POSC 261: Comparative Political Economy Fall

Transcription

1 Duane H. Swank, Office: 450 Wehr Physics Office Hours: MF 11-12; W 11-3 Phone: ext ; duane.swank@marquette.edu Introduction: The purpose of this course is to provide a survey of the field of comparative political economy and an opportunity for in-depth study of the political economy of democratic capitalism. The field of political economy is often delineated in two ways. First, political economy can be defined simply as the study of the interrelationships between politics and economics. Thus, the field of comparative political economy consists of the comparative study of interrelationships between politics and economics within nations; it consequently encompasses a significant portion of the field of comparative politics and shares some focal concerns with international political economy (the study of interrelationships among politics and economies in interactions between countries and at the supra-national level.) Given the potentially extensive and strong domestic impacts of regionalization and globalization of economic activity and the general importance of international influences on domestic politics, we will give some attention to the shared interests of comparative and international political economy. Second, political economy is sometimes defined as an approach to the study of politics where theories and models of economic phenomena are applied to politics. This approach is often labeled public choice or rational choice. We will use the former definition of political economy to provide the boundaries for the course, although rational/public choice theory will be one of the approaches we draw upon to study the interrelations between politics and economies within and across democratic capitalist systems. Generally, we will place some emphasis on the assessment of the strengths and weaknesses of multiple competing theoretical perspectives on the political economy of democratic capitalism for instance ideational, statist-institutional, and class power-centered theories as well as rational choice theories. To simplify our tasks, we will focus on several broad themes concerning the relationships between politics and economics generally, and democracy and capitalism specifically. First, we will address the nature of markets and governments their strengths and weaknesses as alternative mechanisms for achieving allocative efficiency, socioeconomic equality and political stability and examine the actual mix of markets and governments that has developed in democratic capitalist systems in from the late 19 th to early 21 st century. Second, we will focus on how domestic economic development as well as the structure and dynamics of contemporary capitalism influence the development and practice of democracy. In this portion of the course, we will also assess how globalization, or the internationalization of markets, influences politics and policy in democratic polities. Next, we will reverse the causal arrow and examine how democratic politics shapes economic performance and policy in capitalist economies. Does democracy support or hinder economic growth? How do particular democratic institutions and political processes influence economic policies and performance? Are there multiple varieties of democratic capitalism

2 consistent with a mix of strong economic performance and relatively high economic and social equality across racial/ethnic, class, and gender strata? Course Requirements and Grading: Seminar participants are expected to attend each seminar meeting and to be prepared to discuss the material assigned for that session. Informed class participation will constitute 10 % of the final grade. Participants are also required to select two of the course's topics/weeks for specialized study. (The first two full sessions Week 1 Introduction and Week 2 "Markets and States" and Week 8 paper prospectus presentations are excluded.) For those topics chosen, students will prepare a critical review essay on required readings as well as recommended readings denoted by an asterisk. In addition to the essays, students are also expected to provide a formal in-class presentation (review and critique) of one of the asterisked recommended readings. The two critical review assignments are each worth 20 % of the final grade. The final class assignment is to complete a seminar-quality paper on any topic in the field of comparative political economy. A prospectus of this paper, including a preliminary bibliography, is due by October 18. On the 18 th, each seminar participant will present their prospectus to the seminar. The paper is due December 11 and is worth 50 % of the final grade. In sum: Readings: Seminar Participation 10% Critical Review Essays 40 % (20% each) Seminar Paper 50% For each topic, readings are grouped into three sections -- required, recommended, and suggested. Seminar participants should complete all required readings by class and, ideally, the recommended readings as well. Suggested readings offer future opportunities for exploration of a topic and typically include a few key classic works, recent seminal articles or books, and/or particular useful survey articles with extensive bibliography. All recommended readings are available either through electronic issues of journals (accessed by MARQCAT), electronic reserve (for unpublished papers), or at Library Reserve in Raynor Library. Required Books (all at the Bookmarq) Alberto Alesina and Nouriel Rubini with Gerald Cohen. Political Cycles and the Macroeconomy. Cambridge, MA: The MIT Press, Mark Blyth. Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century. New York: Cambridge University Press, Alexander Hicks, Social Democracy and Welfare Capitalism. Ithaca: Cornell University Press, 1999.

