IDEAS home Printed from https://ideas.repec.org/p/zbw/opodis/201304.html
   My bibliography  Save this paper

Emerging market economies and the financial crisis: Is there institutional convergence between Europe and Asia?

Author

Listed:
  • Hoen, Herman W.

Abstract

It is often stated that globalization makes a smaller world by institutional conver-gence. Economic orders become alike across the world. This article addresses institutional change triggered by the global financial crisis of 2008/2009 and challenges this general conviction of worldwide convergence by comparing developments in emerging markets in Europe and Asia. The rise of emerging markets, both in Eastern Europe and in Asia, entailed encompassing institutional reform. In analysing the extent to which there is institutional convergence, the article follows the approach of Varieties of Capitalism. This approach distinguishes two ideal types of capitalism: a liberal market economy and a coordinated market economy. In liberal market economies, firms are primarily driven by competition, whereas in coordinated market economies firms also coordinate with other actors by strategic interaction. The basic premise is that countries with a specific set of institutions develop institutional complementarities. Therefore, considering institutional change, liberal market economies and coordinated market economies are expected to respond in different ways to external shocks, such as the global financial crisis. Being aware of the pitfalls that the approach suffers from by simply pinpointing countries on a broad continuum, the article argues that the emerging market economies in Europe are on the liberal side of the scale. On top of that, it builds the argument of a tentative convergence towards further liberal institutional design. With respect to emerging markets in Asia, another development is observed. There is converging institutional change towards coordinated market economies characterized with strong state influence and an imperative bureaucracy. The expected convergence in the two groups of emerging market economies in Europe and Asia leads to the conviction of divergence between the groups.

Suggested Citation

  • Hoen, Herman W., 2013. "Emerging market economies and the financial crisis: Is there institutional convergence between Europe and Asia?," Discourses in Social Market Economy 2013-04, OrdnungsPolitisches Portal (OPO).
  • Handle: RePEc:zbw:opodis:201304
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/75292/1/749915226.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Kolev, Stefan, 2010. "Der bulgarische Weg seit 1989: Wachstum ohne Ordnung?," Discourses in Social Market Economy 2010-12, OrdnungsPolitisches Portal (OPO).
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Globalization; Institutional Economics; Varieties of Capitalism; Emerging Markets;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:opodis:201304. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics). General contact details of provider: http://ordnungspolitisches-portal.de/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.