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CPE NOTES MARCH 3 2008 - reason is that is that any model...

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CPE NOTES MARCH 3 2008 More skills (skilled workers) are needed now in this era of technological change and expansion of international trade. One possibility of the effects of pressure from globalization would be for CME’s to get rid of some of the cooperational aspects that are associated with them and become more like LME’s. The second possibility is that these economies will change but will change in different paths and in different ways. Also the two different kind of CME’s would somewhat merge and look like sectoral CME’s. This is the “Neo-institutionalist” argument. 5 reasons why neo-I’s think this will happen. One is that governments choose how they develop economic policy and how they deal with globalization. The second is that we should not assume that the most efficient way to compete in international economy is not necessarily to cut taxes, decreasing labor costs, and shrinking the welfare state. The third
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Unformatted text preview: reason is that is that any model of change has to take in consideration political aspects of the economy and different interest groups that influence political decisions. The party system is very important in this. CME’s are controlled by social democrats and / or Christian democrats. They are very committed to large welfare states and coordinated business. The institutional veto points (like checks and balances system in the USA) will also have influence on on changing of economies. This is true because this gives the power to people to block some policies and initiatives. This prevents a single party from gaining too much power in any economy / nation. All these arguments blend together in the fact that these neo institutionalists argue that globalization will not cause all the capitalist economies to become the same sort of liberal economy....
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