3 Jonas Pontusson. The Limits of Social Democracy: Investment Politics in Sweden. Ithaca: Cornell University Press, Jonas Pontusson, Inequality and Prosperity: Social Europe vs Liberal America. Ithaca: Cornell University Press, Mancur Olson. The Rise and Decline of Nations. Yale University Press, Dietrich Rueschemeyer, Evelyne Huber Stephens, and John Stephens. Capitalist Development and Democracy. Chicago: The University of Chicago Press, Duane Swank, Global Capital, Political Institutions, and Policy Change in Developed Welfare States. New York/Cambridge, UK: Cambridge University Press, Charles Wolf. Markets or Governments: Choosing Between Imperfect Alternatives 2 nd Ed.. Cambridge, MA: MIT Press, Recommended (We will read a subset of chapters from one-third to half of these books which are available at Bookmarq.) Peter Hall and David Soskice. Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. New York: Oxford University Press Michael Lewis-Beck. Economics and Elections. Ann Arbor: U. Michigan Press, Suggested: (Sections of these book will be used periodically as recommended/suggested reading.) Dennis Mueller, Public Choice III. New York: Cambridge University Press, Adam Przeworski et al Democracy and Development (NY: Cambridge U. Press, 2000). Carles Boix, Democracy and Redistribution New York: Cambridge U. Press, Schedule: Overview Part I. Introduction to Comparative Political Economy Week 1 (August 30). Introductory Session Week 2 (Sept 6). How Much Market and How Much State in Democratic Capitalism Part II: How Capitalism Shapes Democracy Week 3 (Sept 13). Does Economic Development Cause Democracy? Week 4 (Sept 20). Economic Development or Political Power in the Development of the Democratic Welfare State?

4 Week 5 (Sept 27). The Structural Power of Capital, I: A Privileged Position for Business? Week 6 (Oct 4). The Structural Power of Capital, II: Globalization and the Demise of the Keynesian Welfare State? Week 7 (Oct 11). Economic Performance and Political Behavior: Do Economics Determine Elections and Government Popularity? Week 8 (Oct 18). Paper Prospectus Due/Presentations Part III: How Democracy Shapes Capitalism Week 9 (Oct 25). Ideas, Politics, and Institutional Change in 20 th Century Capitalism Week 10 (Nov 1). The Impact of Democracy on the Economic Growth, I: Does Democracy Subvert or Foster Economic Growth? Week 11 (Nov 8). The Impact of Democracy on the Economic Policy: Are There Political Business Cycles? Week 12 (Nov 15). The Impact of Democracy on the Economic Growth, II: Do Some Democratic Political Institutions Notably Harm or Foster Economic Growth? Week 13 (Nov 22): Thanksgiving Holiday Week 14 (Nov 29). Varieties of Capitalism: Can More than One Version of Democratic Capitalism Succeed? Week 15 (Dec 6). Varieties of Welfare Capitalism: Problems of Sustaining Affluence and Achieving Economic and Social Equity in the 21 st Century. Detailed Schedule and Reading Assignments: Part I. Introduction to Modern Political Economy Week 1 (August 30). Introductory Session: Introduction to Comparative Political Economy For introductions to the central questions the field, see these well respected surveys: James E. Alt, Comparative Political Economy: Credibility, Accountability, and Institutions. In Political Science: State of the Discipline, eds., Ira Katznelson and Helen Milner. New York: W.W. Norton, Jeffry Frieden and Lisa Martin, International Political Economy: Global and Domestic Interactions. In Political Science: State of the Discipline, eds., Ira Katznelson and Helen Milner. New York: W.W. Norton, William Keech, Robert Bates, and Peter Lange. Political Economy Within Nations. In William Crotty, ed., Political Science: Looking to the Future. Volume II. Evanston: Northwestern University Press, 1991.

