Since the last decade scientific research on capitalism has experienced a noticeably grown
attention among scholars as well as politicians. One of the most discussed approaches in this
field of comparative analysis of political economy is the ‘varieties of capitalism’ theory1
developed by Peter Hall and David Soskice. Their approach basically focuses on how
different actors may behave in a certain politico-economic state configuration and on how
far this configuration can determine a national type or variety of capitalism as well as the
economic success of a political economy.
This approach, though, has been designed with a view to the so-called ‘developed
economies’, which are to be found in Western and Central Europe as well as in North
America. In the era of globalization other economies have come into play, with their
performances ranging from real success stories, as in several Asian economies, to
considerable failure, as in most marginalized Sub-Saharan African economies.
After presenting Hall and Soskice’s approach and some of its criticisms in order to
give a conceptual framework, this paper will provide a very brief overview of the political
economy of colonialism, followed by a case-study analysis of the contemporary political
economies of Uganda and the Democratic Republic of Congo (DRC).
The main research question is to identify to which extent varieties of capitalism
imported from colonial powers have fashioned today’s economies in the chosen cases as
‘economic models’ or how far the empirically established colonial economic systems are
responsible for post-colonial developments. The former colonial power in Uganda, Great
Britain, will be considered as a Liberal Market Economy, whereas DRC’s colonial power,
Belgium, will be assigned the Coordinated Market Economies2 type. In order to avoid
analytical shortcomings, this paper also tries to take into consideration the discrepancy
between those models and the colonial reality as well as postcolonial developments, which
have evolved due to domestic characteristics or as a consequence of a globalizing political
economy.
Table of Contents
I INTRODUCTION
II VARIETIES OF CAPITALISM AND ITS CRITIQUE
II.1 THE VARIETIES OF CAPITALISM APPROACH
II.2 CRITIQUE OF THE VARIETIES OF CAPITALISM APPROACH
III SOME NOTES ON POLITICAL ECONOMY IN COLONIAL AFRICA
IV THE SITUATION IN UGANDA
IV.1 UGANDA’S POST-COLONIAL ECONOMY AT A GLANCE
IV.2 UGANDA’S VARIETY OF CAPITALISM
V THE SITUATION IN THE DEMOCRATIC REPUBLIC OF CONGO
V.1 ‘CONGO-KINSHASA’S’ POST-COLONIAL ECONOMY AT A GLANCE
V.2 DEMOCRATIC REPUBLIC OF CONGO’S VARIETY OF CAPITALISM
VI CONCLUSION
Research Objectives and Core Themes
The primary research objective is to examine to what extent the 'varieties of capitalism' framework, originally developed for developed economies, can be applied to analyze the political economies of Uganda and the Democratic Republic of Congo. The study investigates how colonial legacies and modern globalization have shaped these national economies, specifically evaluating whether they mirror established market models or require new conceptual classifications.
- The applicability of the Hall and Soskice 'varieties of capitalism' approach in non-Western contexts.
- The impact of colonial economic structures on post-colonial development in Uganda and the DRC.
- Comparative analysis of economic liberalization and market regulation in the two target countries.
- The role of neo-patrimonialism and informal power networks in shaping contemporary African political economies.
- The influence of external economic shocks and globalization on fragile state structures.
Extract from the Book
II.1 THE VARIETIES OF CAPITALISM APPROACH
The ‘varieties of capitalism approach’ of Peter Hall and David Soskice appears to be an “actor-centred” neo-institutionalist theory in the field of comparative political economy, motivated by the underlying assumption that a politico-economic system not only shaped by institutional a priori arrangements but by the involved economic actors as well. Hall and Soskice argue that firms and companies try to influence national economies with regard to their own interests.
Although the ‘varieties of capitalism approach’ emphasizes the firms’ position as “key agents of adjustment” other actors are not to be excluded from the analysis. Hence, one shall take into consideration their ability to develop technological competencies depending on whether they manage to establish relationships – “both internally, with its own employees, and externally, with a wide range of other actors”. Such actors can include business partners like suppliers, stakeholders or similar, but also financial institutions like banks or investors, governmental institutions like ministries of economy, education or implementing agencies (i.e. employment offices) and societal actors like trade unions or business associations. The overall economic performance of a firm is dependent on whether its “coordination problems”, which arise due to the firms’ specific position in the national economy, can be solved by creating functional modes of interaction and coordination with the relating actors, respectively.
