Comparative Political Economy Research Articles

National Governance Capacity from the View of Comparative Political Economy – Based on the Fight Against COVID-19

At the beginning of 2020, COVID-19 has blocked the pace of the world economic development. In the process of fighting the epidemic, different countries have formulated different policies and showed different effects from fighting it. After the end of COVID-19, the rapid social and economic recovery as well as their development require scientific and effective governance from all countries. From the perspective of comparative political economy theory, taking the COVID-19 epidemic as an example, this article points out the advantages and deficiencies of the national governance capacity, as well as seek ways to improve the national governance capacity.

Social inclusion and collective skill formation systems: policy and politics

This thematic review essay focuses on the relationship between social inclusion and collective skill formation systems. It briefly surveys foundational literature in comparative political economy and comparative social policy that documented and explained the traditionally socially inclusive nature of these systems. It reviews how the literature conceptualized the current challenges faced by collective skill formation systems in upholding their inclusive nature in the context of the transition to post-industrial societies. It then discusses in detail a recent strand of literature that investigates the policy responses that have been deployed across countries to deal with these challenges. It concludes by providing heuristics that may be useful for researchers who seek to advance the study of the policy and politics of social inclusion in collective skill formation systems.

Understanding political influences on Southeast Asia's development experience

PurposeThe per capita GDP of the countries of Southeast Asia (SEA) varies from less than $5,000 to over $97,000. This paper aims to analyze the political factors behind such variation, such as wars, extreme politics, political instability, and kleptocratic governments and leaders, and how they affect the development experience within the region.Design/methodology/approachThis paper uses the comparative political economy analysis approach to make a comparison among SEA countries using knowledge from well-known political–economic history and development data from World Development Indicators provided by World Bank.FindingsA long period of political stability creates a favorable environment for investment that, in return, stimulates sustained economic growth in SEA. The countries have all grown rapidly, but their experience of development varies. The four countries that avoided political extremes (Singapore, Malaysia, Thailand and Brunei) have the highest per capita incomes today. Those that have had long periods of war and political instability, but which have also had substantial periods of stability (Indonesia, Vietnam and the Philippines), come next. Cambodia and Laos have suffered long periods of war and are the least developed. Myanmar’s military rulers, through civil wars and kleptocratic mismanagement of the economy, have prevented growth much of the time.Originality/valueMost studies of Southeast Asian growth have analyzed the experience of single countries and missed the central role played by extreme politics, including wars, to explain why some countries have much higher per capita incomes than others. This paper is expected to fill this gap.

Insiders, Outsiders, Skills, and Preferences for Social Protection: Evidence From a Survey Experiment in Argentina

Standard theories in comparative political economy predict that labor market insiders oppose redistribution to poorer, often informal, labor market outsiders. In contrast, I argue that not all insiders oppose redistribution to outsiders. Extending recent work emphasizing the importance of economic insecurity for insiders, I argue that exposure to risk leads to greater polarization regarding preferences for non-contributory social policy between low- and high-skilled insiders. I test implications of this logic using a survey experiment from a nationally representative sample in Argentina and complement this with analysis of observational data for 16 Latin American countries. I find strong evidence of polarization regarding preferences over social protection among low- and high-skilled insiders. The experiment reveals that low (high)-skilled insiders primed about the risk of becoming outsiders become more supportive of transfers to outsiders (insiders). The article provides new micro-foundations for insider–outsider coalitions in support of social policy expansion in middle-income countries.

A Social Policy Theory of Everyday Borrowing: On the Role of Welfare States and Credit Regimes

AbstractDebt has become an essential part of many people's daily lives. This article develops a new comparative political economy perspective on the relationship between welfare states and household borrowing. I argue that the ways in which welfare states distribute benefits, and credit regimes provide access to credit, affect how individuals address social risks and, as a consequence, shape patterns of indebtedness. Permissive credit regimes substitute for social policies in limited welfare states, pushing economically disadvantaged groups into debt. Alternatively, credit markets complement social policies in the provision of financial liquidity in comprehensive welfare states, protecting vulnerable groups through government benefits while allowing less‐protected affluent groups to borrow money. In restrictive regimes, people instead rely on savings, expenditure cuts, and family support. I test these arguments using an original measure of credit regime permissiveness, cross‐national survey data, and full‐population administrative records from Denmark and panel data from the United States.

