Heft36 1 - SFB 580 - Friedrich-Schiller-Universität Jena

MARTIN SEMENOVA MENDELSKI
the criticism and underlined the importance
of politics for institutional change (Hall/
Soskice 2003, p. 245; Hall/Thelen 2005; Hall
2006). A recent empirical study by Paunescu/
Schneider has confirmed switching from state
to market coordination for several developed
economies (Paunescu/Schneider 2004). The
relevant question for transition countries is
whether mixed logics of coordination can
become complementary and converge towards
pure LMEs and CMEs or rather remain noncomplementary
hybrids. Put differently, will
there be dual convergence towards pure forms
of organization or rather a lock-in of mixed
organizational logics?
In my opinion, sustained mixed logics of
coordination (second-best solution) are
possible due to positive feedbacks resulting
from increased enforcement, i.e. more
effectiveness. Let me illustrate a more dynamic
model of capitalist diversity (see figure 1) to
explain the fundamental differences between
developed economies (CMEs, LMEs) and
transitional market economies (TMEs). In
contrast to transition economies, developed
economies have strongly enforced and
effective institutions. While in developed
economies the possibility to increase economic
performance by increasing the quality of
institutions (effectiveness) is nearly exhausted,
performance can still be improved by making
institutions complementary (efficiency).
Given that complementarity depends on
external environment changes, developed
countries can improve efficiency by adapting
to external pressures by switching their logic of
coordination (horizontal shifts between CMEs
and LMEs). 23 These horizontal shifts tend to
be slow due to institutional complementarities,
path dependence and certain reforms (e.g.
better protection of minority shareholders,
adopting international accounting standards)
and often do not have a major impact on other
sub-systems or corporate strategies. Therefore,
despite “liberalizing” reforms, switching of
coordination modes should remain difficult in
developed economies (Hall/Thelen 2005, p. 26
and p. 31).
While gradual institutional and economic
development may be true for developed market
economies, transition economies experience
rapid formal institutional change. Due to the
unfinished stage of capitalism (lower economic
development) and high uncertainty (transition
as an open-ended process), institutions in
post-communist economies have initially a
transitory character, i.e. they are only weakly
enforced. Because of weak enforcement,
institutional change is easier and, at least
in the short or middle-run, there are more
alternatives for capitalist trajectories than in
developed economies. 24
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