In the recent discussion about the impact of economic globalization upon the welfare regime among comparative political economy scientists, the 'Varieties of Capitalism' (VoC) approach has aroused much attention and provoked many debates. Centered on the crucial role of the firms in the coordination of economic activities, this approach highlights the different weights of coordinative capacity of the firms in the different political economies. Measured by different coordinative institutions, two regimes across advanced industrial democracies have been specified: Liberal Market Economies (LMEs) and Coordinated Market Economies (CMEs). Along the debate on the convergence or divergence trends of the political economies in the context of globalization, this approach contributes much to the analysis of the responding strategies of the different political economies under preexisting institutional constraints. However, as Jackson and Deeg (2006) has indicated, most of the empirical analysis using VoC approach center mainly on the OECD countries. The East-Asia as a distinct form of capitalism has been ignored1. This panel aims to contribute to this field. By analyzing the welfare and labor market reform in East-Asia, this panel tries to examine the explaining power of the VoC approach in analyzing the East-Asian social protection system reform since the financial crisis in 1997. By focusing on an emerging quais-institutional social protection system, this panel aims to examine the 'universal' validity of the VoC approach in the non-West countries.
The insight of the VoC approach shows that it offers a fresh and broad analytical tool for examining the interchange between (capitalist) market system and non-market institution under different historical and societal conditions. In the theoretical tradition of comparative political economy and economic sociology, there is nothing new to explore the institutional or non-institutional preconditions of the market-building process.
Durkheim, for example, has indicated the non-contract precondition of the contractian system.
The advantage of the VoC approach lies in the probability of extending its analysis to the other non-Western political economies, particularly that of emerging market economies.
VoC's approach could open a window for the analysis of institutional complementarities between production and welfare regimes, particularly for the cases in the welfare state building process (eg. the transitional economy). His suggestion allows us to approach the problematic of welfare state building with an institutional method. In this method, the macro- and micro analytical level can be combined. In the macro-level, we can explain what institutional arrangements as equilibrium have been chosen in the process of options selection. In the micro-level, the incentives of the related actors (state and firms) can be specified. The above problematic will be examined in this panel.
Jackson, Gregory and Richard Deeg (2006) How many Varieties of Capitalism? Comparing the Comparative Institutional Analysis of Capitalist Diversity. Max-Planck Institute for the Studies of Societies Discussion Paper 06/2.
Huber, Evelyne (ed.) (2002) Models of Capitalism: Lessons for Latin America, Pennsylvania State University Press.