David Soskice

The London School of Economics and Political Science | LSE · Department of Government

Democratic Capitalism at the Crossroads: Technological Change and the Future of Politics. By Carles Boix. Princeton: Princeton University Press, 2019. 272p. $27.95 cloth. - Volume 18 Issue 2 - Torben Iversen, David Soskice

Response to Carles Boix’s review of Democracy and Prosperity: Reinventing Capitalism through a Turbulent Century - Volume 18 Issue 2 - Torben Iversen, David Soskice

This chapter considers the “second-order” effects of the transition to the knowledge economy. This means the set of preferences, beliefs, and party allegiances that are crystallizing as a consequence of the political-economic realities brought about by the knowledge economy. Chapter 3 considered “first-order” effects—immediate policy responses refl...

It is a widespread view that democracy and the advanced nation-state are in crisis, weakened by globalization and undermined by global capitalism, in turn explaining rising inequality and mounting populism. This book argues that this view is wrong: advanced democracies are resilient, and their enduring historical relationship with capitalism has be...

This chapter argues that governments in the developed world pursue policies to expand the advanced capitalist sectors, including tough competition policies, which force capitalists to compete and take risks rather than guaranteeing them safe and high returns on their capital. The resulting national frameworks both supply the public goods required f...

This chapter argues that the information and communications technology revolution clearly illustrates the underlying hypotheses of the book: first, that advanced capitalist democracies have been remarkably resilient in the face of major shocks—even given the rise of populism, neither advanced capitalism, nor advanced democracy, nor the autonomy of...

Industrialization and democratization were historically intimately linked in today's advanced democracies. The forging of this linkage marks the beginning of the symbiotic relationship between democracy and capitalism, which is the focus of this book. This chapter seeks to explain how this came about. Although the mechanisms are different across co...

A central element of the argument of this book is the symbiosis between the interests of the skilled, educated workforces of the advanced capitalist sectors and their support for the political maintenance and promotion of those sectors. This chapter examines how this argument works in the technological regime of Fordism. It outlines how differences...

This review sets out four main explanatory paradigms of penal policy—focusing on, in turn, crime, cultural dynamics, economic structures and interests, and institutional differences in the organization of different political economies as the key determinants of penal policy. We argue that these paradigms are best seen as complementary rather than c...

This review sets out a recently developed comparative political economy literature on the Eurozone, with a basis in both varieties of capitalism and modern macroeconomics. It contrasts the export-oriented northern European skill-intensive coordinated market economies with coordinated wage-bargaining, with southern European demand-driven economies a...

Lucio Baccaro and Jonas Pontusson make a significant contribution to comparative political economy with their approach to analyzing growth in advanced economies, which focuses on the demand side of the economy and distributive conflict. In contrast to Baccaro and Pontusson, however, we view their approach as reinforcing recent developments in varie...

Patterns of crime and punishment in the USA greatly magnify corresponding developments in other liberal market economies – Australia, Canada, New Zealand and the UK – faced with similar broad macro-technological transformations, namely the collapse of Fordism in the 1970s and 1980s and the development of knowledge economies in the 1990s and 2000s....

Growing polarization in the American Congress is closely related to rising income inequality. Yet there has been no corresponding polarization of the U.S. electorate, and across advanced democracies, mass polarization is negatively related to income inequality. To explain this puzzle, we propose a comparative political economy model of mass polariz...

The knowledge economy, deindustrialization, and the decline of Fordism have undermined the economic complementarities that once existed between skilled and semiskilled workers. The result has everywhere been a decline in coordinated wage bargaining and unionization and a notable rise in labor market inequality. Yet, the political responses have bee...

We argue that the welfare state operates very differently in the advanced sectors of modern economies and in the low-skill sectors. Governments are concerned to promote the advanced sectors of their economies in which they have comparative advantage. This is a valence issue not a partisan one. Where companies and employees in advanced sectors co-in...

I set out and explain Piketty's model of the dynamics of capitalism based on two equations and the r > g inequality (his central contradiction of capitalism). I then take issue with Piketty's analysis of the rebuilding of inequality from the 1970s to the present on three grounds: First, his model is based on the (neo-classical) assumption that comp...

Comparative analysis of violent crime is hampered by a lack of reliable statistics, even between relatively similar countries, with doubts about existing studies suggesting that further comparative data is needed. Violent crime presents particular problems of variation in offence definition and recording practices. We can, however, derive reasonabl...

