Abstract
Modern democracy and democratic welfare states find it very difficult to achieve an acceptable balance between the conflicting demands of political equality and market efficiency.
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M. Schmidt, ‘Does corporatism matter?: Economic crisis, politics, and the rate of unemployment in capitalist democracies in the 1970s’ in G. Lehmbruch and P. Schmitter (eds), Trends Toward Comparative Policymaking (California, Beverly Hills: Sage Publication, 1982; M. Casson (ed.), The Growth of International Business (London: Allen & Unwin, 1983) and J. H. Goldthorpe ‘Problems of political economy in the Postwar Period’ in Changing Boundaries of the Political, ed. Ch. S. Maicr (New York: Cambridge University Press, 1987), pp. 363–408. This observation is also true for other regimes that deviate substantially from free competition by managing their economies, such as the New Tigers of South-East Asia.
See, for example, Robert Wade, Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization (Princeton, NJ: Princeton University Press, 1990);
R. Appelbaum and J. Henderson, States and Development in the Asian Pacific Rim (Newbury Park, CA: Sage, 1992) and
Michael Gerlach, Alliance Capitalism: The Social Organization of Japanese Business (Berkeley: University of California Press, 1993).
See a conceptual overview in M. Granovetter, ‘Economic action and social structure: “The problem of embeddedness”’, American Journal of Sociology, 91, 1985, 481–510.
S. Brittan, ‘The economic consequences of democracy’, British Journal of Political Sciences, 5, 129–159; J. Habermas, Legitimation Crisis (Boston: Beacon Press, 1976),
N. Vig and S. Schier (eds), Political Economy of Western Democracies (New York and London: Holmes and Meier, 1985).
F. A. Hayek, The Constitution of Liberty (London: Macmillan, 1960); Habermas, op. cit.
Prominent examples are: C. Lindblom, Politics and Markets: The World–s Political-Economic Systems (New York: Basic Books, 1977);
M. Olson, The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities (New Haven: Yale University Press, 1982); and
R. Dahl, A Preface to Economic Democracy (Berkeley, California: University of California Press, 1985).
For a formulation of a Marxist’s version of this contradiction see C. Offe, Contradictions of the Welfare State (London: Routledge & Kegan Paul, 1985).
I. Wallerstein, The Modern World System (New York: Academic Press, 1974).
P. Knox and J. Agnew, The Geography of the World Economy (London: Arnold, 1994).
S. Gill and D. Law, The Global Political Economy: Perspectives, Problems, and Policies (New York and London: Harvester/Wheatsheaf, 1989), tables 12.1–12.4.
The term ‘organized’ denotes that the structure of business firms, the institutional arrangements between corporations, and the political regulation of markets were organized in a predictable, stable, and manageable fashion. In ‘organized capitalism’, the market structure facilitates state organized action, producers’ coordination, cooperation, and ‘managed competition’. The term used by S. Lash and J. Urry, The End of Organized Capitalism (Oxford: Polity Press, 1987);
C. Offe ‘Challenging the boundaries of institutional politics: Social movements since 1960s’ in Changing Boundaries of the Political ed. Ch. S. Maier (New York: Cambridge University Press, 1987), pp. 63–106; and
C. Pierson Beyond the Welfare State? (Cambridge: Polity Press, 1992).
R. Ross, ‘The relative decline of relative autonomy: Global capitalism and the political economy of state change’ in Changes in the State: Causes and Consequences, (eds) E. Greenberg and T. F. Mayer (Newbury Park: Sage Publications, 1990), pp. 206;
M. S. Mizruchi, The Structure of Corporate Political Action (Cambridge: Harvard University Press, 1992).
Lash and Urry, op. cit.; Pierson, op. cit.; R. J. Johnston, ‘The rise and decline of the corporatist-welfare state: A comparative analysis in global context’, in Political Geography of the Twentieth Century: A Global Analysis, ed. P. J. Taylor (London: Belhaven Press, 1993), pp. 31–62.
The term was coined by John Ruggie in his ‘International regimes, transactions, and change’, International Organization, 36, 1988, 379–415.
J. Henderson and R. P. Appelbaum, ‘Introduction’, in R. P. Appelbaum and J. Henderson (eds), States and Development in the Asian Pacific Rim (Newbury Park: Sage Publications, 1992), pp. 1–26; Knox and Agnew, op. cit.
