Hostname: page-component-cd9895bd7-p9bg8 Total loading time: 0 Render date: 2024-12-24T09:40:19.845Z Has data issue: false hasContentIssue false
  • English
  • Français

Internationalization, institutions, and political change

Published online by Cambridge University Press:  22 May 2009

Geoffrey Garrett  and
Peter Lange
Geoffrey Garrett
Affiliation:
Associate Professor, Department of Management, The Wharton School, University of Pennsylvania, Philadelphia.
Peter Lange
Affiliation:
Professor, Department of Political Science, and Vice Provost for Academic and International Affairs, Duke University, Durham, North Carolina.
Get access

Abstract

Many analysts associate internationalization of markets with wide-ranging changes in domestic politics. An “open polity” approach shows how extant domestic institutions mediate in this relationship between internationally induced changes in domestic actors' policy preferences, on the one hand, and national policy and institutional outcomes on the other. The nature of labor unions and formal political institutions often results in political outcomes that differ significantly from those that would ensue if outcomes simply mirrored preference changes. In addition, while existing institutions may sometimes constrain governments from pursuing policies that would improve long-term economic performance, governments will often fail to change these institutions because of short-term political considerations.

Type
Articles
Information
International Organization , Volume 49 , Issue 4 , Autumn 1995 , pp. 627 - 655
Copyright
Copyright © The IO Foundation 1995

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1. Rogowski, Ronald, Commerce and Coalitions (Princeton, N.J.: Princeton University Press, 1989)Google Scholar.

2. Frieden, Jeffry, Debt, Development, and Democracy (Princeton, N.J.: Princeton University Press, 1991)Google Scholar.

3. Milner, Helen, Resisting Protectionism (Princeton, N.J.: Princeton University Press, 1988)Google Scholar.

4. Frieden, Jeffry and Rogowski, Ronald, “The Impact of the International Economy on National Policies: An Analytic Overview,” in Keohane, Robert O. and Milner, Helen V., eds., Internationalization and Domestic Politics (New York: Cambridge University Press, forthcoming)Google Scholar.

5. See for example, Krehbiel, Keith, Information and Legislative Organization (Ann Arbor: University of Michigan Press, 1991)CrossRefGoogle Scholar; and Milgrom, Paul, North, Douglass, and Weingast, Barry R., “The Role of Institutions in the Revival of Trade: The Medieval Law Merchant, Private Judges, and the Champagne Fairs,” Economics and Politics 1 (03 1990), pp. 1–23CrossRefGoogle Scholar.

6. There are exceptions to this rule, but they are rare. See, for example, Bawn, Kathleen, “The Logic of Institutional Preferences: German Electoral Law as a Social Choice Outcome,” American Journal of Political Science 37 (11 1993), pp. 965–89CrossRefGoogle Scholar; and Lohmann, Susanne, “Federalism and Central Bank Autonomy,” manuscript, Department of Political Science, University of California, Los Angeles, 1995Google Scholar.

7. See Thelen, Kathleen and Steinmo, Sven, “Historical Institutionalism in Comparative Politics,” in Steinmo, Sven, Thelen, Kathleen, and Longstreth, Frank, eds., Structuring Politics: Historical Institutionalism in Comparative Analysis (New York: Cambridge University Press, 1992)Google Scholar.

8. Goldstein, Judith, Ideas, Interests, and American Trade Policy (Ithaca, N.Y.: Cornell University Press, 1993)Google Scholar.

9. The seminal work on the relationships between economic outcomes and government tenure pertains to the stable democracies. See Hibbs, Douglas, The American Political Economy (Cambridge, Mass.: Harvard University Press, 1987)Google Scholar; Kramer, Gerald, “Short-Term Fluctuations in U.S. Voting Behavior, 1896–1964,” American Political Science Review 65 (03 1971), pp. 131–143CrossRefGoogle Scholar. However, recent research shows that economic outcomes significantly affect the probability of less orderly transfers of power (such as coups and revolutions). See Londregan, John and Poole, Keith, “Poverty, the Coup Trap, and the Seizure of Executive Power,” World Politics 42 (01 1990)CrossRefGoogle Scholar.

