1 Varieties of Capitalism and Institutional Complementarities in the Macroeconomy: An Empirical Analysis*

How do national variations in the institutions of the political economy affect economic performance? This question has been central to comparative political economy for many years. Most answers given to it focus on institutions in a single sphere of the political economy. In economics, there are large but separate literatures on labor and financial markets. One explores the impact of labor regulations, social regimes, and trade unions on growth or unemployment (Nickell 1997; OECD 1994; Calmfors and Driffil 1988). The other considers the effects of accounting standards, the legal standing of owners or creditors, ownership patterns, and equity or bank-based finance on levels of investment or growth (Carlin and Mayer 1999a, 1999b; LaPorta et al. 1998a; Huang and Xu 1998; Mayer 1996). A similar separation is evident in political science. Although neo-corporatism can be defined in broad terms (cf. Katzenstein 1985; Schmitter and Lehmbruch 1978), analyses of its economic impact usually focus on the organization of the trade union movement, considering its interaction mainly with the partisanship o