Political Economy 3040

Comparative and International Political Economy

Professor: Douglas Nelson

Office: Tilton 108 (Murphy Institute), Phone: 865-5317

Office Hours: Monday and Wednesday, 3:30-5:30

Phone: 865-5317

email: dnelson@tulane.edu

Webpage: http://www.tulane.edu/~dnelson/

Virtually all contemporary economies are characterized by extensive relations between the economic and political systems. All of the modern (post-) industrial political economies are capitalist democracies and (with appropriate adjustments for the European Union) they are all organized as nation states. In addition to these key building blocks, they are also characterized by extensive welfare states, relatively organized labor markets, and governments that take an active role in the management of the macroeconomy. It has been argued that these last three institutions play an essential role in supporting the first three. Furthermore, it has been argued that trends in globalization and post-modernization fatally undermining the second set of institutions. In this course, we examine these relationships and their dynamics.

PECN 304 is one of the core courses in the political economy major. I will assume that you have had exposure to economic analysis at least at a level consistent with principles of microeconomics and macroeconomics. I will also assume that you are comfortable with algebra and geometry. Some of the readings and some of the lectures may make use of somewhat more advanced mathematics. I will not expect you to be able to reproduce such analysis on an exam, however I will expect you to make a good faith effort to understand what is being argued and to be able to express informally what the basic argument is, and how it fits into the broader goals of the course.

Course objectives:


■This course introduces students to the comparative analysis of the interaction between economics and politics with particular application to the relatively wealthy, industrial/post-industrial countries.


■Students should be able to apply a variety of modern theoretical and empirical approaches to the analysis of core issues in the political economy of such countries. Specifically, students should understand that different countries seek solve problems related to macroeconomic management, employment, delivery of welfare in response to changes in the economic, political, technological and social environments. That they solve similar problems in quite distinctive ways, while remaining capitalist democracies.


■Students should be able to identify core controversies in the analysis of these issues and should develop theoretical frameworks, historical and quantitative data sufficient to support making well-grounded evaluations of those controversies.

Readings for the course will be drawn from:


Herbert Kitschelt, Peter Lange, Gary Marks, and John Stephens, eds. (1999). Continuity and Change in Contemporary Capitalism. Cambridge: Cambridge University Press. [KLMS]


Torben Iversen (2005). Capitalism, Democracy and Welfare. Cambridge: Cambridge University Press. [Iversen]


Jonas Pontusson (2005). Inequality and Prosperity: Social Europe vs. Liberal America. Itahac: Cornell University Press. [Pontusson]

In addition to the above items, there are several additional articles that are available online, either directly or on electronic reserve.

There is a substantial amount of reading, and everyone is responsible for completing the reading in a timely fashion (i.e. prior to it’s discussion in class). Do not try putting the reading off until just before class. The assigned readings create a foundation on which the lectures will build. The readings are not a substitute for the lectures, nor are the lectures a substitute for the assigned readings. You will be responsible for all readings and all lecture material on exams.

This course is primarily a lecture class. However, your understanding of both the assigned readings and the lectures will be enhanced through active participation in class discussion. Asking questions in class is a good way to clarify issues that were unclear in the assigned readings and/or in the lecture.

Evaluation: Your performance in this course will be evaluated on the basis of 2 examinations (worth points 100 each); and 3 reaction papers (worth 100 total points). To earn an A, you must earn at least 90 percent of the points available. To pass the course you must earn at least 60 percent of the points available. Grades between these limits will be determined on the basis of your performance relative to that of the class as a whole.

Examination format. Both exams will have the following format: about 40% short answer questions and about 60% essays. The short answer questions seek to identify mastery of detailed knowledge of core concepts. The essay questions ask you to develop a coherent argument requiring you to deploy analytical techniques and specific knowledge developed in the course. In general there will be more questions of both types than must be answered, so you will have some choice (though there is often one mandatory question which everyone must answer). Exams will be written in blue books, which you must supply.

Policy on examinations. The midterm exam will be given in class on 11 March. Unless you have a standard university accepted excuse for missing the exam (e.g. health with standard university form), you must take the exams at their scheduled time. The final examination will only be given on the scheduled date: Thursday, 8 May, 1:00-5:00 (there will be no exceptions so do not make travel plans that conflict with this).

