The Politics of Adjustment and Coordination at the Regional Level: The Basque Country

Is globalization forcing economies that are not coordinated market economies, such as Spain's, to converge on a British-American model? This essay seeks to build on the hypotheses generated by the literature on varieties of capitalism to analyze the challenges of developing and sustaining coordination while adjusting for economic change. In particular, it seeks to explore ways in which subnational factors promote the ability of socioeconomic actors to develop public-private institutions. By focusing on a particular autonomous region of Spain, the Basque Country, this article explores the role of institutional arrangements at the regional level in determining national adjustment. In the Basque Country the relative power and the particular interests of the regional state have been central factors in promoting distinctive patterns of coordination. At the same time, actors' preferences and policy outcomes have been constrained by the differences in the quality and configuration of institutional frameworks, political deals, and the existing economic structure.