IV Emerging Capitalisms and Paths of Institutional Reforms in Developing Countries

Emerging Capitalisms and Institutional Reforms in Developing Countries

Eric Rougier and Francois Combarnous

Key Points

This book is about clusters of institutions and economic systems. It proposes an original typology of capitalist varieties for those countries whose capitalist nature has seldom benefited from much analysis so far: poor and emerging developing countries. Typologies are sometimes criticized as being based on a limited number of features that then tend to be generalized across national cases. The typologies of mature capitalisms, carefully elaborated in an extensive literature, can, however, scarcely be criticized as over-generalizations (Jackson and Deeg 2006). As for developing economies, they exhibit capitalist features that are likely to be fairly different from the well identified ones that have been shown for the mature country systems. Researchers, therefore, have to face both

E. Rougier • F. Combarnous (*)

GREThA, CNRS Research Unit, PESSAC CEDEX, France © The Author(s) 2017

E. Rougier, F. Combarnous (eds.), The Diversity of Emerging Capitalisms in Developing Countries, DOI 10.1007/978-3-319-49947-5_14

complex and highly “exotic” institutional systems, with very few tools adapted to analyse them.

A typological approach certainly constitutes a useful approach for identifying and comparing developing country capitalisms, for the simple reason that, so far, there have been very few proposed elaborations. The absence of firmly-based typologies of developing countries’ capitalisms does not mean that those typologies cannot be found. Neither does it mean that such typologies would not be useful if they could be elaborated. We believe, on the contrary, that a typological approach provides researchers with a holistic framework that is capable of tackling expected high cross-country heterogeneity. Addressing the likely “exotic” nature of developing countries’ institutional systems, that is, their possible singularity with respect to the models describing mature capitalist systems, means adopting an agnostic approach. In other words, since ideal-types of emerging capitalisms cannot be a priori derived from existing models or from more formal theoretical elaborations, they should be inferred from a systematic analysis of the sectoral institutional data to be observed for a sufficiently broad sample of developing countries. In order to reconcile the typological approach, commonly used by comparative capitalism (CC), with the rigorous statistical analysis of observed institutional forms and clusters, advocated by the new institutional economics (NIE), the present book has, therefore, adopted an original methodology. We have first addressed the extreme diversity of developing countries’ institutional systems, and then reduced this diversity by clustering our countries into a limited set of models, understood as ideal-types.

Our statistical approach has, accordingly, enabled the diversity of institutional configurations across countries to be assessed and subsequently crystallized. It has also generated various innovative results concerning the varieties of institutional system to be observed in emerging and developing countries. Since the effects of institutions on economic development tend to cluster (Besley and Persson 2011), our core assumption has been that this needs analysing at system level, which involved the mobilizing of several dimensions of institutional governance: agriculture, education, environment, finance, product market, labour and social protection. Our approach, by thus departing from the NIE empirical logic, with its use of one-dimensional scalars to represent the whole socioeconomic system, offers an alternative contribution to the widespread literature on the institutional dimension of economic development.

At this point, we are now able to address the main questions raised in the Introduction. How can we empirically analyse developing countries’ systems of socioeconomic governance? What types of institutional complementarities are revealed by this analysis? Are there sufficiently marked, homogeneous and consistent clusters of countries to enable various models of capitalism across developing and emerging countries to be differentiated? These questions are addressed in the next two sections (Sects. 14.2 and 14.3). We then proceed to highlight two key aspects of the crosscountry institutional discrepancies that emerge in Sect. 14.4. The first of these concerns the type of state intervention in socioeconomic governance; the second aspect refers to the role played by experimentation in shaping this type of socioeconomic governance. The policy implications of our results are then addressed in Sect. 14.5, with special focus being put on institutional reforms in poor countries. Finally, new horizons for research are suggested in Sect. 14.6.

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