INTRODUCTION

In the last fifteen years, there have been many theoretical efforts to explain the breaking down of the old Fordist model of accumulation. Thus, it is not our intent to review the many causes which explain the erosion of this model. In this paper, we choose to focus on new social institutions that are emerging from the breakdown of the Fordist model, and to focus on the “transition” towards new institutional configurations of “post-Fordism.” We are concerned with new patterns and industrial routines at the level of both intra- and interfirm relationships. By doing this, we hope to contribute to the understanding of the embeddedness of institutions in modern capitalism.

In our judgment, there are two determinants of crucial importance to understand the transitory period in which we are living. These two determinants, largely interdependent and interrelated, are, on the one hand, the process of “globalization” and, on the other, an ongoing technological and organizational revolution. These two determinants are crucial, for they contribute to eroding and destroying the classical forms of production and principles of efficiency of the old Fordist model, and as they push societies toward the adaptation of new institutional configurations. In this sense, these two determinants contribute to the new “post-Fordist” regime(s) of accumulation.

To explore these aspects of the transitory regime towards post-Fordism, we concentrate on several interrelated issues.

INTRODUCTION

Recent years have witnessed a growing debate among students of international relations as to why international regimes form. The purpose of this chapter is to suggest that the formation of regimes is rooted in several types of international failure which prompt the development of governance structures either by states and/or by markets. Building on the recent work on international institutions and transactions cost economics by Yarbrough and Yarbrough, this chapter extends their argument of the study of international regimes (Yarbrough and Yarbrough, 1990).

We argue that state intervention represents one among many possible forms of organizing economic or political activity. Where structural failures exist at the domestic level some form of governance response, either by firms (albeit as decentralized as the competitive market system) and/or by states may be required.

Similarly, at the international level it may be necessary to devise institutions to facilitate cooperation in the presence of structural failures (Caporaso, 1993). Unlike some political economists who narrowly focus on transactions costs as if they were the only kind of market failure (Keohane, 1983, 1995), we identify four different types of structural failure that can contribute to the formation of international regimes: efficiency failures, distributional conflicts, macroeconomic instabilities, and security dilemmas. As strategic rational actors, nation-states may respond to the presence of these structural failures by creating international regimes or some other kind of governance structure. In addition, we argue that, absent a hegemonic leader(s), coalitions of like-minded states, or clubs, may be the principal agent behind regime formation.

In this chapter I continue to investigate how coordination failures affect democratic performance, this time considering the role of such failures in sustaining dominant party systems. Dominant parties are those that are uninterruptedly in government, either alone or as the senior partners of a coalition, for a long period of time (say three to five decades). Such parties are problematic for democratic theory in at least two ways.

First, are systems that support dominant parties really democratic or not? If a party is always the sole or senior party of government, then a key feature of democracy – the possibility of peaceful alternation in power – is called into doubt. Is there something in the structure of the system (whether intentionally or unintentionally contrived) that gives the dominant party an unfair electoral advantage? Would the dominant party actually step down were the electorate to vote it out?

Second, even if one believes that a particular dominant party would step down if they ever lost an election, and also believes that the electoral system is basically fair, there is still the worry that a long tenure in power may corrupt. The Italian Christian Democrats and the Japanese Liberal Democrats are two signal examples in this regard. Both parties' long reigns ended recently in part through a series of devastating disclosures about how corrupt each had become. This returns one to the question of how they continued to be elected: Do some systems facilitate corrupt but nonetheless successful politics more than others?

Since V.O. Key's seminal work in the 1950s, the study of critical realignments has formed an important part of American political studies. Definitions of what critical realignments are vary from author to author but certain features recur in the literature: First, there are “short-lived but very intense disruptions of traditional patterns of voting behavior” in which “large blocks of the active electorate … shift their partisan allegiance”; second, there are disruptions of “the party nominating and platform-writing machinery,” leading to “transformations in the internal loci of power in the major party most heavily affected by the pressures of realignment”; and third, there are “transformations in large clusters of policy” (Burnham 1970:6, 7, 9). Critical realignments thus feature abrupt changes in voting, nominating, and policy-making strategy on the part of elites and voters.