U. Himmelstrand, G. Ahrne, L. Lundberg and L. Lundberg, Beyond Welfare Capitalism (London: Heineman, 1981), ch. 7; Wade, op. cit., pp. 44–9.
Habermas, op. cit.; F. Block, ‘The fiscal crisis of the capitalist state’, Annual Review of Sociology, 7, 1981, 1–27; Offe, op. cit;
B. Jessop, ‘The welfare state in the transition from Fordism to post-Fordism’ in The Politics of Flexibility, eds B. Jessop, H. Kastendiek, K. Nielsen and O. Pederson, (Aldershot: Edward Elgar, 1994), pp. 82–105.
According to Steven Lukes’ well-argued essay, equity and inequality do not necessarily contradict (S. Lukes, ‘Equality and liberty: Must they conflict?’ in Political Theory Today, ed. David Held (Stanford: Stanford University Press, 1991), pp. 48–66.
S. Lioukas, ‘Privatization in Greece’ in Privatization: A Global Perspective, ed V. V. Ramanadham (London and New York: Routledge, 1993), pp. 28’50.
Gosta, Esping-Andersen, Politics Against Markets: The Social-Democratic Road to Power (Princeton, NJ: Princeton University Press, 1985).
J. Markoff and V. Montecinos, ‘The irresistible rise of economists’, Journal of Public Policy, 1993; V. Montecinos and J. Markoff, ‘Democrats and technocrats: The professional economists and regime transitions in Latin America’ Canadian Journal of Development Studies, 1994; J. Ravetz, ‘Economics as an elite folk-science: The suppression of uncertainty, Journal of Post-Keyensian Economics, winter 1995. This is especially true where the economists based their advancement on non-empirical, mathematically derived formulae, and where economic analysis deals with the ideal images rather than confronting theory with real data, as demonstrated in Y. P. Yonay, ‘When black boxes clash: Competing ideas of what science is in economics, 1924–39’, Social Studies of Science, 24, 1994, 39–80.
M. Foucault, ‘Politics and the study of discourse, in The Foucault Effect: Studies in Governmentality, eds G. Burchell, C. Gordon and P. Miller, (Chicago: The University of Chicago Press, 1991), pp. 53–72;
T. Mitchell, ‘The limits of the state: Beyond statist approaches and their critics’, American Political Science Review, 85: 1, 1991, 77–96.
J. R. Pack, ‘Privatization of public-sector service in theory and practice’, Journal of Policy analysis and Management, 6: 4, (1987) 523–40; R. Hemming and A. Mansoor, ‘Is privatization the answer?’, Finance and Development, September 1988, 31–3;
R. Vernon, (ed.), The Promise of Privatization: A Challenge for American Foreign Policy (New York: Council for Foreign Relations, 1988);
M. R. Bishop and J. A. Kay ‘Privatization in the United Kingdom: Lessons from experience’, World Development, 17: 5, 1989, 643–58;
W. T. Stanbury, ‘Privatization in Canada: Ideology, symbolism or substance?’ in Privatization and State-Owned Enterprises, eds P. W. MacAvoy, W. T. Stanbury, G. Yarrow, and R. J. Zeckhauser (Boston: Kluwer Academic Press, 1989, pp. 273–9;
M. Datta-Chaudhuri ‘Market failure and government failure, Journal of Economic Perspectives, 4: 3, 1990, 25–39;
J. Vickers and G. Yarrow, ‘Economic perspectives on privatization’, Journal of Economic Perspectives, 5: 2, 1991, 111–32; J. Goodman and G. W. Loveman, ‘Does privatization serve the public interest?’, Harvard Business Review, November–December 1991, 26–38;
G. Santopietro and L. Shabman, ‘Can privatization be inefficient? The case of the Chesapeake Bay Oyster Fishery’, Journal of Economic Issues, 26: 2, 1992, 407–419.
