Abstracts & Papers in Stream 1

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.

The NIEs in East Asia are today undergoing institutional instabilities and changes under the pressure of democratization and globalization. They have faced different environment both domestically and internationally in comparison with the past high-growth period in which the strong developmental state played a dominant role in coordinating various institutions of production and welfare regimes.
Korea is no except to these changes. Perhaps the Korean political economy is today significantly changing more than any other neighbor East Asian countries. Since the post-financial crisis in Korea, globalization pressures and the power shift to the popular sector by the Kim Dae Jung and Roh Moo-hyun governments in the democratization process, interacting with each other, are now critically affecting the power relations among various social groups and classes and reshaping the economy and social welfare now and into the future.
Although the previous two relatively progressive governments had attempted to search for new equilibriums for solving the current problems, the recent changes especially since the financial crisis in 1999 are apparently changing toward a liberal type of welfare capitalism as a result of the comprehensive neo-liberal reforms. Is that so? It seems that the Korean political economy is now very unstable by revealing some critical tensions among the institutions in the production and welfare regimes as well as the relevant politics, and thus falling in the process of a critical historical conjuncture in searching for a new paradigm of the welfare capitalism adapting to these changes.
How can we interpret Korea's current changes and responding strategies? How much have the past institutional legacies of the developmental state changed and created new paths for institutional change to the future? In other words, to what extent have the current changes revealed the path-dependent nature from the past institutional legacies and to what direction is the Korean welfare capitalism really moving?
The varieties of capitalism(VOC) approach has been getting attention as a useful analytical tool for explaining the existence of the different types of the political economies and their continuities and changes through time. Institutional complementarities and modes of coordination (or coordination mechanism) seem to be key concepts in the VOC perspective for explaining institutional continuities and changes in response to the endogenous as well as exogenous challenges.
Based on these analytical tools, this paper tentatively attempts to identify what kind of institutional complementarities and modes of coordination have been formed between the core institutional domains in the production and welfare regimes in Korea and explaining why and how they are changing. By doing so, this paper aims at evaluating the usefulness as an analytical framework based on the VOC perspective and obtaining some theoretical and empirical implications in explaining the recent changes in the political economies in the East Asian context.

Full paper download: Chung M_production and welfare regimes in Korea.pdf