5 For more introduction to substantive questions and theoretical approaches, see the introductory chapters (and beyond) in: James Caporaso. Theories of Political Economy. New York: Cambridge U. Press, Colin Crouch and Wolfgang Streek. The Political Economy of Modern Capitalism. London: Sage, Dennis Mueller, Public Choice III. New York: Cambridge University Press, Adam Prezworski. State and Market: A Primer in Political Economy. New York: Cambridge University Press, 2003 Week 2 (September 6): How Much Market and How Much State in Democratic Capitalism Note: Wolf s book is an accessible, excellent treatment of some seminal issues concerning how large the state s and the market s roles should be capitalist economies. Tanzi and Schuknecht document the empirical record of the expansive state in market-oriented economies over the last 130 years. Cameron s piece is a modern classic of comparative political economy that introduces some central theories about the growth of government that we will subsequently reexamine. Chapters 1-4 in Charles Wolf, Markets or Governments? Choosing Between Imperfect Alternatives, 2 nd Ed. Cambridge, MA: MIT Press, Part I (especially Chapter 1) in Vito Tanzi and Ludger Schuknecht, Public Spending in the 20 th Century. New York: Cambridge University Press, David Cameron. The Expansion of the Public Economy: A Comparative Analysis. American Political Science Review 72 (December): Suggested (more on strengths, weaknesses, and trade-offs of markets and governments) Charles Lindblom, Politics and Markets: The Worlds Political-Economic Systems. New York: Basic Books, 1977 Arthur Okun, Equality versus Efficiency: The Big Tradeoff. Washington, DC: Brookings, Dennis Mueller, Public Choice III. New York: Cambridge University Press, 2003, especially Part I.

6 Part II: How Capitalism Shapes Democracy Week 3 (Sept 13). Does Economic Development Cause Democracy and, if so, How? Note: Other than Duverger s Law on the relationship between electoral rules and party systems, there is no better established relationship in political science than the statistical correlation between the level of economic development and democracy. Yet, the question of causality and just exactly how development is linked to democratization remains one of the most debated in the discipline. For Lipset s classic statement and recent seminal work: Ch. 2, "Economic Development and Democracy" in Lipset's Political Man. (Originally in the American Political Science Review (March, 1959). Rueschemeyer, Stephens, and Stephens, Capitalist Development and Democracy. (For purposes of class discussion, especially Chs. 1-4). Adam Przeworski and Fernando Limongi Modernization: Theories and Facts. World Politics (January, 1997): * Carles Boix, Introduction and Chapter 3, Historical Evidence, in Democracy and Redistribution New York: Cambridge University Press, 2003.* Suggested (For further reading and exploration in classics and recent seminal work): Ross Burkhart and Michael Lewis-Beck. Comparative Democracy: The Economic Development Thesis. American Political Science Review 88 (December, 1994): Barrington Moore, The Social Origins of Dictatorship and Democracy (Boston: Beacon Press, 1966). Adam Przeworski et al Democracy and Development (NY: Cambridge University Press, 2000). Daron Acemoglu and James A. Robinson, Economic Origins of Dictatorship and Democracy (NY: Cambridge University Press, 2006). Week 4 (Sept 20). Economic Development versus Political Power in the Development of the Democratic Welfare State? Note: A (perhaps the ) central feature of the state in modern capitalist democracies is the

7 universal commitment of a large share of national resources to welfare protection. Indeed, the majority of national economic product taken and spent by the modern state in democratic capitalist systems is directed toward social welfare provision - social insurance and social services to address the needs of populations at risk from withdrawal from the market (e.g., the aged, disabled, sick, involuntarily unemployed) and cash and social services that redistribute income and material supports toward poorer strata of the income distribution. A central question among social scientists for over a century has been whether or not the social welfare state is a function of the dictates of economic development or a product of politics (e.g., class power, the nature of democratic electoral competition or democratic institutions). Alexander Hicks, Chs Social Democracy and Welfare Capitalism. Ithaca, NY: Cornell University Press, Suggested: Evelyne Huber, Charles Ragin, and John Stephens. Social Democracy, Christian Democracy, Constitutional Structure, and the Welfare State. American Journal of Sociology 99 (1993): * Iversen, Torben and Thomas Cusack. The Causes of Welfare State Expansion. World Politics 52 (April 2000): * Gøsta Esping-Andersen, Three Worlds of Welfare Capitalism. London: Polity Press, Peter Baldwin, The Politics of Social Solidarity: Class Basis of the European Welfare State. New York: Cambridge U. Press, John Williamson and Fred Pampel, Old-Age Security in Comparative Perspective New York: Oxford University Press, Evelyne Huber and John Stephens. Chapters 1-5 in Development and Crisis of the Welfare State: Parties and Policies in Global Markets. Chicago: University of Chicago Press, Week 5 (Sept 27). The Structural Power of Capital, I: A Privileged Position for Business? Note: One of the most central questions for political scientists has been whether the power of private business to control investment (and hence so many features of economic performance) gives them a privileged position or structural power over the state and other interests in democratic capitalism. Is there a limit to how far democratically elected governments can go in

