National Diversity and Global Capitalism

The main question posed in this excellent edited volume is whether globalization results in convergence in national economic policies, institutions, and outcomes. The editors have selected an outstanding group of scholars to focus on this theme. The answer Suzanne Berger provides in the introduction is that "the space for political vision and choice -- and for a diversity of choices -- is open and wide." [p. 25] Berger and Dore get to this conclusion by asking the authors of the various chapters to consider the evidence for convergence either in the system as a whole or in specific countries.The chapter written by Robert Boyer of CEPREMAP in Paris provides an excellent introduction to the approach of the "regulation school" to international political economy. Boyer also analyses data on macroeconomic variables at the level of the nation-state to show that there is rather little evidence of a trend toward convergence, especially in levels of productivity and standards of living. Boyer argues that there is still plenty of room for national governments to pursue different policies and to maintain distinctive institutions. He contrasts the attractive simplicity of the idea of convergence with the complexity that results from the progressive segmentation of industrial markets and the parallel evolution of different national systems to occupy different market niches.The chapter by Robert Wade deals with ways of measuring economic globalization. Like Boyer, Wade uses empirical evidence to argue that globalization is limited and incomplete and that many observers have exaggerated its extent. Wade argues that the world economy is more international than global. He points out that more than eighty percent of the production and investment by multinational firms is in their home countries and that they are "rooted in national home bases with national regulatory regimes." [p. 61] Wade ends by urging caution in generalizing about the extent of globalization.The chapter by Andrea Boltho deals with the question of whether France has become more like Germany since 1958. Boltho concludes that there has been only limited copying of German institutions in France and therefore only limited convergence in economic performance. Still, there is some evidence of movement toward convergence.W. Carl Kester's chapter is, for me, the most interesting in the volume. Kester compares and contrasts U.S. and Japanese systems of governance for economic institutions. According to Kester, U.S. business governance is overwhelmingly oriented toward solving principle-agent problems, and particularly the problem of getting the managers of firms to work in the long-term interests of the firms' shareholders. Japanese business governance, in contrast, focuses on reducing transaction costs by creating incentives for cross-firm collaboration and by insulating Japanese managers from the demands of corporate shareholders.Each system has advantages and disadvantages with respect