Reaction papers. The course is divided into three main topics (see syllabus). Every student must write a reaction paper on one subtopic (i.e. the readings for one week) in each of the three main topics. A reaction paper is a short paper discussing some aspect of the relevant reading, it is not a book report. In the reaction paper you must explicitly discuss the relevant reading and evaluate some central aspect of its discussion. Note: “evaluate” means that you must identify some central aspect of the books analysis, explain why you think this aspect is interesting/important, and present your evaluation of the author’s position (note that you must make an argument, simply asserting your agreement or disagreement will not be sufficient for a passing grade). The reaction papers are due in class on the first date scheduled for discussion of the readings (see syllabus), late papers will not be accepted and will earn a grade of zero.

Honor code: All students are responsible for knowing and adhering to Tulane University’s Honor Code, available at http://www.tulane.edu/~jruscher/dept/Honor.Code.html .

SACS-Related Material

I am aware that Tulane students are able to read a standard university syllabus and determine the content of the course and its relation to the major and the individual student’s course of study. However, the administration of Tulane University, along with the Southern Association of Colleges and Schools (SACS–which “accredits” primary and secondary schools as well as all varieties of 2 and 4 year undergraduate programs [with very little in the way of adjustment in rubrics, metrics, etc.]), has determined that you require additional information. I collect this material in a separate section so that you can refer to it, or discard it, as you consider appropriate.

STUDENT OBJECTIVES/OUTCOMES: By the end of the course, the student should be able to think, speak, and write fluently and competently about the ideas and issues covered in the course (as reflected in the course description and the syllabus). The student should have a solid understanding of the social, political, economic, and philosophical significance of ideas and concepts in the analysis of modern democratic, capitalist political economies and they should be familiar with major ideas and theories regarding explanations, interpretations, applications, and criticisms of work on democratic, capitalist political economies. The student should be able to formulate critical views concerning these issues and respond fluently and competently to questions concerning these views.

1. Students will be able to identify and recognize major themes, ideas, and concepts.

2. Students will analyze, interpret, and discuss these ideas in a scholarly and coherent manner.

3. Students will construct, formulate, and develop creative and critical scholarly assessments.

4. Students will appraise, evaluate, and appreciate the values and consequences of these ideas.

PECN 3040                                    SYLLABUS                                   Spring 2014


● 1/14, Course Introduction: Globalization and Comparative PE

Topic I. The Modern Political Economy: industrial capitalism, nation state, and liberal democracy


● 1/16, The Modern (Nation) State


■ Held (1995). “The Development of the Modern State”. In S. Hall and B. Gieben, Modernity: An Introduction to Modern Societies. Cambridge: Polity Press, pp. 55-89. [Blackboard]

■ Mann (1988). “The Autonomous Power of the State: Its Origins, Mechanisms and Results”. In States, War, and Capitalism. Oxford: Blackwell, pp. 109-136.


● 1/21, Modern Capitalism: Disembedding the Market


■ Collins (1980). “Weber’s Last Theory of Capitalism: A Systematization”. American Sociological Review; V.45-#6, pp. 925-942.

■ Greif (2008). “Commitment, Coercion and Markets: The Nature and Dynamics of Institutions Supporting Exchange”. In Ménard and Shirley (Eds.). Handbook of New Institutional Economics. Berlin: Springer-Verlag, pp. 727-747.


● 1/23, Capitalism and Democracy


■ Polanyi (1944). “Man, Nature, and Productive Organization”. Chapter 11 of The Great Transformation. Boston: Beacon Press, pp. 130-134. [Blackboard]

■ Huber, Rueschemeyer, and Stephens (2003). “The Impact of Economic Development on Democracy”. Journal of Economic Perspectives; V.7-#3, pp. 71-86.

■ Iversen (2006). “Capitalism and Democracy”. Chapter 33 in B. Weingast and D. Wittman, eds. Oxford Handbook of Political Economy. New York: Oxford University Press, pp. 601-623.

○ Greif (2008). “Commitment, Coercion and Markets: The Nature and Dynamics of Institutions Supporting Exchange”. In Ménard and Shirley (Eds.). Handbook of New Institutional Economics. Berlin: Springer-Verlag, pp. 747-785.