8 providing public goods, insuring citizens against risk, cleaning up the environment, and redistributing income? If so, how strong is that constraint on democratically determined policies? Perhaps the most widely cited statement of the view that democracy is structurally constrained by a capitalist economy is Lindblom s Chapter 13 of the classic, Political and Markets. Pontusson s seminal book explores what can and what can not be achieved in even the most auspicious circumstances under the structural power of business. Articles by Isabella Mares and Martin and Swank raise the question of whether or not it might be in business s interest, under certain conditions, to support significant state expansion or intervention. Chapters 10 and 13 in Charles Lindblom, Politics and Markets Jonas Pontusson. The Limits of Social Democracy Isabela Mares, Ch. 5, Firms and the Welfare State: When, Why, and How Does Social Policy Matter to Employers, in Paper Hall and David Soskice, Varieties of Capitalism.* Cathie Martin and Duane Swank. Does the Organization of Capital Matter Employers and Active Labor Market Policies in Capitalists Democracies. American Political Science Review (December 2004).* Suggested: Adam Przeworski and Michael Wallerstein. Structural Dependence of the State on Capital. American Political Science Review 82 (March, 1988): Duane Swank. Politics and the Structural Dependence of the State. American Political Science Review 86 (March, 1992): Dennis Quinn and Robert Shapiro. Business Political Power: the Case of Taxation. American Political Science Review 85 (September, 1991): Peter Swenson. Capitalist Against Markets: The Making of Labor Markets and Welfare States in the United States and Sweden. New York: Oxford University Press, Week 6 (Oct 4). The Structural Power of Capital, II: Globalization and the Demise of the Keynesian Welfare State? (NOTE: Prof in Cologne Germany this week for a conference but the seminar will meet!) Note: If mainstream social scientists had not fully embraced the notion of the privileged position or structural power of capital before the dramatic liberalization of capital flows (and further liberalization of trade) after the early 1970s, they certainly did in large numbers after this time.

9 Indeed, the mainstream view after the onset of internationalization (positively spun by neoconservatives as a check on big government, regarded as a serious threat to democracy by those on the left) was that trade competitiveness and capital mobility would pressure governments of all ideological stripes to pursue market-conforming policies (that is, retrench welfare states, reverse regulatory expansion, privatize public sector corporations and functions, practice prudent fiscal and monetary policies). Has globalization diminished democracy in the sense that the range of government policy choice has been significantly narrowed? (In this section, we concentrate primarily on the impact of globalization on the welfare state; in subsequent sections we address how globalization has affected economic and other policies as well as the practice of democracy.) Duane Swank, Global Capital, Political Institutions, and Policy Change in Developed Welfare States. Alexander Hicks, Chs Social Democracy and Welfare Capitalism. Suggested: Evelyne Huber and John Stephens. Internationalization and the Social Democratic Model. Comparative Political Studies (June, 1998).* Walter Korpi and Joakim Palme. New Politics and Class Politics in the Context of Austerty and Globalization: Welfare State Regress in 18 Countries, American Political Science Review (Vol. 97, 2003).* Dani Rodrik, Has Globalization Gone Too Far? Washington, DC: Institute for International Economics, Geoffrey Garrett. Global Markets and National Policies: Collision Course or Virtuous Circle. International Organization (No. 4, 1998). Geoffrey Garrett. Partisan Politics in the Global Economy. New York: Cambridge University Press, Layna Mosley. Global Capital and National Governments. New York: Cambridge University Press, Fritz Scharpf and Vivien Schmidt, eds. Welfare and Work in the Open Economy, Parts I and II. New York: Oxford University Press, 2001.

