article finds that transnational ties and supportive policy environments are most significant in the making of dynamic postsocialist enterprises. The article also highlights important regional variation in firm behaviour and discusses the relationship between institutional frameworks, organisational embeddedness, and firm restructuring in postsocialist economies.

Introduction: Is the European Union Capable of Integrating Diverse Models of Capitalism?

ABSTRACTThe causes and consequences of the Euro crisis have led comparative political economy scholars to question whether European integration can accommodate diverse models of capitalism. This special issue addresses two important questions about the compatibility of diverse growth models within the European Union (EU): Are some growth regimes better suited to European integration than others? and does the EU favour a particular constellation of domestic institutions? Contributions within this special issue provide a qualified yes to these questions, concluding that the EU favours export-led growth models whilst it penalises and discourages domestic consumption-oriented growth paths, particularly those that are financed by debt accumulation. While recent comparative capitalism literature highlights that European monetary integration has favoured export-led growth regimes, contributions in this special issue outline that the EU’s prioritisation of export-led growth over domestic demand-led growth is present in other facets of integration, including EU accession, financial integration, the free movement of people, fiscal governance and the Europe 2020 growth strategy. Findings here provide important insights for both the European integration and comparative capitalism literature, highlighting that the unique economic ties being forged within the European project may be problematic for those countries outside northwestern Europe and for workers in low-wage domestic sectors.

Collective action and globalization: Building and mobilizing labour power

Growing transnational economic competition has severely tested workers’ organizational vehicles for voice, from unions to social democratic parties. Workers have responded by experimenting with new strategies for collective action. Social scientists are currently grappling with how best to gain traction in analysing these changes. This review essay probes opportunities for industrial relations scholars – who are at the forefront in the study of labour – to better understand innovation in workers’ collective action and track organized labour’s evolving influence on the governance of work. It argues that industrial relations research could learn from two neighbouring scholarly communities: global labour studies and historical institutionalist research on comparative political economy. Research in these two fields, the article contends, offers models for distinguishing between the respective roles of ideas, interests and institutions in workers’ attempts to build and mobilize labour power. Structuring research on innovation in collective action around these conceptual focal points could facilitate the accumulation of knowledge about organized labour’s ongoing global reorientation.

A comparative political economy of regional migration and labour mobility in West and Southern Africa

ABSTRACTBased on a collaboration with the late Lionel Cliffe, this article suggests agendas and methods for analysing regional patterns of migration and labour mobility in Southern and West Africa. It locates local communities in regional patterns and global processes using two key organising concepts: first, the regionalisation of Africa, as outlined in Samir Amin’s work. The authors consider continuities and discontinuities with the paradigms of ‘Africa of the labour reserves’ and ‘Africa of the colonial trade economy’ to understand contemporary realities. Second, this article explores the mechanisms and characteristics of cheap labour on different scales of analysis. This includes a discussion of the theories that explored the relations of reproduction of labour, and the reproduction of the labour system as a whole. In doing so, it rethinks the modes of production discourse to highlight the continuing importance of situations where capitalism exists alongside non-capitalist relations of production and reproduction.

The internationalization of commercial real estate markets in France and Germany

This paper investigates the internationalization of the commercial real estate markets of France and Germany, markets typically ignored in comparative political economy. Although both markets are embedded in Continental European capitalism, their trajectories of internationalization are variegated. After exploring how processes of internationalization are processed within each country, we show how these processes have played out in the commercial real estate markets of France and Germany. The French state played a key role in guiding processes of internationalization: the introduction of new tax regimes allowed French property companies to raise capital at the stock exchange. The case of Germany demonstrates the continued importance of the banking sector for real estate investment markets. Although the typical characteristics of the French and German political economies are strengthened in this process, agents also feel the need to respond to the interests of international investors by creating Real Estate Investment Trust-like systems to absorb domestic and foreign capital.

No Flexicurity without trade unions: The Danish experience

The literature of comparative political economy considers the Danish “Flexicurity” model the egalitarian variety of contemporary capitalism. This article, however, contests this common assessment by tracing the gradual policy changes that led to an erosion of its security-related components. Comparing the rise and erosion of the Danish “Flexicurity” model, it argues that the explanation for this reform trajectory lies in the exclusion of the labour movement from the policy-making process. Danish minority governments gained little by involving unions, because they were no longer reliant on an extra-parliamentary channel of consensus mobilisation. Flexible majority-building in the parliamentary arena allowed them to seek their preferred policy output independent from union consent. The onset of the Great Recession therefore allowed governments of the right as well as the left to dismiss the one single actor that mobilised political support for workers at risk of unemployment. Without the involvement of organised labour, the concept of “Flexicurity” cannot live up to its promise of mitigating economic uncertainty on a volatile labour market.