○ Przeworski and Limongi (1997). “Modernization: Theories and Facts”. World Politics; V.49-#1, pp. 155-183.

○ Boix and Stokes (2003). “Endogenous Democratization”. World Politics; V.55-#4, pp. 517-549.


● 1/28-1/30, The Golden Age of Embedded Liberalism


■Shonfield (1965). “The Argument in Brief”. Chapter IV in Modern Capitalism. London: Oxford University Press, pp. 61-67. [Blackboard]

■ Eichengreen, Chapters 1 & 2

■ Pontusson, Chapter 1

Topic II. National Variants of Democratic Capitalism


● 2/4-2/11, Frameworks for Analysis


■ Soskice, Chapter 4 in KLMS

■ Pontusson, Chapter 2

■ Iversen, Chapters 1 & 2


● 2/13, Corporate Governance: Law and Economics


■ Allen, Franklin and Douglas Gale (2000). “Corporate Governance and Competition,” in X. Vives ed Corporate Governance. Cambridge: Cambridge University Press, 23-84.

■ La Porta, Rafael; Florencio Lopez-de-Silanes and Andrei Shleifer. (1999). “Corporate Ownership around the World.” Journal of Finance, V.54-#2, 471-517.

■ Hansmann, Henry and Reinier Kraakman. (2001). “The End of History for Corporate Law.” Georgetown Law Journal, V.89-#2, 439-68.

○ Milhaupt, Curtis J. and Katharina Pistor (2008). Law and Capitalism: What Corporate Crises Reveal About Legal Systems and Economic Development around the World. Chicago: University of Chicago Press.


● 2/18-2/20, Corporate Governance: Political Economy


■ Gourevitch, Peter (2003). “The politics of corporate governance regulation”. Yale Law Journal, V.112-#7, pp. 1829-1880.

■ Raghuram Rajan and Luigi Zingales (2003). “The Great Reversals: The Politics of Financial Development in the Twentieth Century”. Journal of Financial Economics; V.69-#1, pp. 5-50.

■ Roe, Mark J. (2006). “Legal Origins, Politics, and Modern Stock Markets.” Harvard Law Review, V.120-#2, 460-527.


●2/25-2/27, Labor Markets and Income Distribution


■ Pontusson, Chapters 3, 4 & 6

■ Freeman and Medoff (1979). “The Two Faces of Unionism”. Public Interest; #57, pp. 69-93.

■ Nickell, Nunziata and Ochel (2004). “Unemployment in the OECD Since the 1960s. What Do We Know?”. Economic Journal; V.115-#500, pp. 1-27.

○ Calmfors and Driffill (1988). “Bargaining Structure, Corporatism and Economic Performance”. Economic Policy; #6, pp. 14-61.

○ Golden, Wallerstein & Lange in KLMS

○ Baccaro and Diego Rei (2007). “Institutional Determinants of Unemployment in OECD Countries: Does the Deregulatory View Hold Water?”. International Organization; V.61-#3, pp. 527-569.

Tulane Mardi Gras Break 2-9 March

Midterm Exam, 3/11


● 3/14-3/18, Macroeconomic Policy


■ Blinder (1987). Chapters 2 & 3 from Hard Heads, Soft Hearts: Tough-Minded Economics for a Just Society. Reading: Addison-Wesley, pp. 32-108. [ERes]

■ Iversen and Soskice (2006). “New Macroeconomics and Political Science”. Annual Review of Political Science, V.9, pp. 429-453.

■ Pontusson, Chapter 5


●3/20-3/25, Redistributive Policy


■ Pontusson, Chapter 7

■ Iversen, Chapters 3 & 4

○ Bradley, Huber, Moller, Nielsen, and Stephens (2003). “Distribution and Redistribution in Post-Industrial Democracies”. World Politics; V.55-#2, pp. 193-228.

○ Iversen and Soskice (2006). “Electoral Institutions and the Politics of Coalitions: Why Some Democracies Redistribute More than Others”. American Political Science Review;. V.11-#2, pp. 165-181.


● 3/27-4/1, Social Risk and Redistribution


■ Rodrik (1998). “Why Do More Open Economies Have Bigger Governments?Journal of Political Economy; V.106-#5, pp. 997-1032.