10 Week 7 (Oct 11). Economic Performance and Political Behavior: Do Economics Determine Elections and Government Popularity? Note: In the 1970s, a number of political scientists and economists argued that economics drives electoral outcomes and incumbent government popularity in contemporary democracies. Although the idea finds its origins among 19 th and 20 th century political economists, seminal work such as Edward Tufte s The Political Control of the Economy (Yale U. Press, 1978) set off a torrent of research that has not yet ended. Without question, one of the central questions for students of democratic, market-oriented systems is whether support and electoral outcomes depends on economic conditions and, if so, which conditions, in what ways, and with what consequences for the quality of democracy and for long-term economic performance. Chs. 1-4 in Michael Lewis-Beck. Economics and Elections Michael Lewis-Beck and Mary Stegmaier. Economic Determinants of Electoral Outcomes. Annual Review of Political Science (Vol. 3, 2000): Benjamin Radcliff. The Welfare State, Turnout, and the Economy: A Comparative Analysis. American Political Science Review (Vol. 86, 1992): * G. Bingham Powell and Guy Whitten. A Cross-National Analysis of Economic Voting: Taking Account of the Political Context. American J. of Pol Sci (37, 1993): * Suggested (some seminal work): Edward Tufte. The Political Control of the Economy. New Haven, CT; Yale University Press, Douglas Hibbs, The American Political Economy. Cambridge, MA: Harvard University Press, Douglas Hibbs, The Political Economy of Industrialized Democracies. Cambridge, MA: Harvard University Press, Week 8 (Oct 18). Paper Prospectus Due/Presentations Part III: How Democracy Shapes Capitalism Note: We now turn the question around: how does the development and practice of democracy affect economic policy and performance. In this section, we will confront central questions such as whether democracy hurts or promotes economic development and what types of democratic

11 institutions seem to be better than others in fostering good economic performance and equality. We also address the question of whether politicians manipulate economic policy and, in turn, economic performance for electoral gain. We begin with an examination of the role of big ideas and the politics surrounding them in what is arguably the democratic political construction of 20 th Century capitalism. We specifically focus on the ascent and diffusion of neoliberalism around the globe during the late 20 th century and, theoretically, how ideas, interests, and institutions shape the nature of contemporary democratic capitalism. Week 9 (Oct 25). Ideas, Politics, and Institutional Change in 20 th Century Capitalism Mark Blyth, Great Transformations: Economic Ideas and Institutional Change in the 20 th Century. Suggested: Chs. Xxx in Kathleen McNamara, The Currency of Ideas: Monetary Politics and the European Union. Ithaca: Cornell University Press, 1998.* Beth Simmons, Frank Dobbin, and Geoffrey Garrett, Introduction: The International Diffusion of Noliberalism, in International Organization: Special Issue on the International Diffusion of Neoliberalism Volume 60 (Fall 2006).* Sheri Berman. The Social Democratic Moment: Ideas and Politics in the Making of Interwar Europe. Cambridge: Harvard University Press, Peter Hall, The Political Power of Economic Ideas: Keynesianism Across Nations. Princeton, NJ: Princeton University Press, Douglas North, Institutions, Institutional Change, and Economic Performance. Cambridge: Cambridge University Press, Peter Hall, Policy Paradigms, Social Learning and the State The Case of Economic Policymaking in Britain. Comparative Politics (Vol. 25, 1993). Week 10 (Nov 1). The Impact of Democracy on the Economic Growth, I: Does Democracy Subvert or Foster Economic Growth? Note: One of the most controversial and relevant questions for the academe and for governments throughout the world is whether democracy actually hinders or fosters economic development. Consistent with many social and economic theorists of the modern period, Mancur Olson articulated the widely debated and controversial view that (especially long-lived) democracy