10. Cox, Gary, McCubbins, Matthew, and Sullivan, Terry, “Policy Choice as an Electoral Investment,” Social Choice and Welfare 1 (10 1984), pp. 231–34CrossRefGoogle Scholar.

11. Bates, Robert, Markets and States in Tropical Africa (Berkeley: University of California Press, 1981)Google Scholar.

12. See, for example, Olson, Mancur, The Rise and Decline of Nations (New Haven, Conn.: Yale University Press, 1982)Google Scholar.

13. Calmfors, Lars and Driffill, John, “Bargaining Structure, Corporatism, and Macroeconomic Performance,” Economic Policy 3 (10 1988), pp. 13–61CrossRefGoogle Scholar.

14. Barro, Robert, “The Control of Politicians: An Economic Model,” Public Choice 14 (Spring 1973), pp. 19–42CrossRefGoogle Scholar.

15. On Japan, see Frances Rosenbluth, “Internationalization and Electoral Politics in Japan,” in Keohane and Milner, Internationalization and Domestic Politics.

16. George Tsebelis, “Decision Making in Political Systems,” British Journal of Political Science, forthcoming.

17. Lijphart, Arend, Democracies (New Haven, Conn.: Yale University Press, 1984)CrossRefGoogle Scholar.

18. Moe, Terry M., “The Politics of Structural Choice: Toward a Theory of Public Bureaucracy,” in Williamson, Oliver, ed., Organization Theory: From Chester Barnard to the Present and Beyond (New York: Oxford University Press, 1990)Google Scholar.

19. Scharpf, Fritz, Crisis and Choice in European Social Democracy (Ithaca, N.Y.: Cornell University Press, 1991)Google Scholar.

20. In this article, we do not explore collective attempts among governments to change the structure of the international economy, which has been the subject of much scholarly attention in the past decade. See, for example, Keohane, Robert O., After Hegemony (Princeton, N. J.: Princeton University Press, 1984)Google Scholar; and Krasner, Stephen D., ed., International Regimes (Ithaca, N.Y.: Cornell University Press, 1983)Google Scholar.

21. This assumption is tenable for all modern economies with the possible exceptions of those of Japan and the United States. Some domestic producers may have marginal price advantages over international competitors due to location, local knowledge and networks, and the like. In general, however, the price-taker assumption is appropriate.

22. Less-competitive producers in the tradables sector may, of course, be sheltered from international competition by protectionist barriers. Nonetheless, their welfare is still ultimately constrained by their ability to compete in global markets.

23. What is and what is not tradable is difficult to determine precisely. The specific composition of these sectors, however, is not relevant to our analysis. We are concerned only with the mediating effects of institutions on a given economy, rather than with its specific makeup.

24. Shonfield, Andrew, Modern Capitalism (New York: Oxford University Press, 1965)Google Scholar.

25. See O'Donnell, Guillermo, Bureaucratic Authoritarianism (Berkeley: University of California Press, 1974)Google Scholar; Haggard, Stephan, Pathways from the Periphery (Ithaca, N.Y.: Cornell University Press, 1990)Google Scholar; and Soskice, David, “Wage Determination: The Changing Role of Institutions in Advanced Industrialized Countries,” Oxford Review of Economic Policy, 6 (Winter 1990), pp. 36–61CrossRefGoogle Scholar.

26. For detailed analyses of these variables, see Golden, Miriam and Wallerstein, Michael, “Trade Union Organization and Industrial Relations in the Postwar Era in Sixteen Nations,” paper presented at the annual meeting of the American Political Science Association, New York, 1–4 09 1994Google Scholar.

27. Calmfors and Driffill, “Bargaining Structure, Corporatism, and Macroeconomic Performance.”

28. Garrett, Geoffrey and Way, Christopher, “The Sectoral Composition of Trade Unions, Corporatism, and Economic Performance,” in Eichengreen, Barry, Frieden, Jeffry, and Hagen, Jiirgen von, eds., The Political Economy of European Integration (New York: Springer-Verlag, forthcoming)Google Scholar.

