Jonas Pontusson : Inequality and Prosperity : Social Europe vs

Inequality and Prosperity has two aims. One is to deline-ate the ways in which affluent countries differ in their economic institutions and their labour market and social policies. The other is to use macro-comparative analysis to shed some light on the question of whether the pursuit of low inequality is compatible with a healthy economy. The book is highly successful in both respects. It will inform comparativists in political science, sociology, economics, and related fields as well as policy analysts and policy makers, and it will be an excellent choice for graduate and undergraduate courses in political economy and comparative politics. Pontusson provides a very useful overview of the key features of Nordic and continental European 'social market economies' (SMEs) and Anglo-American 'liberal market economies' (LMEs). Particularly helpful are his discussions of labour market institutions (pp. 25–28 and ch. 6) and welfare state regimes (pp. 146–153). The book also includes a nuanced but readily comprehensible description of various indicators and measures of inequality , poverty, and macroeconomic performance. The heart of the book is an empirical assessment of the degree to which low inequality does or does not impede growth of economic output and employment. The analyses are mainly bivariate, and Pontusson stresses throughout that the aim is largely to gain preliminary insight rather than present the final word on the matter. He also draws extensively on the findings of prior research. The conclusions he reaches include the following: 1. Levels of GDP per capita tend to be about equal across the two groups of countries (pp. 5–6). 2. Growth of GDP per capita tended to be higher in the SMEs in the 1960s and 1970s and similar across the two groups in the 1980s and 1990s (pp. 5, 7). It tended to be higher in countries with more generous welfare states in the 1960s and 1970s and no different in the 1980s and 1990s (pp. 167–168). 3. Unemployment rates have been similar across the two sets of countries. Four SME countries have experienced sustained high unemployment: France, Germany, Italy, and Spain (pp. 5, 9). 4. Since 1990, LMEs have tended to be more successful than SMEs at reducing unemployment (p. 71). 5. Long-term unemployment tends to be much more of a problem in continental SMEs than in the LMEs or the Nordic SMEs (pp. 71–73). 6. Employment rates tend to be highest in the Nordic SMEs, followed by the …