Global Finance, Labor Politics, and the Political Economy of Housing Prices

International political economy identifies declining nominal interest rates, securitization, and financial liberalization as drivers of rising housing prices. Despite witnessing these common credit shocks, however, developed economies experienced divergent trends in housing inflation since the 1980s. We offer a comparative political economy explanation of variation in house prices, arguing that by restraining household incomes, wage-setting institutions can blunt financial liberalization’s inflationary impact on housing markets. Employing quantitative analysis and a comparative study of Ireland and the Netherlands, we uncover two findings. First, countries where political coalitions in the export sector held veto powers over those in the nontraded sector in national wage setting realized lower housing inflation. Second, the impact of sectoral coalitions on housing prices in OECD countries is similar to that of financial variables. Our results suggest that the organization of labor politics continues to play an important role in mitigating the destabilizing effects of global finance on developed economies.

Varieties of Discharge: Political Economies of Consumer Bankruptcy Law

The first ambition of this paper is to sketch a normative frame (a 'grammar') for consumer bankruptcy reasons. Following the methodology of a comparative structural discourse analysis it suggests a pluralistic value matrix integrating divers bankruptcy theories. The systemic order of this grammar allows integrating plural bankruptcy rationalities and at the same time may guide, yet not determine legislative and judicial decision-making. The structural typology offers a unified yet plural map of bankruptcy reasoning. Based on the developed frame of a political grammar of bankruptcy theory this paper suggest a four model typology of political economies of consumer bankruptcy law. The most common comparative political economy narrative of bankruptcy law is that of a fixed attribution of types of normative bankruptcy models to countries. The central hypothesis of this paper is that all political economic value positions reappear in every doctrinal question on the interpretation of bankruptcy laws. Not only does a variety of scholars bring up different political perspectives for interpretation. Also the legislative coding itself entails different underlying value decisions. The main part of the paper will run over the US bankruptcy code and the German insolvency code ('Insolvenzordnung') to highlight some selected regulative elements in that respect. The main overall result of this comparative discourse analysis both of bankruptcy theories and legislative normative underpinnings is the fact of value pluralism in bankruptcy laws. This variability of political value commitments is reflected within many deep transformations of bankruptcy regimes in the legal evolution of most national jurisdictions. The evolution of bankruptcy laws proves by its alternation of ideological changes the deep political dimension of bankruptcy regulation.

Peeping at the corpus – What is really going on behind the equality and welfare items of the Manifesto project?

The Comparative Manifestos Project (CMP) data set quantifies how much parties emphasize certain topics and positions and is very popular in the study of political parties. The data set is also increasingly applied in comparative political economy and welfare state studies that use the welfare-specific items rather than the CMP’s left–right scale to test hypotheses on the impact of political parties on social policies, (in)equality and the welfare state. But do these items provide a valid basis for descriptive and causal inferences? What do the items precisely capture? To answer these questions on concept validity, we use the new manifesto corpus data for German parties 2002–2013 and, to provide a further test, for US parties 2004–2012. Corpus data are the digitalized, originally hand-annotated and coded texts of electoral programmes. We assess the validity of the codings directly at the level of quasi-sentences by re-categorizing and subcategorizing the originally coded statements on equality, social justice and welfare state expansion. Although concept validity concerns about the data seem exaggerated, we find that theoretically relevant and meaningful variation is ‘hidden’ behind the original categories. Hence, our approach allows researchers to assess the substantive meaning of the CMP data directly, and we offer an efficient new strategy for testing more specific hypotheses on the impact of political parties on policy.

