A Multidisciplinary Review of the Study of Innovation Systems
New Horizons in the Economics of Innovation series
Edited by Steven Casper and Frans van Waarden
Chapter 7: Varieties of capitalism: comparative institutional approaches to economic organization and innovation
Steven Casper, J. Rogers Hollingsworth and Richard Whitley The publication of Michel Albert’s Capitalism vs. Capitalism in 1993 sparked widespread public interest in the comparative advantages and faults of particular models of capitalism. However, systematic comparisons of the variety of institutional arrangements that structure the organization of market processes across the advanced industrial countries have long been a mainstay across the social sciences. This survey overviews the main currents of this literature within the comparative political economy and economic sociology fields. Varieties of capitalism approaches have, for the most part, developed in isolation from the national systems of innovation perspectives that have emerged within institutional economics. Another survey (Chapter 3) examines the broad innovation systems literature more closely. 1 APPROACHES TO INSTITUTIONAL THEORIZING: AN OVERVIEW Before presenting a review of comparative institutional approaches to economic organization and innovation, we first present a short overview of modes of institutional theorizing within social sciences today. There exist three general theoretical perspectives on institutions, each of which has its own strengths and weaknesses. These are: 1) new institutionalist theory, 2) social embeddedness or constructivist approaches, and 3) approaches focusing on power at the core of institutions. 1.1 The New Institutionalist Theory The thinking of the new economic institutionalists (Williamson 1985) is based upon a central hypothesis: rational agents have self-interest in building 193 194 The broader environment: institutions efficient institutions in order to govern their strategic interactions. Consequently, mixing full rationality (that is, the ability to compute the outcome of even highly complex...
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