12 would retard economic growth. As we entered the third wave of democratization in the 1980s and 1990's, many feared that at best democracy and the authoritarianism that it commonly replaced would differ little in their impacts on growth. What s the theory and evidence on this central question? (We also visit this question by looking at Wolf s evidence on whether a large public sector, commonly associated with long-lived democratic practice, is associated with slower economic growth. In subsequent weeks we will critically assess at both theoretical and empirical levels these arguments. Mancur Olson. The Rise and Decline of Nations. Yale University Press, Chapter 7 in Wolf, Markets or Governments Ch. 3, Political Regimes and Economic Growth, in Adam Przeworski et al, Democracy and Development.* Matthew Baum and David Lake. The Political Economy of Growth and Democracy and Human Capital. American Journal of Political Science (Vol. 47, 2003).* Suggested (A sample of the voluminous work on democracy s growth effects and general determinants of development/growth): Virginia Grey and David Lowery. Interest Group Politics and Economic Growth in the U.S. States. American Political Science Review (Vol 82, 1988). David LeBlang. Political Democracy and Economic Growth: Pooled Cross-Sectional, Time-Series Evidence. British Journal of Political Science (Vol. 27, 1997). Mancur Olson. Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships. New York: Basic Books, Robert Barro and Xavier Sala-i-Martin. Economic Growth. New York: McGraw-Hill, Robert Baro. Determinants of Economic Growth: A Cross-Country Empirical Study. Cambridge: MIT Press, Week 11 (Nov 8). The Impact of Democracy on the Economic Policy: Are There Political Business Cycles? Note: Are there electorally or partisan-induced cycles in policy and performance? It s a

13 controversial and well-researched question. Alberto Alesina and Nouriel Rubini with Gerald Cohen. Political Cycles and the Macroeconomy Carles Boix. Political Parties and the Supply-Side of the Economy... American Journal of Political Science 41 (July 1997): * Carles Boix. Partisan Governments, the International Economy and Macroeconomic Policies in OECD Countries. World Politics 53 (October, 2000): * Suggested (See the chapters on the effect of parties and elections on policies and outcomes in the seminal work of Tufte and Hibbs; Franzese surveys the voluminous literature since the 1970s.) Edward Tufte. The Political Control of the Economy. New Haven, CT; Yale University Press, Douglas Hibbs, The American Political Economy. Cambridge, MA: Harvard University Press, Douglas Hibbs, The Political Economy of Industrialized Democracies. Cambridge, MA: Harvard University Press, Robert Franzese. Electoral and Partisan Cycles in Economic Policies and Outcomes. Annual Review of Political Science (Vol. 5, 2002). Week 12 (Nov 15). The Impact of Democracy on Economic Growth, II: Do Some Democratic Political Institutions Harm or Foster Economic Growth? Note: In the developed capitalist democracies, the economic and political institutions that give shape to markets (and democratic politics) may differ notably. Much of the research prior to the 1990s (and to an extent till this day) had been directed at whether democratic (as opposed to authoritarian) corporatism fosters better performance than pluralist systems of interest representation and policy making. What does the literature tell us? Chapters 1, Introduction, and 3, Democratic Corporatism and Its Variants, in Peter Katzenstein, Small States in World Markets: Industrial Policy in Europe. (Cornell, 1985).

14 Peter Lange and Geoffrey Garrett, "The Politics of Growth: Strategic Interaction and Economic Performance in the Advanced Industrial Democracies, ," Journal of Politics 47 (1985): Suggested: Rob Franzese and Peter Hall, Institutional Dimensions of Coordinating Wage Bargaining and Monetary Policy. In Iversen, Pontusson, and Soskice, eds., Unions, Employers, and Central Banks: Macroeconomic Coordination and Institutional Change in Social Market Economies. New York: Cambridge University Press, 2000.* Torben Iversen, Decentralization, Monetarism, and the Social Democratic Welfare State, In Iverson, Pontusson, and Soskice, eds., Unions, Employers, and Central Banks.* Philippe Schmitter, "Modes of Interest Representation and Models of Change in Western Europe." Comparative Political Studies 10 (1977): 7-38 David Cameron, Social Democracy, Corporatism, and Labor Quiescence, in John Goldthorpe, Order and Conflict in Contemporary Capitalism (Oxford: Clarendon Press, 1984).* Colin Crouch. Industrial Relations and European State Traditions (New York: Oxford University Press, 1993). Jelle Visser and Anton Hemerijck. A Dutch Miracle: Job Growth, Welfare Reform, and Corporatism in the Netherlands. Ann Arbor: University of Michigan Press/Amsterdam University Press, Remainder: Iverson, Pontusson, and Soskice, eds., Unions, Employers, and Central Banks: Macroeconomic Coordination and Institutional Change in Social Market Economies. New York: Cambridge University Press, Torben Iversen. Contested Economic Institutions: The Politics of Macroeconomics and Wage Bargaining in Advanced Democracies. New York: Cambridge University Press, Week 13 (Nov 22): THANKSGIVING BREAK Week 14 (Nov 29).Varieties of Capitalism: Can More than One Version of Democratic Capitalism Succeed?