Crisis and Complementarities: A Comparative Political Economy of Economic Policies after COVID-19

We examine economic policy responses to the COVID-19 induced economic collapse in Germany (a coordinated market economy) and the UK (a liberal market economy). The two countries responded to the symmetric economic shock with very similar furlough and business credit schemes to stabilize the demand and supply sides of the economy. However, since these policies fed into very different political-economic structures in both countries, they produced very different results. We attribute this divergence to the effect of “institutional complementarities,” the notion in Varieties of Capitalism that different elements of a system are mutually articulated and, therefore, mutually reinforcing beyond their initial contribution, or vice versa. Our results serve as a cautionary tale to policymakers that introducing policy elements developed in other institutional contexts is complex and challenge us to consider systematically the way in which institutional frameworks actively shape policy outcomes.

Elephant limps, but jaguar stumbles: Unpacking the divergence of state capitalism in Brazil and India through theories of capitalist diversity

While growth in India stayed relatively stable over the last decade, Brazil fell into deep recession and a fundamental political and economic crisis. Why did these two countries, despite their similarities, diverge so massively within only 10 years? Through a paired comparison, this article probes two alternative approaches to capitalist diversity to explain the divergence among two rising economic powers and ‘state capitalisms’. It finds that through the lens of a firm-centred supply-side approach, one largely sees institutional stability in both economies, while a focus on the demand side and respective growth models makes visible fundamental destabilization in Brazil. The fragility of domestic demand, the vulnerability of global economic integration and the erosion of key social coalitions, we contend, are key to unpack the divergence between Brazil and India. This study thereby not only sheds a new light on emerging market capitalism but also discusses further possibilities for the analysis of state capitalism within comparative political economy.

Volte-Face on the Welfare State: Social Partners, Knowledge Economies, and the Expansion of Work-Family Policies

To what extent organized employers and trade unions support social policies is contested. This article examines the case of work-family policies (WFPs), which have surged to become a central part of the welfare state. In that expansion, the joint role of employers and unions has largely been disregarded in the comparative political economy literature. The article posits that the shift from Fordist to knowledge economies is the impetus for the social partners’ support for WFPs. If women make up an increasing share of high-skilled employees, employers start favoring WFPs to increase their labor supply. Similarly, unions favor WFPs if women constitute a significant part of their membership base. Yet the extent to which changes in preferences translate into policy depends on the presence of corporatist institutions. These claims are supported with statistical analyses of WFPs in eighteen advanced democracies across five decades and an in-depth case study of Norway. The article thus demonstrates that the trajectory of the new welfare state is decisively affected by the preferences and power of unions and employers.

How to study the populist radical right and the welfare state?

This review article and special issue introduction argues that studying the relationship between the populist radical right and the welfare state requires bridging literatures that have so far advanced with little mutual engagement: party politics and voting behaviour research on the one hand, and comparative political economy and welfare state research on the other. In this way, the article highlights the advantages of connecting different academic sub-fields in studying radical right politics. First, the literature of comparative political economy on the multi-dimensionality of welfare politics can contribute to a clearer understanding of both the welfare-related causes and consequences of radical right support. Second, the party politics literature on the radical right’s ideology provides theoretical tools to explain the welfare-related consequences of populist radical right parties. The article illustrates the advantages of bridging these literatures through the empirical contributions in this special issue and concludes with avenues of future research.

Post-Keynesian Macroeconomic Foundations for Comparative Political Economy

The global financial crisis and ensuing weak growth have increased interest in macroeconomic issues within comparative political economy (CPE). CPE, particularly the dominant Varieties of Capitalism approach, has based its analyses on mainstream economics, which limits analysis of the relation between distribution and growth and neglects the role finance plays in modern economies. It overstates the stability of the capitalist growth process and understates the potential effectiveness of government interventions. Baccaro and Pontusson have suggested a post-Keynesian (PK) theory of distribution and growth as an alternative. This article generalizes their point. PK theory highlights the instability of the growth process and lends itself to an analysis of income distribution and power relations. The article identifies the analysis of financialization and financial cycles, the understanding of neoliberal growth models, and the political economy of central banks as areas where PK economics provides specific insights for CPE. It also highlights that these arguments have important implications for government policy in an era of secular stagnation with ongoing social, distributional, and economic crises.