The most dramatic examples of realignment entail the disintegration of a major party. When the Whig party fell apart in the 1850s and was rapidly replaced by the Republican party, large numbers of voters and politicians switched their allegiance, with profound consequences for the nation's politics. When the Liberal party in the United Kingdom fell apart in the 1920s and was rapidly replaced by Labour, again large numbers of voters and politicians switched their allegiance, and again the consequences for the nation's politics were profound.

The abruptness of the change in voter and elite strategies in these cases, and the patterned nature of the changes – with virtually all former Whigs going either into the new Republican or the reconstituted Democratic party, for example – indicates the element of coordination in realignment politics.

The primary purpose of this chapter is to develop a consistent set of abstract, non-country-specific terms that can be used to describe and classify electoral systems, especially as regards their coalition-promoting or-retarding properties. Most of the terms I use already appear in the literature, but I have found it necessary to introduce several new terms, or new usages of old terms, for the sake of clarity and consistency. Throughout the chapter, I use the term “structure” to denote a “subsystem” within the electoral system. Thus, I refer to a system's district structure (having to do with the number, size, and nature of electoral districts), its alliance structure (having to do largely with opportunities to pool votes), and even its formulaic structure (having to do with the multiplicity of different electoral formulas that can appear at different levels in a system).

Another purpose of this chapter is to give some idea of the recent state of the art in electoral design. I have taken a “snapshot” sample of the world's democracies: all 77 polities that scored either a 1 or 2 on the “political rights” index in the Freedom House survey for 1992–3. This sample excludes some countries with long democratic traditions, such as India and Venezuela, that have hit hard times more recently. It also includes about a dozen countries that have only held free and fair elections very recently, have little democratic experience, and have by no means emerged as consolidated democracies.

Most of this book has focused on successful electoral coordination and the conditions that facilitate such successes in practice. Coordination failures have certainly been noted but thus far not much has been said about their consequences. In this part of the book, I investigate how coordination failures affect various aspects of democratic performance, including those that touch on the representativeness of government policy (this chapter), the maintenance of dominant parties (Chapter 13), and the politics of realignment (Chapter 14).

I center the discussion in the present chapter on the following question of electoral engineering: How will democratic performance be affected when the electoral system broadly conceived (including both the legislative and executive election procedures) becomes stronger? This is a classic question in electoral studies to which there is a traditional (albeit contested) answer: Increasing the strength of the electoral system will decrease the representativeness of the polity's legislative and executive branches but will increase government stability. In the standard view, then, there is a grand trade-off entailed in any strengthening of the electoral system. I shall focus on the representational side of this tradeoff, investigating how the quality of representation changes with the politics of electoral coordination.

The chapter proceeds as follows. First, I discuss some of the various kinds of representation that an electoral system might affect. Representation is often defined as having one's views voiced in the legislative decision-making process.

In the last two chapters, I have investigated strategic voting equilibria in SMSP and in PR elections, two of the three electoral systems that Duverger originally explored in his seminal work in the 1950s. In this chapter, I consider the dual-ballot system, the subject of what was originally Duverger's third proposition.

For dual-ballot systems, Duverger makes no specific claim regarding an equilibrium number of parties. He does argue that such systems produce no incentives to vote strategically in the first round, concluding that “the variety of parties having much in common does not adversely affect the total number of seats they gain since in this system they can always regroup for the second ballot” (Duverger 1954: 240). But this leads only to an expectation that there will be “more than two” parties. The literature on electoral systems has not since produced any more specific prediction and, in a recent survey, Sartori (1994:67) opines that “the reductive effects on the number of parties of the double ballot cannot be generally predicted with any precision” (an opinion shared by Bartolini 1984:118).

This chapter explores the possibility of saying something more precise about the dual ballot's effect. I shall argue two main theoretical points. First, when voters are concerned only with the outcome of the current election and have rational expectations, strategic voting plays a role in dual-ballot elections similar to that it plays in single-ballot plurality elections: acting to limit the number of viable first-round candidates.

