Extract
The new comparative economics versus the old: less is more but is it enough?
1. Introduction
It is commonly believed that the field of comparative economics entered something of a terminal crisis with the collapse of communism and the socialist economy in the late 1980s. For example, Djankov et al. (2003) write: The traditional field of comparative economics dealt mostly with the comparison of socialism and capitalism.... Traditional comparative economics.... studied under what circumstances either the plan or the market delivers greater economic efficiency.... By the time socialism collapsed in Eastern Europe and the Soviet Union, this question had lost much of its appeal.... If capitalism is triumphant, is comparative economics dead? [pp. 595-6]. (3) Djankov et al. answer their rhetorical question somewhat ambiguously. The old comparative economics, as they define it is, indeed dead, they believe, but a new comparative economics, one that involves comparisons among capitalist systems and that places primary emphasis on the role of institutions is being born. They provide a brief manifesto for this new comparative economics: ... the key comparisons are those of alternative capitalist models prevailing in different countries. Each capitalist country has many public and private institutions.... These differences (in institutions) and their consequences for economic performance are the subject of the new comparative economics. [p. 596] It can hardly be argued that the communist economy has largely disappeared as a subject of economic research, with the notable exception of China, which the advocates of the new comparative economics seem to view as a capitalist economy with a somewhat above-average level of state ownership of firms. (4) But, as I shall argue in this paper, the verdict that the old comparative economics is dead confuses what was the major preoccupation of the field, the detailed study and comparison of capitalist and socialist economies, with its methodology or its broader and more general objectives. This c...See the full content of this document
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