In terms of key criminal justice indices such as the rate of the most serious violent crime and the imprisonment rate, the United States not only performs worse than other advanced democracies, but does so to a startling degree. Moreover these differences have become more extreme over the last half century. For example, the imprisonment rate, which...

Classical rational choice explanations of voting participation are widely thought to have failed. This article argues that the currently dominant Group Mobilization and Ethical Agency approaches have serious shortcomings in explaining individually rational turnout. It develops an informal social network (ISN) model in which people rationally vote i...

This paper explains the enduring disparities in inequality and welfare states across advanced economies in terms of varieties of capitalism and political systems. Where capitalism is coordinated as in much of Northern Europe, political systems are consensus-based with Pr elections; consensus politics and coordinated capitalism reinforce each other...

"Macroeconomics without the LM curve" has begun to move advanced undergraduate closed economy macroeconomics teaching models away from the IS/LM approach to simple versions of the New Keynesian models taught in graduate courses and used in central banks. But the equally traditional and antiquated Mundell-Fleming model still dominates undergraduate...

A major puzzle in the open economy literature is why some countries have persistently higher real exchange rates than others. Even more puzzling is the fact that countries with high real exchange rates are strong export performers. We solve both puzzles with a model that integrates two central debates in the comparative political economy of advance...

Protocorporatist West European countries in which economic interests were collectively organized adopted PR in the first quarter of the twentieth century, whereas liberal countries in which economic interests were not collectively organized did not. Political parties, as Marcus Kreuzer points out, choose electoral systems. So how do economic intere...

This article begins by explaining the positive relationship between distributional equality and redistribution. It proposes in the second section that the correlation is indirect: two factors, the electoral system and the degree of economic coordination, each impact on both distribution and redistribution. Proportional representation (PR) promotes...

Historical institutionalists have been among the most cognizant of the importance of considerations of time in studying political phenomena. However, they have tended to do so in ways that assume the absence of sufficient information or rationality on the part of actors. By contrast, rational choice institutionalists have tended to hold precisely t...

I present a theoretical account of the politics of privatization that predicts left-wing support for the policy is conditional on the long-run strength of left-wing parties in a political system. In marked contrast to predictions derived from a traditional interest group approach, my claim is that a stronger systemic position will make it more like...

The authors present an alternative to power resource theory as an approach to the study of distribution and redistribution. While they agree that partisanship and union power are important, they argue that both are endogenous to more fundamental differences in the organization of capitalist democracies. specifically, center-left governments result...

The first half of this article explains the enduring disparities in inequality and welfare states across advanced economies in terms of varieties of capitalism and political systems. Where capitalism is coordinated, as in much of northern Europe, political systems are consensus-based with proportional representation (PR); consensus politics and coo...

Book description: In recent years, there has been much debate over the extent to which undergraduate textbook macroeconomic models are theoretically well grounded and whether they adequately reflect the latest developments in the field. The aim of Macroeconomic Theory and Macroeconomic Pedagogy is to encourage and advance this debate, with a specif...

Since unification, the debate about Germany's poor economic performance has focused on supply-side weaknesses, and the associated reform agenda sought to make low-skill labour markets more flexible. We question this diagnosis using three lines of argument. First, effective restructuring of the supply side in the core advanced industries was carried...

Standard political economy models of redistribution, notably that of Meltzer and Richard (1981), fail to account for the remarkable variance in government redistribution across democracies. We develop a general model of redistribution that explains why some democratic governments are more prone to redistribute than others. We show that the electora...

We review the use of macroeconomics in political science over the past 40 years. The field has been dominated by new classical theory, which leaves little room for economic policy and focuses attention on what democratic governments can do wrong in the short term. The resulting literatures on political business cycles and central bank independence...

There is considerable variation in the extent to which governments redistribute income, and there is broad agreement that the explanation for such redistribution lies in the design of political institutions and partisan responses to inequality (see also the chapters by Brandolini and Smeeding, Beramendi and Cusack, and Rueda, this volume). But just...

Book description: Despite exporting more good and services than any other country in the world, economic growth in Germany has been slow through the nineties and the early twenty first century with low wage growth, rising unemployment and increasing public deficits. German unemployment was traditionally diagnosed as structural, neglecting macroecon...

