Varieties of Capitalism and Cross-National Gender Differences

Introduction

The varieties of capitalism (VoC) approach (Hall and Soskice 2001, for an introduction) did not develop as an attempt to explain cross-national gender relations. It was the insight of EstÈvez-Abe that it could be used in gender analysis (EstÈvez-Abe this volume). She built on Iversen's argument that the patterns of business and individual investments in skills implied by VoC could explain complementarities between welfare state regimes and varieties of capitalism (EstÈvez-Abe et al., 2001; Iversen, 2005). These arguments are summarized shortly. This issue of Social Politics shows, at least to my reading, that VoC offers a range of important insights and tools of comparative analysis; but as Charles points out (this volume), many key characteristics of occupational segregation are common across advanced economiesóblue collar work, for example, is seldom done by women anywhere. VoC is useful then in explaining comparative differences.

In this commentary I first sketch out the VoC approach and why it implies that wage determination and skill formation systems differ substantially across economies. Using these two institutional differences, the Estévez-Abe argument is set out, the links between varieties of capitalism and welfare states are established, and a number of implications for cross-national gender differences are drawn. Finally, the relation between VoC and political systems are discussed.

Varieties of Capitalism

The VoC approach is an attempt to develop a political economic analytic framework to understand how national economies work and what degrees of freedom they may have in a global economic environment and in a world of rapid technological change. Up to the 1980s, political economists focused on the actions of the state. But globalization has progressively reduced state capacity: States can no longer impose controls on capital markets or pursue discretionary Keynesian policies; they cannot resort to protectionist measures; and their ability to control company decisions (for example, price behavior or investment) whether through industrial planning, state banking, or direct controls has been sharply limited. The problem for the state has thus become how can it help foster an infrastructure to enable companies to be competitive in the open world economy. VoC therefore focuses on the company rather than the state and asks how it solves problems relating to the supply of skills, workforce cooperation, technology transfer, access to finance and so on. For this, an understanding of the institutional framework in which companies operate is central. Here the key institutions are the education and training system, labor market regulation, the institutions of technology transfer, and the corporate governance system. Because these institutions are defined primarily at the national level, VoC has analyzed national models; this emphasis reflects an empirical fact about where institutions are located; the basic principles can carry over to regions, as in Italy, or to the Keiretsu system, as in Japan.

Within the advanced economies, two main types of institutional framework are distinguished. These correspond to two groups of economies. In liberal market economies (LMEs; primarily the Anglo-Saxon economies, also Ireland and Israel), the institutional framework consists of an educational and training system emphasizing general competences and skills, a deregulated labor market privileging unilateral management control of business, a corporate governance system geared to short-term profitability, and a competitive market in technology transfer. The group of coordinated market economies (CMEs; Northern EuropeóScandinavia, Germany, Austria, and Switzerland and Benelux, in different forms Japan and northern Italy, and in quite different form France) offer a sharp contrast in which coordinated business plays an important role in maintaining the institutional framework. In the Northern European version, the education and training system develops specific skills, whether at industry and/or company level, at lower (industry, office, or artisanal) or higher status levels (professionals, engineers, etc.), and across sectors (industry and services, though with variation in company specificity); there are effective systems of industrial relations, with coordinated wage bargaining and employee representation in companies; corporate governance arrangements allow for more patient capital; and technology transfer is strongly networked between companies, sectoral research institutes, technical universities, and polytechnics.

Northern European and Japanese capitalisms have long operated...