Small States in World Markets: Industrial Policy in Europe (Cornell Studies in Political Economy) - Softcover

"Small States in World Markets is the best discussion I have seen of the complex relationship between state institutions and civil society in advanced industrial democracies. The 'democratic corporatism' of the small states of Europe, so elegantly analyzed by Katzenstein, may offer a model for larger countries increasingly enmeshed in the world economy. This study is a major contribution to our understanding of both comparative and international politics." -Stephen D. Krasner, Department of Political Science, Stanford University "Even those who have reservations about the concept of 'liberal corporatism' and the approach of political economy will find that the framework is an instructive one for getting a comparative grip on what makes countries similar or different in how they grapple with a basic dimension of both sectoral and national economic viability. . . . Small States in World Markets is accessible and can constitute one component of even an undergraduate course on West European politics and policies."-The Review of Politics

By the early 1980s the average American had a lower standard of living than the average Norwegian or Dane. Standards of living in the Netherlands, Belgium, Sweden, Switzerland, and Austria also rivaled those in the United States. How have seven small democracies achieved economic success and what can they teach America? In Small States in World Markets, Peter Katzenstein examines the successes of these economically vulnerable nations of Western Europe, showing that they have managed to stay economically competitive while at the same time preserving their political institutions. Too dependent on world trade to impose protection, and lacking the resources to transform their domestic industries, they have found a third solution. Their rapid and flexible response to market opportunity stems from what Katzenstein calls "democratic corporatism," a mixture of ideological consensus, centralized politics, and complex bargains among politicians, merest groups, and bureaucrats. Democratic corporatism is the solution these nations have developed in response to the economic crises of the 1930s and 1940s, the liberal international economy established after World War II, and the volatile markets of more recent years. Katzenstein maintains that democratic corporatism is an effective way of coping with a rapidly changing world, a more effective way than the United States and several other large industrial countries have yet managed to discover.