Since unification, the debate about Germany's poor economic performance has focused on supply-side weaknesses, and the associated reform agenda sought to make low-skill labour markets more flexible. We question this diagnosis using three lines of argument. First, effective restructuring of the supply side in the core advanced industries was carried...

We develop a general model of redistribution and use it to account for the remarkable variance in government redistribution across democracies. Weshow,that the electoral system plays a key role because it shapes the nature of political parties and the composition of governing coalitions, whether these are conceived as electoral alliances between,cl...

Este artículo presenta un nuevo marco de análisis para dar cuenta de qué modo las variaciones en las instituciones nacionales condicionan y estructuran la política económica y el desempeño de los países. Mediante la aplicación de la nueva economía de la organización al estudio de la macroeconomía, el trabajo sostiene que las competencias básicas de...

Contenido: 1) Modelos macroeconómicos; 2) Oferta, demanda y ciclos del negocio; 3) Inflación, desempleo y reglas monetarias; 4) Mercado de trabajo y políticas de oferta; 5) Política monetaria; 6) Política fiscal; 7) Consumo e inversión; 8) Dinero y finanzas; 9) Economía abierta: 10) Inflación y desempleo en la economía abierta; 11) Política de rend...

This article shows how cross-national variation in labor market attributes, social policies affecting female employment, and divorce laws affect both female labor force participation and divorce. These in turn lead to a systematic gendered pattern in the preferences for government spending on social services. By analyzing data on household division...

We develop a graphical 3-equation New Keynesian model for macroeconomic analysis to replace the traditional IS-LM-AS model. The new graphical IS-PC-MR model is a simple version of the one commonly used by central banks and captures the forward-looking thinking engaged in by the policy maker. Within a common framework, we compare our model to other...

We develop a graphical 3-equation New Keynesian model for macroeconomic analysis to replace the traditional IS-LM-AS model. The new graphical IS-PC-MR model is a simple version of the one commonly used in central banks and captures the forward-looking thinking engaged in by the policy-maker. We show how it can be modified to include a forward-looki...

Introduction: The national institutional framework of the United States’ economy has proven favorable to the expansion of high-technology industries. Since the early 1980s the US economy has evolved to support a dramatic expansion in biotechnology, software, and a variety of other fast-moving high-tech activities with close links to basic science....

for very helpful comments and suggestions; and to the participants of a Social and Political Theory seminar at the ANU in February 2003 and the participants of a conference panel of the Australasian Association of Philosophy at the University of Adelaide in July 2003 for comments and discussion. 1 The epistemology of special majority voting: Why th...

We provide an political-institutional explanation for the enormous variance in the extent to which democratic governments redistributes income from rich to poor. In addition to the number of veto points, which has been emphasized in the existing literature, we show the importance of the skill system and of the electoral system. The nature of skills...

L'approche en termes de « variétés de capitalisme » pose que pour coordonner leurs acti-vités, les entreprises peuvent soit compter principalement sur les marchés, soit s'appuyer sur des modes de coordination hors marché. Ces différences découlent du type et du niveau de soutien institutionnel dispo-nible pour la coordination de marché ou pour la c...

We present a theory of social policy preferences that emphasizes the composition of peopleÕs skills. The key to our argument is that individuals who have made risky investments in skills will demand insurance against the possible future loss of income from those investments. Because the transferability of skills is inversely related to their specif...

Social protection does not always mean 'politics against markets.' In this chapter we argue, as did Polanyi (1944), that social protection rescues the market from itself by preventing market failures. More specifically, we contend that social protection aids the market by helping economic actors overcome market failures in skill formation. We show,...

Applying the new economics of organization and relational theories of the firm to the problem of understanding cross‐national variation in the political economy, this volume elaborates a new understanding of the institutional differences that characterize the ‘varieties of capitalism’ found among the developed economies. Building on a distinction b...

Applying the new economics of organization and relational theories of the firm to the problem of understanding cross‐national variation in the political economy, this volume elaborates a new understanding of the institutional differences that characterize the ‘varieties of capitalism’ found among the developed economies. Building on a distinction b...

Little attention in the EMU literature has been paid to the interaction between central bank monetary rules and systems of collective wage bargaining. Analytically and empirically, coordinated wage-bargaining systems respond with real wage restraint to non-accommodating monetary policy. Since wage determination is dominated by collective bargaining...

