Until the last ten or fifteen years, two partly overlapping approaches dominated comparative economics: the ideological and the straight-forward-descriptive. Writers following the ideological (or ‘isms’) approach stressed the essential features of broad types of economies (‘capitalist,’ ‘socialist,’ ‘labor-managed’), which they regarded as a seamless web of interdependent institutions. The descriptive approach concentrated on the precise description of the system's institutions and practices, including both its formal and informal features. However informative, it was short on general verifiable statements concerning the impact of system features on outcomes of interest to the economist. It was also short on explicitly comparative analysis. The modern analytical approach that we try to follow in this monograph differs, implicitly or explicitly, from the ideological and descriptive approaches in two major ways: (1) it treats the economic system and its components, for analytical purposes, as conceptually separate from the social and political system in which they are embedded; and (2) it applies the tools of economic theory to analyze the workings of different system components, in preference to the more general social-science discourse that characterized the older writings on the subject.