Skill-Biased Liberalization: Germany’s Transition to the Knowledge Economy

This article conceptualizes the evolution of the German political economy as the codevelopment of technological and institutional change. The notion of skill-biased liberalization is introduced to capture this process and contrasted with the two dominant theoretical frameworks employed in contemporary comparative political economy scholarship—dualization and liberalization. Integrating theories from labor economics, the article argues that the increasing centrality of high skills complementary in production to information and communications technology has weakened the traditional complementarity among specific skills, regulated industrial relations, and generous social protection in core sectors. The liberalization of industrial relations and social protection is shown in fact to be instrumental for high-end exporting firms to concentrate wages and benefits on increasingly important high-skilled workers. Strong evidence based on descriptive statistics, union and industry documents, and twenty-one elite interviews is found in support of the article’s alternative perspective.

State-industry relations and cybersecurity governance in Europe

Recent analyses of international affairs highlight that states are increasingly exploiting the key position of some private industries in critical hubs of global economic networks to gain an advantage over their competitors. The key role of private companies in international competition has also significant implications in the cyber-domain, where private actors are the main owners of data and digital infrastructures. In contrast to those who see a transformative effect of cyber, this article draws on comparative political economy and defense policy to identify two different models of state-industry relations in the governance of cybersecurity. The theoretical framework distinguishes between public and private governance ecosystems and identifies different hypotheses on how states and industries interact in cybersecurity governance in France and in the UK. The French public governance is characterized by the presence of formal and informal relations between state and industries, a high degree of public investment in the private sector and centralized institutions. France has also used the EU mainly to advance its industrial interests. In contrast, the UK private governance is characterized by more arm's length relations between the state and industries and a less centralized system. Moreover, the UK, differently to France, has not used the EU channel to advance its industry-related preferences. These results confirm the macro-differences between public and private governance ecosystems and open new relevant avenues to investigate the interplay between political economy structures and European and international pressures in policy-areas with both economic and security implications.

Inclusion for All or Exclusion for Everyone? UK Unemployment Policies in the Age of Austerity

Whilst the comparative political economy literature has regarded the UK as among the least dualised countries when it comes to non-standard employment, thanks to its flexible labour market and predominantly means-tested system of social pro-tection, scholars in the precariousness literature have highlighted the increased pre-carity and insecurity of many non-standard workers, highlighting the extreme con-ditionality and punitive policies typical of the UK welfare system as an important contributory factor. This paper aims to bridge the gap between these literatures. It analyses the experience of social protection of a specific category of non-standard workers, namely temporary agency workers, in accessing both active and passive unemployment policies. It finds how welfare reforms introduced in the past two decades in association with a general welfare discourse centred on the concepts of deservingness and dependency have created important barriers in accessing un-employment protection, not just based on institutional features but also on social perceptions.

Rusty guns and buttery soldiers: unemployment and the domestic origins of defense spending

AbstractScholars and practitioners continue to debate transatlantic burden sharing, which has implications for broader questions of collective action and international organizations. Little research, however, has analyzed domestic and institutional drivers of burden-sharing behavior; even less has disaggregated defense spending to measure burden sharing more precisely. This paper enhances understanding of the relationship between national political economies and burden shifting, operationalizing burden shifting as the extent to which a country limits or decreases defense expenditures, while at the same time favoring personnel over equipment modernization and readiness in the composition of defense budgets. Why do countries choose to allocate defense resources to personnel, rather than equipment modernization? I find that governments slightly decrease top-line defense spending in response to unemployment while shifting much more substantial amounts within defense budgets from equipment expenditures into personnel. This research highlights the intimate connection between Europe’s economic fortunes, transatlantic security, and burden sharing in North Atlantic Treaty Organization and the European Union – of particular interest as a pandemic buffets the transatlantic economy. It also points policy analysts toward factors more amenable to political decisions than the structural variables generally associated with burden sharing, bridging significant gaps between defense economics, security studies, and comparative political economy.

Not Merely Ideological: The Political Economy of Populism in Government

AbstractIn recent years the study of populism has followed a "pure" political track, typically employing an ideological perspective. We argue that such a perspective downplays material aspects of populism and limits the ability to analyze populism in government. In order to reinvigorate interest in and concern with the political economy of contemporary populism we rely on the emerging growth model approach in comparative political economy to study the political economy of populism in government. We situate populist socio‐economic policies, understood as those policies aiming at improving the material welfare and wellbeing of "the people", within a growth model analysis whose main insight is the association of economic growth with dynamics in the division of national income between labor and capital. Our empirical analysis of three successive governments of Israel led by the Likud populist party between 2009 and 2018 demonstrates the utility of this approach for the study of populism in government.