Monetary rules matter for the equilibrium rate of employment when the number of price-wage setters is small, even when assuming rational expectations, complete information, central bank precommitment, and absence of nominal rigidities. If the central bank is nonaccommodating, sufficiently large unions, bargaining independently, have an incentive to...

Buy this book Cambridge University Press Amazon.co.uk Blackwell Waterstone's WHSmith Google Product Search Borrow this book Find this book in a library This book focuses on some of the most important political-economic changes in advanced industrialized countries over the past two decades, namely, the sharp rise in unemployment in some countries a...

The paper explores the influence of institutional frameworks on the evolution of the German software and biotechnology sectors. It links institutional constraints to poor performance of German firms in high volume market niches characterized by turbulent technological change and substantial financial risk. However, German firms are prospering in so...

How will EMU influence the European political economy? This paper argues that most of the likely alternatives are unsustainable for at least some of the EMU member-states. As a result, the Stability Pact imposed by the Kohl government and the Bundesbank is likely to be rejected by other member-states. Additionally, EMU will most likely also have an...

Dutch economic performance in the 1990s has drawn envious attention from Germany: unemployment is low (6% in 1997 and falling), economic growth is strong, and its combination of low inflation and small budget deficit should allow it painlessly to meet Maastricht criteria for European Economic and Monetary Union. While similar economic results have...

The pattern of innovation in Germany is substantially different from that in the US and the UK. It is argued that German patterns of innovation - incremental innovation in high quality products especially in engineering and chemicals - require long-term capital, highly cooperative unions and powerful employer associations, effective vocational trai...

The German economy is recovering hesitantly from the sharp post-unification boom and recession. Two features of recent West German performance are novel: there has been an unprecedented loss of jobs in industry, and manufacturing profitability has been pushed to its lowest level ever and is now low relative to other OECD economies. Serious problems...

This paper discusses industrial and economic adjustment in France in the 1980s. Itargues that French industry followed a path of adjustment throughout the decade,which was fundamentally different from both the German-Japanese style organisedcapitalism, and the US-UK type of deregulated capitalism. The analysis attributesthis to the structure and in...

In diesem Papier werden Ausbildungszertifikate und Diplome als Industrie-Normenverstanden und analysiert, also als Dokumente mit standardisierten Informationen fürdie Akteure in der Wirtschaft. Im ersten Teil wird der vergleichende Analyserahmenentwickelt und die Hypothese über die verschiedenen Modelle des zeitgenössischen Kapitalismus dargestellt...

This intermediate level textbook concentrates on macroeconomic analysis and is one of the first to focus on imperfectly competitive labour and product markets. The authors present a `new Keynesian' treatment of macroeconomics. Its key characteristic is the use of wage bargaining and price-setting under imperfect competition, making product and labo...

This paper explains the enduring disparities in inequality and welfare states across advanced economies in terms of varieties of capitalism and political systems. Where capitalism is coordinated as in much of Northern Europe, political systems are consensus-based with pr elections; consensus politics and coordinated capitalism reinforce each other...

I present a theoretical account of the politics of privatization that leads to predictions regarding the effect of partisanship that are contingent on the strength of traditionally left-leaning interest groups. However, in marked contrast to predictions derived from a traditional interest group approach, my claim is that stronger left-leaning inter...

We provide an political-institutional explanation for the enormous variance in the extent to which democratic governments redistributes income from rich to poor. In addition to the number of veto points, which has been emphasized in the existing literature, we show the importance of the skill system and of the electoral system. The nature of skills...

Abstract will be provided by author.

Abstract will be provided by author.

At the turn of the century more parties of the Left were in government in advanced capitalist countries than ever before, including, for the first time ever, those of the four largest West European countries. Does this make a substantial difference to the conduct of economic policy? Even 20 years ago the answer would have been clear. Mitterrand had...

First preliminary draft] Prepared for presentation at the Annual Meetings of the American Political Science Association, Boston, August 28-31, 2008.

"Mitte der neunziger Jahre erreichte die europäische Arbeitslosenquote ihren Höchststand in der Nachkriegsperiode. Hauptziel dieses Beitrags ist es, alternative beschäftigungspolitische Optionen aufzuzeigen, die sich im Kampf gegen die anhaltende Arbeitslosigkeit als konsensfähig unter den Mitgliedsstaaten der Europäischen Währungsunion erweisen. N...