29. On Britain and Italy, see Gourevitch, Peter et al. , Unions and Economic Crisis (New York: Allen and Unwin, 1984)Google Scholar; and Lange, Peter, Ross, George, and Vanicelli, Maurizio, Unions, Change, and Crisis (New York: Allen and Unwin, 1982)Google Scholar. On Denmark and Sweden, see Torben Iversen, “Power, Flexibility, and the Breakdown of Centralized Wage Bargaining,” Comparative Politics (forthcoming).

30. For detailed analyses of this wage-setting regime, see Flanagan, Robert, Soskice, David, and Ulman, Lloyd, Unionism, Economic Stabilization, and Incomes Policies (Washington, D.C.: Brookings Institution, 1983)Google Scholar.

31. For analyses of corporatist political economies that emphasize the importance of reconciling competitiveness pressures with compensatory needs, see Garrett, Geoffrey and Lange, Peter, “Political Response to Interdependence: What's Left for the Left?” International Organization 45 (Autumn 1991), pp. 539–64CrossRefGoogle Scholar; and Katzenstein, Peter, Small States in World Markets (Ithaca, N.Y.: Cornell University Press, 1985)Google Scholar.

32. The seminal analysis on the relationship between votes and representation remains Rae, Douglas, The Political Consequences of Electoral Laws (New Haven, Conn.: Yale University Press, 1971)Google Scholar.

33. For an excellent analysis of the implications of the geographic distribution of votes for electoral outcomes, see Gudgin, Graham and Taylor, Peter, Seats, Votes, and the Spatial Organization of Elections (London: Pion Press, 1976)Google Scholar.

34. See Weaver, R. Kent and Rockman, Bert A., eds., Do Institutions Matter? Government Capabilities in the United States and Abroad (Washington, D.C.: Brookings Institution, 1993)Google Scholar; and Shugart, Matthew and Carey, John M., Presidents and Assemblies: Constitutional Design and Electoral Dynamics (New York: Cambridge University Press, 1992)CrossRefGoogle Scholar.

35. Tsebelis, “Decision Making in Political Systems.”

36. Evans, Peter, Reuschemeyer, Dieter, and Skocpol, Theda, eds., Bringing the State Back In (New York: Cambridge University Press, 1985)CrossRefGoogle Scholar.

37. For the state of the art on central bank independence—in terms both of theory and empirical testing—see Cukierman, Alex, Central Bank Strategy, Credibility and Independence (Cambridge, Mass.: MIT Press, 1992)Google Scholar.

38. Franzese, Robert, “Central Banks and the Wage Bargain,” manuscript, Department of Government, Harvard University, Cambridge, Mass., 1995Google Scholar.

39. Under different institutions, this tension could be mitigated. For example, the existence of strong and centralized trade unions renders the KWS compatible with good economic performance, even in our open economy at. See our earlier discussion and Iversen, Torben, “Contested Economic Institutions: The Politics of Macro-economics and Wage Bargaining in Organized Capitalism,” Ph.D. diss., Department of Political Science, Duke University, 1995Google Scholar.

40. Garrett, Geoffrey, “The Politics of Structural Change,” Comparative Political Studies 25 (01 1993), pp. 521–47CrossRefGoogle Scholar.

41. Norpoth, Helmut, Confidence Regained (Ann Arbor: University of Michigan Press, 1992)CrossRefGoogle Scholar.

42. Wade, Robert, Governing the Market: Economic Theory and the Role of the Government in East Asian Industrialization (Princeton, N.J.: Princeton University Press, 1990)Google Scholar.

43. See Franzese, “Central Banks and the Wage Bargain”; and Hall, Peter, “Central Bank Independence and Coordinated Wage Bargaining,” German Politics and Society 31 (Spring 1994), pp. 1–23Google Scholar.