Growing differently? Financial cycles, austerity, and competitiveness in growth models since the Global Financial Crisis

The paper contributes to the recent growth models debate through a cross-country analysis of growth drivers before and after the 2008 Global Financial Crisis (GFC). It argues that the widely used dichotomy of export-led versus (debt-financed) consumption-led growth has lost its usefulness since the GFC. Specifically, identifying growth models through growth contributions can give misleading results when the drivers of economic growth change. The paper contends that Comparative Political Economy (CPE) has neglected the unstable nature of financial growth drivers, effectively ignores fiscal policy, and overemphasizes price competitiveness as a growth driver. It shows empirically that, first, debt-financed growth is cyclical and financial booms come with busts and debt overhang; second, post-GFC growth dynamics are strongly shaped by the fiscal policy reaction; third, price competitiveness through wage deflation has played a negligible role in driving growth. We conclude that CPE needs to broaden its analysis of growth drivers in order to understand how the GFC transformed growth models.

Multilevel business power in environmental politics: the avocado boom and water scarcity in Chile

ABSTRACT The production and export of avocados in Chile have experienced explosive growth since the 1990s, severely threatening local communities’ human right to water. Despite contentious activities and protest, there has been scant reaction from public authorities and policy continues to strongly support avocado exports. We explain this by analyzing the role that business plays in water politics and the different means it has to counter the search for political influence by aggrieved communities. We argue that the outcome is a product of the multilevel deployment of business power. Based on quantitative and qualitative data, we use process tracing methods to unveil business power mechanisms at the local, national and international levels and their connections. We contribute to the cross-fertilization of business power analyses in comparative political economy and environmental politics, and to the understanding of the under-researched multilevel dynamics of business power and the related politics of scale shift.

International transfer of vocational education and training: a literature review

ABSTRACT The transferability of vocational education and training (VET) systems is a central issue within international comparative VET research. However, scholars working in related disciplines also focus on the international cooperation associated with VET. This literature review presents relevant findings from the field of VET research, but also from the fields of comparative political economy, comparative educational research, and international human resource management. It explores differences and parallels in research about policy transfer between these fields. For example, scholars working in the comparative political economy and educational sciences tend to focus on transfer activities at the systemic level, while those working in international human resource management tend to focus on regional management strategies, and scholars working in VET research focuses on successes and obstacles associated with cooperation. All of these features are interconnected, providing important insights into the transferability of VET systems. The following discussion begins by exploring the rationales underpinning different disciplinary perspectives on policy transfer in VET. Next, it reviews empirical research on the transfer of VET policies from different disciplinary perspectives. It concludes with a critical reflection on the transfer potential – and how scholars in all relevant disciplines stress the need for cultural sensitivity, adaption, and long-term planning when transferring policy from one country to another.

The Comparative Political Economy of Growth Models: Explaining the Continuity of FDI-Led Growth in Ireland and Hungary

This article argues that the quiet politics of informal business-state interaction explains the political determinants of growth regimes. Building on the business power literature within the study of comparative capitalism, it shows that the noisy politics of elections often leads to changes of government but rarely to fundamental changes in the growth regime. Rather, growth models can be traced to the interactions and interests of dominant corporations within a country and its policymaking elites. The argument is developed through a comparative case study research design, using the case of foreign direct investment–led (FDI-led) growth in Ireland and Hungary. FDI-led growth regimes are a universe of cases that rely on state-led industrial and enterprise policies targeting the capital investment of foreign-owned multinational firms. Despite periods of noisy electoral politics challenging basic tenets of the FDI-led growth model in both Hungary and Ireland, the continuity of FDI-oriented growth is traced to the corporate politics of business-state elite deals.

What happened to the theory of African capitalism?

I examine the reasons for the impressively consistent disinterest in African economics that runs through all the schools of comparative political economy that Economy and Society has published over the last three decades. These theoretical movements can be helpfully arranged in reverse chronological order: Callon's economization, Soskice and Hall's varieties of capitalism (VoC), Boyer and Jessop's regulationism and Foucault's governmentality. Each of them shows an intriguing indifference to the question of whether African evidence matters for their arguments. What makes this interesting was that in its first decade, between 1971 and 1981, Economy and Society was obsessed with the problem of the comparative theorizing of the African economy and its transformation. Indeed, it is not too strong to say, as I show, that theorizing African capitalism was the journal’s raison d’etre. What happened to kill off that curiosity? Reconstructing debates within the journal, the paper explores the shifts, in comparative political economy and in African studies, between 1970 and 1990 that account for the collapse of comparative interest in the features of capitalism on the continent.