For the sake of analysis, Hall and Soskice propose a set of five institutional spheres in which firms have to find coordination mechanisms. The sphere of “industrial relations” encompasses all issues of bargaining on the micro-level of a single firm as well as on the macro-level between superordinated organizations and associations. At this point coordination becomes relevant given that “wage and productivity levels” are determinants of the firm’s overall performance. Secondly, in the sphere of “vocational training and education” firms have to ensure their access to skilled workforce and in a wider framework a national economy as such has a vital interest in disposing of a skills reservoir to remain competitive on the global level.
Summary of Chapters
I INTRODUCTION: Defines the research scope regarding the application of the 'varieties of capitalism' theory to Sub-Saharan African economies like Uganda and the DRC.
II VARIETIES OF CAPITALISM AND ITS CRITIQUE: Outlines the theoretical framework of Hall and Soskice, emphasizing the role of institutions and the distinction between Liberal and Coordinated Market Economies, followed by academic critiques.
III SOME NOTES ON POLITICAL ECONOMY IN COLONIAL AFRICA: Discusses how colonial powers introduced dependent capitalist modes of production focused on extraction rather than local development.
IV THE SITUATION IN UGANDA: Analyzes the post-colonial economic history of Uganda, focusing on reforms, the informal sector, and the challenges of integrating into global markets.
V THE SITUATION IN THE DEMOCRATIC REPUBLIC OF CONGO: Examines the profound structural crises in the DRC, identifying the role of patrimonialism and conflict in the erosion of formal market institutions.
VI CONCLUSION: Synthesizes the findings, suggesting that the 'varieties of capitalism' approach requires adaptation to account for neo-patrimonial realities and exogenous shocks in Africa.
Keywords
Varieties of Capitalism, Hall and Soskice, Political Economy, Colonialism, Uganda, Democratic Republic of Congo, Liberal Market Economy, Coordinated Market Economy, Neo-patrimonialism, Globalization, Structural Adjustment, Economic Development, Institutional Complementarity, Informal Sector, Market Regulation.
Frequently Asked Questions
What is the central focus of this research?
The work examines whether the Western-centric 'varieties of capitalism' theory can effectively describe or categorize the political economies of Uganda and the Democratic Republic of Congo.
Which theoretical model does the author use?
The author primarily utilizes the 'varieties of capitalism' approach established by Peter Hall and David Soskice, which distinguishes between Liberal Market Economies (LMEs) and Coordinated Market Economies (CMEs).
What is the primary research question?
The study seeks to identify the extent to which colonial-era economic structures and contemporary globalization have fashioned the national economies of Uganda and the DRC into recognizable economic models.
Which methodology is employed in this study?
The author performs a comparative case-study analysis of Uganda and the DRC, integrating historical analysis of colonial impact with an assessment of post-colonial economic performance and institutional frameworks.
What is covered in the main body of the text?
The text covers the theoretical foundations of the 'varieties of capitalism' approach, the history of colonial economic exploitation in Africa, and detailed analyses of the contemporary economic landscapes in Uganda and the DRC.
Which keywords are essential for understanding this work?
Key terms include Varieties of Capitalism, Neo-patrimonialism, Liberal Market Economy, Colonialism, and Economic Development.
How does the author categorize the Ugandan economy?
The author argues that while Uganda shows some tendencies toward a Liberal Market Economy due to recent reforms, it remains heavily influenced by institutional weaknesses and an informal sector that defies standard classification.
Why is the 'varieties of capitalism' approach deemed potentially insufficient for the DRC?
The author suggests it is the "false approach" for the DRC because the state lacks the necessary institutional framework to function as either an LME or a CME, instead operating under neo-patrimonial logic.
What role does corruption play in the economic systems described?
The author notes that bribery and corruption on lower levels often act as a paradoxical substitute for formal social security systems in the DRC, helping families survive despite extreme state failure.
- Arbeit zitieren
- Christoph Vogel (Autor:in), 2009, Are there varieties of capitalism in African political economies?, München, GRIN Verlag, https://www.grin.com/document/181553
