Measuring Change of Capitalist Varieties: Reflections on Method, Illustrations from the BRICs

Abstract

How to indicate institutional diversity and gradual change in capitalist political economies? What is the appropriate typological method, how could a suitable typology look? In the Weberian tradition, this article pleads for a method that rigorously distinguishes ideal types from empirical cases. Ideal types (like liberal capitalism) idealise reality by emphasising certain aspects, cases (like Brazilian capitalism) are hybrids more or less approximating the types. Contrasting static classifications that do not allow for gradual change, the latter has to be understood as the movement of cases in the field between the types. Using the state–economy and capital–labour relationships as criteria the article proposes a typology consisting of liberal, statist, corporatist, meso-communitarian and patrimonial types. Liberalism, statism and particularly patrimonialism are relevant for emerging economies. In the second half, the article illustrates its methodological recommendation by indicatively mapping institutional change from 1998 to 2008 in political economies that recently gained importance: the BRICs (Brazil, Russia, India, China), Turkey and a few Eastern European ones. It turns out that most of them liberalised but that this change was rather modest in the BRICs, while it was more significant in Eastern Europe. Yet statism and patrimonialism appear still to be strong.

Keywords:

• capitalist varieties
• ideal types versus cases
• gradual institutional change
• BRICs

Notes

For comments I would like to thank Dorothee Bohle, Renato Boschi, Jan Drahocoupil, Ana Evans, Bela Greskovits, Surajit Muzamdar, Vivien Schmidt, Ben Schneider, Sven Steinmo, Alexandra Vasileva and three anonymous reviewers.

In accounts where institutional change is not the subject – for example in the description of economic performances of capitalist countries – classifications might be a pragmatically sufficient choice. Then, one might call both the US and Britain ‘liberal’ and consider the differences between their political economies as not relevant for the research one intends to conduct (for example, the British labour market is less flexible than the American one, and in Britain unionisation, collective bargaining coverage and public expenditures are roughly in-between those in the US and continental Europe). And one might call both France and Sweden ‘coordinated’ while ignoring, among other differences, that statism has been relatively strong in France whereas Sweden is rather corporatist.

The empirical realities at the basis of analytical idealisation might even be politico-economic configurations that are far away from ‘ideal’ performance. Moreover, nobody knows how the institutional configuration of ideal-typical performance would look like, let alone how ideal, type-specific performance would look like.

Crouch (2005a: 26) formulates this approach in a reverse way by considering cases as entities where elements of different types merge instead, as I do, of locating cases in the field between ideal types.

When adding up to the capital–labour and state–market relations, culture and ideology could be given the status of a separate, third criterion. Sometimes they add something up, sometimes they do not. As example of the latter we can take corporatist capital–labour relations. They not only involve negotiations in terms of the common interest, but also a culture of consensualism. As integral part of social relations culture does not need to be mentioned as a separate criterion, however. Higher or lower than average levels of risk-taking and of individual independence, by contrast, are examples of relatively autonomous cultural traits and therefore not natural aspects of whatever capitalist variety's structural relations. Because the maxim of simplicity could become threatened we should only use this criterion for constructing ideal-typical sub-varieties of capitalism – such as conservative and social democratic corporatism – and circumscribe it as the normative orientation of a political economy that is about ‘core’ norms – what is considered ‘normal’ in a political economy – and basic ideological principles.

Embedded capitalism – a concept originating in the tradition of Karl Polanyi (1957) – is perhaps more suitable as contrast to liberal capitalism because the concept of coordination implicitly assumes a coordinating agent that coordinates macro, meso and micro operations. Such an agent might be imagined in rational choice economics (cf. Allen 2004) but is hardly present at the macro-level of a market economy.

Regarding Russia this is perhaps problematical because after 80 years of industrialisation the country is about as individualised as Eastern Europe on average. But Russian government spending seems to be relatively low because social security benefits to a large degree are at the cost of the companies (cf. Commander and Jackman 1993; KPMG 2012), not because of an outspokenly liberal policy.

Taking all 10 IEF indicators with each one counting for a tenth and 1995 instead of 1998 as T₁ Poland is a pronounced liberaliser, however.

The scores of the Corruption Perception Index of Transparency International in many cases deviate from those of the IEF. In Russia, corruption has increased relatively more in the CPI than in the IEF, but the Chinese, Turkish, Czech, Polish and Slovakian scores differ considerably. See Table N1. This is one more example of the imprecision of the social sciences. A critical account on corruption data is moreover presented by Swain, Mykhnenko and French (2010).

At first sight, one can think that for example the Chinese product market in 2008 was four times as regulated as that of the US (see the second column of Table 2), but the OECD scale runs from 0 to 6 (total regulation) and converted into scores from 0 (total regulation) to 100 the difference between China and the US is only one between 45 and 86 (column 4 in Table 2; if the maximum PMR score would be fixed at for example 4 or 5 instead of 6, the differences in the converted scores would increase).

On a ray of 10 cm, one index/percentage point would be 1 mm in the figures presented here. In the space available one index point is the equivalent of almost nothing, however, and 1 cm is, depending on the size of the figure, the equivalent of 20 to 25 index or percentage points.