H. C. White, Identity and Control (Princeton, NJ: Princeton University Press, 1992).
Granovetter, op. cit; R. S. Burt, Structural Holes: The Social Structure of Competition (Cambridge, MA: Harvard University Press, 1992); White, op. cit.;
I. Talmud., ‘Industry market power, industry political power, and state support: The case of Israeli industry’ in Research in Politics and Society, Vol. 4, eds G wen Moore and J. Allen Whitt (CT: J AI Press, 1992), pp. 35–62; and
I. Talmud, ‘Relations and profits: Imperfect competition and its outcomes’, Social Science Research, 23; 1994, 109–35.
Gary Hamilton and Nicole Biggard, ‘Market, culture, and authority: A comparative analysis of management and organization in the Far East’, American Journal of Sociology, 94, 1988, S52–S94;
A. Amsden, Asia’s Next Giant: South Korea and Late Industrialization (New York: Oxford University Press, 1989); Gary Hamilton, William Zeile, and Wan-Jim Kim, ‘The network structure of East-Asian economies’ in Capitalism in Contrasting Cultures (Berlin: de Gruyter, 1989); Wade, op. cit.; Appelbaum and Henderson, op. cit.
; L. Jones and Il Sakong, Government, Business and Entrepreneur ship: The Korean Case (Cambridge: Harvard University Press, 1980); Hamilton and Biggard, op. cit.; Amsden, op. cit.;
Marco Orru, Nicole Woosley Biggart and Gary G. Hamilton, ‘Organizational isomorphism in East Asia’ in The New Institutionalism in Organizational Analysis, eds Walter W. Powell and Paul J. DiMaggio (Chicago: University of Chicago Press, 1990).
P. J. Katzenstein, Small States in the World Markets: Industrial Policy in Europe, Cornell Studies in Political Economy (Ithaca: Cornell University Press, ), pp. 17–26.
D. Rueschemeyer and P. B. Evans (1986), ‘The State and economic transformation: Toward an analysis of the conditions underlying effective intervention’ in Bringing the State Back In, eds. Peter B. Evans, Dietrich Rueschemeyer and Theda Skocpol (Cambridge, MA: Cambridge University Press, 1986), p. 56.
M. Uttley and N. Harper, ‘The political economy of competitive tendering’ in The Political Economy of Privatization, eds T. Clark and C. Pitelis (London and New York: Routledge, 1993), p. 151, table 8.3.
D. Hachette, Privatization in Chile (San-Francisco: ICS Press, 1993).
W. Glade (ed.), Privatization of Public Enterprises in Latin America (San-Fancisco: ICS Press, 1991).
A. Brown, ‘Privatization in Australia’, in Privatization: A Global Perspective, ed. V. V. Ramanadham (London and New York: Routledge, 1993) pp. 470–89.
See a (biased) overview in K. Danehl, 50 Years is Enough: The Case Against the World Bank and the International Monetary Fund (Boston, South End Press, 1994).
John Maynard Keynes, The General Theory of Employment, Interest, and Money (HBJ: New York, [1935], 1964), p. 838.
See examples in M. Pine, Privatization (London: Wildwood House, 1983); and
J. D. Donahue, The Privatization Decision: Public Ends, Private Means (New York: Basic Books, 1989).
E. S. Savas, Privatization: The Key to Better Government (Chatham, NJ: Chatham House, 1987)
William Jr Poole and Philip Fixier, Jr, ‘Privatization of public-sector services in practice: Experience and potential’, Journal of Policy Analysis and Management, 6, 4, 1987, 612–25;
D. Bos, Privatization: A Theoretical Treatment (Oxford: Clarendon Press, 1991);
D. Osborne and T. Gaebler, Reinventing Government (Reading, MA: Addison-Wesley, 1992); and Ramanadham, op. cit.
Rent-seeking behaviour is defined by the prominent economist Bhagwati as a firm’s ability to squeeze profit beyond market equilibrium at the expense of efficiency by direct non-productive activity (J. Bhagwati ‘Directly unproductive, profit-seeking (DUP) activities’, Journal of Political Economy, 90, 1982, 988–1002).
An academic expression of this awareness is demonstrated in the recurrent discourse in political theory, attempting to establish a moral foundation to the relations between citizens, membership, community and collective and individual rights (compare S. Avineri and A. de-Shalit (eds), Communitarianism and Individualism (Oxford: Oxford University Press, 1992).
R. Gilpin, ‘Three models of the future’, International Organization, 29, 1975, 37–60;
R. Gibb and W. Michalak, (eds) Continental Trading Blocs (New York: John Wiley, 1994).
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Talmud, I. (1997). The Democratic State, Globalization and Privatization. In: Shain, Y., Klieman, A. (eds) Democracy: The Challenges Ahead. St Antony’s Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-25776-8_11
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