Part II of this book investigated the nature and incidence of strategic voting in a variety of electoral systems, with particular emphasis on strategic desertion of weak candidates and lists. Duverger, and many after him, have argued that elite anticipation of strategic voting should lead to prudent withdrawals and hence a reduction in the number of competitors entering the field of battle. In particular, those elites who foresee that their own candidates or lists will bear the brunt of strategic desertion are likely to decide that mounting a (hopeless) campaign is not worth the cost, and seek instead to throw their support behind more viable candidates or lists (presumably for a price). To the extent that withdrawals of this sort do occur, the number of competitors will of course decrease.

In this chapter, I note that this argument about prudent withdrawals is theoretically limited in some of the same ways that the Duvergerian argument about strategic voting is limited. First, the argument presupposes that it will be clear at the time at which entry decisions must be made which candidate(s) or list(s) are doomed to be perceived as nonviable on the day of the election, hence shunned by instrumentally rational voters. So, just as voters must have consistent beliefs (“rational expectations”) about who is trailing, elites must have consistent beliefs about who will be trailing and hence be the victim of strategic voting.

In twentieth-century capitalism, there have been several changes in perceptions about the relative effectiveness of specific management styles and work organizations (Boyer, 1991; Chandler, 1962, 1977, 1990; Piore and Sabel, 1984; Sabel, 1982). Changes in technology, relative prices, and consumer preferences have been instrumental in altering the perception as to why one form of management style and work practice is superior and should supplant existing forms (North, 1990). Economic actors not only defend specific forms of management and work practices as means of achieving particular economic outcomes and performances (Marglin, 1991), but they also attempt to borrow from other societies what they consider to be “best practices.”

This paper argues that forms of economic coordination and governance cannot easily be transferred from one society to another, for they are embedded in social systems of production distinctive to their particular society. Societies borrow selected principles of foreign management styles and work practices, but their effectiveness is generally limited. Economic performance is shaped by the entire social system of production in which firms are embedded and not simply by specific principles of particular management styles and work practices. Moreover, a society's social system of production tends to limit the kind of goods it can produce and with which it can compete successfully in international markets.

The chapter suggests, with empirical references to the Japanese, German, and American economies, that a society's social system of production his very path dependent and system specific.

AN EVOLUTIONARY TYPOLOGY OF INTERORGANIZATIONAL RELATIONSHIPS AND NETWORKS

Interorganizational networks have been one method of coordinating prices, wages, and purchases for some time. The most common examples were agricultural cooperatives, cottage industries, and cartels – types of coordination commonly found in Europe and Asia. These associations of organizations, frequently called obligational linkages (Williamson, 1985), were found even in the industrial age, which saw the emergence of large corporations and the vertically integrated firm in the United States (Aldrich, 1979; Chandler, 1962, 1977; Williams, 1975). Large companies were created in a number of countries through mergers as managers attempted to drive down costs, eliminate competition, and achieve large economies of scale by means of stable and large production runs. The dominant concern of vertically integrated hierarchies was to increase productivity by reducing transaction costs vis-à-vis their suppliers or customers (Williamson, 1975), thus earning a competitive advantage in the marketplace. Now many small firms can survive in specialized niches, but they frequently join in joint ventures with large companies that produce and/or market their products (Powell and Brantley, 1992). Even more complex alliances involving large numbers of organizations are being formed to accomplish tasks and objectives that no single firm could achieve on its own, such as establishing industrial standards, developing complex products such as automobiles, semiconductors, and aircraft, and expanding the pool of industrial knowledge (Alter and Hage, 1993; Wikstrom and Normann, 1994).

This volume addresses several distinctive but interrelated problems. First, it is very much concerned with identifying the various institutional mechanisms by which economic activity is coordinated, with understanding the circumstances under which these various mechanisms are chosen, and with comprehending the logic inherent in different coordinating mechanisms. Throughout Eastern and Western Europe as well as in North America during the 1980s, there was a dramatic shift toward a popular belief in the efficacy of self-adjusting market mechanisms. Indeed, the apparent failure of Keynesian economic policies, the strains faced by the Swedish social democratic model, and the collapse of Eastern block economies led many journalistic observers to argue that capitalism is a system of free markets that has finally triumphed. Some added that the more pervasive the market could become, the more impressively national economies would perform.

