ABSTRACT
In the 1980s, the strength of regulated and institutionally dense capitalist economies such as the German and Japanese economies highlighted the importance of institutions and market coordination in organizing and embedding economic activities. A decade later, the relative decline of these economies, counterposed against the strong performance of the more liberal US economy posed an important cognitive challenge to embedded capitalism (Crouch and Streeck 1997). Both the German and Japanese employment systems are under pressure to liberalize and in some respects are liberalizing. Scholarship on comparative models of embedded capitalism “in crisis” strongly suggests however, that liberalization does not permeate national level systems in anything like a unified way (Boyer and Drache 1996, Hollingsworth and Boyer 1997). Especially the adaptation of employment and labor markets involve re-regulation as well as de-regulation and recent indications are that divergence between national regulatory regimes and practices is both narrowing and persisting (OECD 1999a, Regini 2000). How are we to understand the sources of employment liberalization?