15 Note: Beginning with a series publications in the early 1990s (although foreshadowed in the classic work of Schonfeld, Modern Capitalism), political scientists and economists broadened their attention to a panapoly of institutions that coordinate modern market-oriented systems; much of the focus in this varieties of capitalism approach has been on the degree to which the economic and political organization of business coordinates markets or leaves them uncoordinated. In this work, nationally coordinated (largely corporatist) and sector-coordinated market economies are distinguished from uncoordinated or liberal market economies. The central questions are how do these varieties of capitalism differ in economic performance, which is generally superior for maximizing efficiency or equality, or both, and is liberal market capitalism the baseline on which all converge in the face of globalization in product and capital markets. Chs. 1, 2, 4, 7, 8, and10 in Peter Hall and David Soskice, Varieties of Capitalism. Peter Hall and Daniel Gingerich. Varieties of Capitalism and Institutional Complementarities in the Macroeconomy. MPIfG Discussion Paper , Max Planck Institute for the Study of Societies, 2004.* Alex Hicks and Lane Kenworthy, Cooperation and Political Economic Performance in Affluent Democratic Capitalism. American Journal of Sociology 103 (6): * Suggested (For more reading - a sample of seminal and recent important works - from the varieties of capitalism perspective, see the following sample): Michel Albert. Capitalism v. Capitalism. New York: Three Windows, Four Walls Press, Colin Crouch and Wolfgang Streek. The Political Economy Modern Capitalism. Thousand Oaks, CA: Sage, Herbert Kitschelt, et al, eds., Continuity and Change in Contemporary Capitalism. New York: Cambridge University Press, Kathleen Thelen, How Institutions Evolve: The Evolution of Skills in Germany, Britain, the United States and Japan (NY: Cambridge University Press, 2005). Week 15 (Dec 6).Varieties of Welfare Capitalism: Problems of Sustaining Affluence and Achieving Economic and Gender Equity in the 21 st Century. Note: Recent research, often drawing on both varieties of capitalism and Esping-Andersen s

16 worlds of welfare framework, has expanded the range of institutions that are studied, and it Has addressed the questions of which varieties of welfare capitalism produce which mixes of social, economic, and gender equality with good economic performance. From recent work, it is clear that national policies, socioeconomic equality, and economic performance differ in systematic ways across alternative general models of welfare capitalism in the postindustrial era. Jonas Pontusson takes a hard look at the strengths and weakness of liberal market and varieties of social market economies when it comes to equity and prosperity. Jonas Pontusson, Inequality and Prosperity Torben Iversen and Anne Wren. Equality, Unemployment, and Budgetary Restraint: The Trilemma of the Service Economy. World Politics 50 (4): * Frances Rosenbluth, Matthew Light, and Claudia Schrag The Politics of Low Fertility: Global Markets, Women s Employment, and Birth Rates in Four Industrial Democracies. Working Paper, Department of Political Science, Yale University, New Haven Connecticut.* Suggested: Gøsta Esping-Andersen. Social Foundations of Postindustrial Economies. New York: Oxford University Press, Robert Goodin et al. The Real Worlds of Welfare Capitalism. New York: Cambridge University Press, Philip Manow and Bernhard Ebbinghaus. Comparing Welfare Capitalism. New York: Routledge, Alex Hicks and Lane Kenworthy. Varieties of Welfare Capitalism Socio-Economic Review (Vol 1, 2003). Research Paper Due: December 11