Paradoxically, during the same period, there was a rapidly accumulating theoretical literature that demonstrated that markets were not ideal mechanisms for coordinating transactions among actors when either the quality of products is uncertain, increasing returns to scale prevail, most future contingencies are uncertain, or there is a multitude of repetitive transactions within a truly decentralized monetary economy. Moreover, there has been increasing evidence that the market as a coordinating mechanism does not lead to the best economic performances in industries whose products have technologies that are very complex and change very rapidly (Campbell, Hollingsworth, and Lindberg, 1991; Chandler, 1977; Hollingsworth, 1991a; Hollingsworth, Schmitter, and Streeck, 1994; Piore and Sabel, 1984; Sabel and Zeitlin, 1985, 1996; Williamson, 1975, 1985). In short, the basic features of most modern economic activity point to the importance of coordinating mechanisms alternative to markets.

Students of politics have asked how electoral laws affect the formation and survival of political parties since mass elections first became common in the late nineteenth and early twentieth century. Henry Droop, an English advocate of proportional representation (and inventor of the Droop quota), noted as early as 1869 that plurality elections promote what later scholars have called “strategic” or “tactical” voting:

Droop was also surely aware of the plurality system's tendency to underrepresent minority parties – a topic generally discussed today under the rubric of “disproportionality,” “big-party bias,” or the “mechanical effect.” In any event, by 1881 he had enunciated a version of what is now called Duverger's Law:

“Capitalism is a moving target” could well be the leitmotif tot this entire volume. In Part I, not only did every essay stress the variety of capitalist institutions and the importance of explicit arrangements for coordinating exchanges and governing behavior, but they were all sensitive to changes in the mix of markets, hierarchies, associations, networks, state agencies, and corporatist arrangements over time. In Part II, an effort was made to aggregate these mixes into distinctive “social systems of production” and to specify the conditions for their emergence and subsequent evolution – again, with the objective of explaining persistent diversity across units and periods, not their imminent convergence.

Part III explores the significance of yet another potential source of variation within capitalism: space. In Parts I and II, as well as in Governing Capitalist Economies, the dominant technique of analysis involved comparisons according to function (or, more specifically, sectors of production and distribution) and time (or, more specifically, historical periods during which some relative equilibrium in the mix of governance mechanisms has set in).

The authors, implicitly or explicitly, limited their attention almost exclusively to the national level of spatial aggregation. Following a well-worn tradition in the social sciences, they seem to have assumed either that each nation tended to develop a culturally distinctive “style of capitalism” based on its peculiar human and material endowment, as well as historical experience, or that each state embodied a unique configuration of power and authority that was reflected in the creation and operation of its intermediary institutions.

For as long as voting procedures have been used to decide important and controversial issues, there have been legislators and electors willing to vote strategically. Theoretical interest in strategic voting dates at least to Pliny the Younger (see Farquharson 1969) and probably earlier. In this chapter, I build on rather more recent and formal treatments of the strategy of voting: those framed in the decision-theoretic and game-theoretic traditions. Most of this work has appeared in the last thirty years and focuses on the behavior of legislators (e.g., Farquharson 1969; McKelvey and Niemi 1978; Miller 1980; Shepsle and Weingast 1984; Banks 1985; Austen-Smith 1987; Ordeshook and Schwartz 1987). This chapter focuses on the other, less well-trodden, branch of research into strategic voting, that dealing with the behavior of voters in mass elections.

There are of course many ways to conduct a mass election. This chapter deals in particular with elections in electoral districts that satisfy the following criteria: (1) There is one seat to be filled in the district; and (2) there is only one round of voting, after which the victor is decided. There are many electoral systems that satisfy these criteria: the Anglo-American first-past-the-post system; the Australian alternative vote system; the approval voting system; and so on.