Varieties of capitalism and institutional complementarities in the macroeconomy: An empirical analysis

The article examines how national variations in the institutions of the political economy affect economic performance of developed market economies and whether institutional complementarities in the macroeconomy are present. The varieties-of-capital ism approach contends that these complementarities exist und that nations cluster into identifiable groups based on the extent to which market or strategic modes of coordination are dominant in their economies. The paper is subjecting, some of the core contentions of the approach to empirical tests based on aggregate analysis of a large number of cases. The results support the hypotheses. The liberal and coordinated market economies vary systematically according to the relative balance between stratecyic and market coordination in their political economies. Institutional complementarities are present across spheres of the political economy in both types and appear to offer general efficiencies. Finally, the paper analyses patterns of institutional chancre in the developed economies and discusses some political implications of its findings.