■ Iversen, Chapter 5

Journal of Labor History (2006). “Symposium on Iversen's Capitalism, Democracy and Welfare. Journal of Labor History; V.47-#3, pp. 397-449. (optional)

Topic III. Globalization, Post-Modernization and Transformation


● 4/3, Globalization and Keynesian Macroeconomic Policy?


Simmons, in KLMS

Obstfeld (1998). “The Global Capital Market: Benefactor or Menace?”. Journal of Economic Perspectives; V.12-#4, pp. 9-30.

Garrett (1998). “Global Markets and National Politics: Collision Course or Virtuous Circle?”. International Organization; V.52-#4, pp. 787-824.


● 4/8, Globalization and Fiscal Policy


Steinmo (1994). “The End of Redistribution? International Pressures and Domestic Tax Policy Choices”. Challenge; V.37-#6, pp. 9-18.

■ Garrett (2001). “Globalization and Government Spending Around the World”. Studies in Comparative International Development; V.35-#4, pp. 3-29.

■ Hays (2003). “Globalization and Capital Taxation in Consensus and Majoritarian Democracies.” World Politics, V.56-#1, 79-113.

○ Stewart and Webb (2006). “International Competition in Corporate Taxation: Evidence from the OECD Time Series”. Economic Policy; V.21-#45, pp. 153-201.

○ Walter (2010). “Globalization and the Welfare State: Testing the Microfoundations of the Compensation Hypothesis”. International Studies Quarterly, V.54-#2, pp. 403-26.


● 4/10, Post Modern Political Economy


■ Esping-Andersen, in KLMS

■ Kriesi, in KLMS

○ Iversen and Cusak (2000). “The Causes of Welfare State Expansion: Deindustrialization or Globalization”. World Politics; V.52-#3, pp. 313-349.


● 4/15, Gender in the Post-Modern Political Economy


■ Klausen, in KLMS

■ Estevez-Abe (2006). “Gendering the Varieties of Capitalism: A Study of Occupational Segregation by Sex in Advanced Industrial Societies”. World Politics; V.59-#1, pp. 142-175.

■ Iversen and Rosenbluth (2006). “The Political Economy of Gender: Explaining Cross-National Variation in the Gender Division of Labor and the Gender Voting Gap”. American Journal of Political Science; V.50-#1, pp. 1-19.

○ Huber and Stephens (2000). “Partisan Governance, Women’s Employment and the Social Democratic Welfare State”. American Sociological Review; V.65-#3, pp. 323-342.


● 4/17, Globalization and National Politics: Organization


Kitschelt, in KLMS

■ Kersbergen, in KLMS

■ King and Wood, in KLMS


● 4/22, Retrenchment/Convergence


■ Pontusson, Chapter 8

■ Iversen, Chapter 6

○ Hicks, Alexander and C. Zorn (2005). “Economic Globalization, the Macroeconomy, and Reversals of Welfare Expansion in Affluent Democracies, 1978-1994”. International Organization; V.59-#3, pp. 631-662. Optional [errata: http://www.sociology.emory.edu/ahicks/IOErrataAndRevisions.pdf ]


● 4/24-4/29, Retrenchment: The Social and Christian Democratic Cases


■ Huber and Stephens (2002). “Globalisation, Competitiveness, and the Social Democratic Model”. Social Policy and Society; V.1-#1, pp. 47-57.

■ Steinmo (2003). “Bucking the Trend: Swedish Social Democracy in a Global Economy”. New Political Economy, V.8-#1, pp. 31- 48.

■ Streeck and Trampusch (2006). “Economic Reform and the Political Economy of the German Welfare State”. in Dyson and Padgett (eds.). The Politics of Economic Reform in Germany. London und New York: Routledge. pp. 60-81.

○ Moene and Wallerstein in KLMS

○ Ponstusson and Swenson (1996). “Labor Markets, Production Strategies and Wage-bargaining Institutions: The Swedish Employer Offensive in Comparative Perspective”. Comparative Political Studies; V.29-#2, pp. 223-250. [Revised version in Iversen, Pontusson and Soskice, eds., Unions, Employers and Central banks, 75-106.]

Final Exam: Thursday, 8 May, 1:00-5:00am