Eric Rougier

Analysing the Capitalisms of Developing Countries: What’s the Point?

This chapter provides a general introduction to the book. It consists of a non-technical presentation of the research project and of the contents of the book. The author (Eric Rougier) insists there is a new challenge placed on scholars interested in international development, as most emerging economies have become competitive production systems in the globalized economy. These major changes call for a comprehensive analysis of the capitalist systems of those countries, and of their specificities in respect to both mature capitalist economies and poorer developing countries. The introduction also situates the contents of the book in relation to the existing literature on comparative capitalism and asks a series of important questions addressed by the book.

Institutional Complementarities, Hierarchies and Reinforcing Factors

This chapter details firstly the historical, geographical and political determinant correlates of the six different models of capitalism, and secondly, various dimensions of economic performance (income level and growth, inequality, trade specialization, and so on.). The authors (Eric Rougier and Francois Combarnous) examine whether those historical conditions have exerted an influence on the shape of current economic systems. Subsequently, the political economies of the six models are characterized by considering constitutional characteristics, democratic outcomes, and state capacities. Finally, each one of our models is characterized with respect to various economic and social outcomes in order to check if there is a form of institutional socioeconomic or political advantage.

Institutional Trajectories: Three Comparative Case Studies

The two authors (Francois Combarnous and Eric Rougier) compare the historical trajectories of three regional pairs of developing countries (Ghana–Cote d’Ivoire, Mexico–Brazil, and Malaysia–Indonesia) and describe what drove countries with fairly similar initial conditions to adopt contrasted institutional systems. The chapter shows that, in the aftermath of political (decolonization) or economic shocks (external or domestic financial crises), different domestic conditions (in terms of dominant coalitions or of the degree of democracy), together with different economic and political relationships with the former colonial power and transnational corporations, gave rise to diverging institutional trajectories. Whereas certain countries could progressively assemble polymorphic and functional systems of sectoral institutions, others failed to do so since they could only combine types of institutional governance that would appear, ex post, to be non-complementary and, therefore, dysfunctional.

Systems, Institutional Complementarities and Politics: Various Methodological Considerations

In this chapter, the two authors (Francois Combarnous and Eric Rougier) describe the empirical approach implemented throughout the different contributions of the book. The key assumption that variants of developing countries’ capitalist models can be characterized by a set of sector-related types of institutional governance is first formulated and elaborated. Then, the seven sectors to these governance sets are described and justified: labour, competition, social protection, education, and finance, standard in the comparative capitalism (CC) literature, to which agriculture and the environment have been added. Theoretical complementarities and possible trade-offs between these seven areas are then commented on, before the authors introduce the concepts of ex ante, ex post, progressive and regressive institutional complementarities in order to adapt the institutional complementarity theory to the specific context of developing countries. Ultimately, the theoretical articulation of economic and political institutions is described and the various consequences of this articulation for the analysis are drawn.

The 2 + 4 Varieties of Capitalist Systems

In this chapter, the authors (Eric Rougier and Francois Combarnous) identify and specify the six models of capitalism determined by clustering the country-specific sets of the seven types of sectoral governance detailed in the preceding chapters. The Liberal Market and Coordinated Market models are highly typical of OECD economies. In what specifically concerns developing and emerging economies, four distinctive models, the Globalization-Friendly, Resource-Dependent Statist, Informal (Weak State) and Hybrid-Idiosyncratic, have been found. One key result of the chapter is that institutional experimentation shows a strong pattern of differentiation between developing countries’ capitalisms, since transitional institutional models, that is, those that are no longer informal but not yet totally formal and OECD-style, are either non experimental (Statist Resource-Dependent or Globalization-Friendly) or experimental (Hybrid-Idiosyncratic).

Existing Typologies of Developing Countries’ Institutional Systems

In this chapter, the author (Eric Rougier) first describes the dominant vision of institutions and development tending to disregard an institutional system’s complexity by reducing it to a limited set of very general one-dimensional institutions and then explains that institutions are best analysed as systems since they tend to cluster their effects on economic outcomes. The chapter proceeds by discussing how another strand of the institutional literature, dealing with the varieties of mature capitalisms, has opened the black box of institutional systems, suggesting the promising avenues for the comparative study of the developing countries’ specific forms of capitalism followed by the book. The author ultimately overviews existing typologies of developing countries’ economic systems and questions the extent to which they are effectively based on the examination of clusters of institutions.

Product Market and Competition

In this chapter, the author (Eric Rougier) first argues that real-life competition generally consists of complex systems of legal regulations, firms’ strategies and public policies, and cannot be expressed as simple scores on a product market liberalization scale. The author then shows that types of product market governance are differentiated along two main lines: the degree of product market regulation (red tape, business climate, taxes), and the style of state interventionism, involving either traditional directive industrial and trade policies, or policies focused on Foreign Direct Investment (FDI) attraction and short-run integration into world value chains. The countries are consequently distributed into five different types: the liberalized deregulated, export-oriented, statist partially liberalized, statist protected and idiosyncratic. The chapter ends with a discussion of those models.

Emerging Capitalisms and Institutional Reforms in Developing Countries

In the final chapter, the editors (Eric Rougier and Francois Combarnous) provide their answers to the main questions raised in the book’s introduction. They then proceed to highlight two key aspects of the cross-country institutional discrepancies: the type of state intervention in socioeconomic governance and the role played by experimentation in shaping this type of socioeconomic governance. The policy implications of the book’s main results are then addressed, with special focus being put on institutional reforms in poor countries. Several policy-related proposals are then discussed, especially as regards institutional change and reforms in poor and middle-income countries: Should institutional reforms be coordinated or not? Are there successful “super-reformers” to be imitated by other countries? Is there still scope for individual experimentation? Finally, new horizons for research are suggested.