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Institutional competitiveness in the global economy: Denmark, the United States, and the varieties of capitalism

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  • John L. Campbell
  • Ove K. Pedersen

Abstract

Despite high taxes, a large welfare state, and much economic regulation, Denmark competes successfully against other advanced capitalist economies. Denmark’s success is based in large part on its institutional competitiveness – its capacity to achieve socioeconomic success as a result of the competitive advantages that firms derive from operating within a particular set of institutions. The institutional basis for successfully coordinating labor markets and vocational training programs are examined for Denmark and the US – two countries that were very different institutionally but very successful in the 1990s and in the 2000s. We show that there is no one best way to achieve success in today’s global economy, except with respect to social inequality; that the mechanisms underlying institutional competitiveness are more complex than often recognized; that institutional hybrids can be as successful as purer political economic cases; and that high taxes and state spending can enhance socioeconomic performance. As such, this paper challenges both neoliberalism and the varieties of capitalism school of comparative political economy.

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  • John L. Campbell & Ove K. Pedersen, 2007. "Institutional competitiveness in the global economy: Denmark, the United States, and the varieties of capitalism," Regulation & Governance, John Wiley & Sons, vol. 1(3), pages 230-246, September.
    • Handle: RePEc:wly:reggov:v:1:y:2007:i:3:p:230-246
    DOI: 10.1111/j.1748-5991.2007.00012.x
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    1. Hall, Peter A. & Gingerich, Daniel W., 2004. "Varieties of Capitalism and Institutional Complementarities in the Macroeconomy," MPIfG Discussion Paper 04/5, Max Planck Institute for the Study of Societies.
    2. Thelen,Kathleen, 2004. "How Institutions Evolve," Cambridge Books, Cambridge University Press, number 9780521546744, October.
    3. Edward Lorenz & Antoine Valeyre, 2004. "Organisational Change in Europe: National Models or the Diffusion of a New "One Best Way"?," DRUID Working Papers 04-04, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    4. Thelen,Kathleen, 2004. "How Institutions Evolve," Cambridge Books, Cambridge University Press, number 9780521837682, October.
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