Kathleen Thelen Varieties of Liberalization and the New Politics of Social Solidarity

Comparative political economy is often based on the premise that the latter is true. In particular, the now classic Varieties of Capitalism (VofC) comparative approach postulates two types of institutional frameworks. The general idea was that each institutional solution generates positive externalities which may or may not be captured by specific solutions in other institutional domains. Therefore, the precondition for economic success of any given country is not any single institutional solution, but rather a consistent approach throughout the political economy cutting through finance, labor markets, education, inter-firm relations etc. The analysis of developed countries revealed two principal types of such institutional consistency – the coordinated market economy (CME) as a more restrictively regulated variety of capitalism and the liberal market economy (LME) as a more flexible variety oriented towards free markets.