17 Critical Review/Presentation Assignment Preferences Select four in order of preference of the following topics/weeks for critical review/presentation. I will assign two topics/weeks to each seminar participant, attempting to maximize everyone s preferences. The options are Your Name and Declare Preferences Below (list week number/date and main part of title of topic): Part II: How Capitalism Shapes Democracy Week 3 (Sept 13). Does Economic Development Cause Democracy? Week 4 (Sept 20). Economic Development or Political Power in the Development of the Democratic Welfare State? Week 5 (Sept 27). The Structural Power of Capital, I: A Privileged Position for Business? Week 6 (Oct 4). The Structural Power of Capital, II: Globalization and the Demise of the Keynesian Welfare State? Week 7 (Oct 11). Economic Performance and Political Behavior: Do Economics Determine Elections and Government Popularity? Part III: How Democracy Shapes Capitalism Week 9 (Oct 25). Ideas, Politics, and Institutional Change in 20 th Century Capitalism Week 10 (Nov 1). The Impact of Democracy on the Economic Growth, I: Does Democracy Subvert or Foster Economic Growth? Week 11 (Nov 8). The Impact of Democracy on the Economic Policy: Are There Political Business Cycles? Week 12 (Nov 15). The Impact of Democracy on the Economic Growth, II: Do Some Democratic Political Institutions Notably Harm or Foster Economic Growth? Week 14 (Nov 29). Varieties of Capitalism: Can More than One Version of Democratic Capitalism Succeed? Week 15 (Dec 6). Varieties of Welfare Capitalism: Problems of Sustaining Affluence and Achieving Economic and Social Equity in the 21 st Century. Preference 1. Preference 2. Preference 3. Preference 4.

18 Critical Review Essay Critical Review/Presentation Assignments Content: For each of the two topic areas selected, provide a critical review essay that covers the required reading and recommended readings denoted by an asterisk. (These materials will be included in purchased texts, will be available electronically, or will be on reserve at the library.) The critical review essay should include the following. (a.) Reviewers should provide a synopsis of the main arguments of each author and a concise overview of the evidence used to substantiate those arguments. Do not attempt any detailed recapitulation of all that is discussed in a book and set of articles; a few concise paragraphs on the arguments of an author and another few paragraphs on the evidence and analysis will suffice. (b.) Reviewers should also critically reflect on each reading. This may be done by contrasting and comparing the readings where the relative strengths and weaknesses of each are highlighted; commenting on the logic of the argument and the adequacy of evidence; and, where appropriate, using theories and evidence from other sections in this course or knowledge gained in other courses to assess whether the author's thesis is correct. Organization: One might organize the essay by sequentially discussing the readings and by providing a comparative synthesis in a concluding set of paragraphs. Alternatively, one might organize the essay by specific questions or themes common across the readings and thus discuss each article's arguments and contributions to each issue. Generally, the readings themselves and reviewer's analytical style and talents will suggest one or the other format. Class Presentation: For each session/class meeting, I will make a brief introductory or summary presentation of background and material relevant to that week s particular topic. Generally, we will then proceed with a discussion and dissection of that week s required reading; the presenter will have some responsibility to be particularly active if not lead during that general discussion. The main in-class task for each of the two selected weeks is to present one of the key recommended readings (those marked by an asterisk) to the class. Keeping in mind there will be two presenters each week (that is, commonly two people per topic), we will devote the last 30 minutes or so of each session to those presentations and subsequent discussion. Specifically, in roughly 15 minutes, plan to present the arguments the theory and hypotheses of the recommended reading, an overview of the methodology used, and a synopsis of major findings and conclusions of the author(s). Be concise and polish your presentation before class. (The use of a class handout that summarizes arguments or findings is often useful.) Other seminar members should assume it is their duty to challenge the presenter if s/he is unclear in presentation or if a seminar participant believes the presenter is wrong in interpretation or critique. NOTE: The written critical review essay is due at the beginning of the relevant class session and will serve as the basis of the grade for the critical review assignment.