Poor Numbers: Statistical Chains and the Political Economy of Numbers

Morten Jerven'sPoor Numberssheds light on the acute fragility of African statistics, itself linked to the precarious conditions in which aggregates are produced. As patchy and problematic as they are, these numbers are nevertheless ubiquitous as instruments of proof and tools of government. Quantified fictions take shape in complex statistical chains that stretch from their producers to the economists who use them, and are mediated by international organizations. Focusing on the criterion of accuracy,Poor Numberspowerfully conveys its message of “garbage in, garbage out,” but leaves important questions related to the relevance of statistics unanswered. The history, sociology, and political economy of numbers sketched by Jerven merit closer consideration with a view to the following: identifying the connections between evolving state forms and the development of statistics; establishing a historical ethnography of the organizations that produce and use numbers; understanding the growing role of multinationals in the political economy of statistics; taking a less conciliatory view of the involvement of international organizations; and, last but not least, denaturalizing the dominant economic categories by integrating the plurality of economic approaches to statistics. The article concludes with a call for a comparative political economy of numbers that would no longer consider the African case in isolation, and would work against the idea that Africa has not entered statistical history, or has only done so “by mistake.”

BRICS: An Anti-Capitalist Critique, by Patrick Bond and Ana Garcia, eds.

Reviewed by : Giselle Thompson, York UniversityThere is no irony fact that BRICS: An Anti-Capitalist Critique is largely written by a cadre of interdisciplinary scholars who are associated with academic institutions Global South. This observation evokes sentiments of Antiguan-American author Jamaica Kincaid, who posits that the bureaucracy and the Gross National Product are inventions of Rostowian Western modernity that were forcefully imposed on Rest.[1] In this compilation of essays, editors Patrick Bond and Ana Garcia, along with notable authors Leo Panitch, Canada Research Chair Comparative Political Economy, and Immanuel Wallerstein, progenitor of world-systems analysis, present a critical response to emerging regional bloc known as (Brazil, Russia, India, China, and most recently, South Africa).In introduction, Garcia and Bond suggest that demanding a seat at international table, nations engage antagonistic cooperation, which means in practice, that [in] areas ranging from world finance to climate change to super-exploitative relations with periphery and even to soccer, bloc aims not to overturn tables at proverbial temple, but to collaborate holding them up (1) - despite China's and Russia's occasional inter-imperial stances against West. According to editors, project is not antithetical to existing state of affairs West with regard to economic stabilization, generating capacity of a lender of last resort, and steadying multilateral governance, especially with its ongoing demand for US dollar.Garcia and Bond's central problematic, which sets thematic tone for succeeding chapters, is BRICS' extractive, high-carbon economic (3). They argue that this model positions bloc for mimicry of Western social, political, and economic failings, thereby threatening to amplify destructive qualities of advanced capitalism our time.In his chapter BRICS, G20 and American Empire, Panitch calls for a more sober assessment (65) of brochure presentation of regional bloc as reflection of a fundamental change global economic and political power[2] and promoter of cooperation and solidarity with peoples... achievement of sustainable development, and eradication of poverty,[3] sentiments of former chief economist of World Bank, Joseph Stiglitz, and of former Cuban leader Fidel Castro, respectively. Panitch is concerned with counter narrative: readiness of World Bank to welcome New Development Bank because of its resource depleting and export-oriented (65) strategies that are consistent with its own.Admittedly, aforementioned are prodigious and inflammatory indictments, but are nonetheless necessary for scholars and students to consider - which is why BRICS: An Anti-Capitalist Critique occupies a unique space expanding literature about bloc.Reviving Ruy Marini's (1965) application of sub-imperialism to Brazilian dictatorships, BRICS and sub-imperial location Bond suggests that appear to be sub-imperialist since they maintain global neoliberal policies and practices that benefit imperial powers as well as themselves. In other words, much like Wallerstein's semi-periphery, sub-imperialist power helps to broaden West's accumulation of capital by brokering extraction and exploitation of resources. …

The Comparative Politics of Transnational Climate Governance

ABSTRACTWe live in an era of remarkable transformations in how governance is supplied at the global level, as traditional means of intergovernmental institutions are being joined by a growing diversity of transnational arrangements. Yet, at present, we still have only a superficial understanding of what causes actors to adhere to transnational rules, norms, and initiatives once they appear, and especially what role domestic political, economic and social variables play in their decision making. Focusing on climate change as an issue exemplifying the tendency for complex governance interplay, this special issue provides a comparative political economy perspective on the increasing but uneven uptake of transnational climate governance (TCG). This article articulates a conceptual framework for the analysis, highlighting the interplay between transnational and domestic politics and how such interactions shape the incentives, opportunities, and modalities of participation in transnational initiatives. An original data set of participation in transnational governance initiatives is introduced to capture the significance of the phenomenon and to provide a common basis to systematically address, for the first time, questions about the cross-national patterns of involvement we find across different arenas and types of TCG, be they networks of sub- or nonstate actors, private rules, or hybrid arrangements.