(Page 2 of 21) - Sectoral Varieties of Adjustment: The Response of Portuguese Services Sectors to European Integration authored by Evans de Carvalho, Ana Maria.

From this follows a dualist perspective according to which, where the market

predominates, the economy becomes more efficient, at the cost of traditional businesses and
social protection, and where the state prevails, its intervention amounts to regulatory
protectionism and the economy tends to preserve traditional businesses and social protection, at
the cost of less efficiency and modernisation.

The logic behind the conventional assumptions of comparative political economy is that

“old” patterns of business organisation around individual ownership, family practice, and social
welfare do not provide the infrastructures and resources that are necessary for firms to increase
productivity, flexibility, and quality of service.

Unable to keep pace with technological

advances and respond timely and effectively to the increasing demands of consumers and the
growing competition associated with market opening, traditional businesses tend to decline and
be replaced by more mobile and efficient forms of business organisation, based on vertical
and/or horizontal integration.

Regulatory protectionism emerges, in this perspective, as the “antidote” to the

progression of market forces.

Traditional enterprise is, accordingly, sustained where states

enforce legislative barriers to competition, but such regulatory protectionism only serves to
maintain inefficient business organisation, rather than promoting modernisation.

Those who

acknowledge the contribution by states to economic modernisation through the implementation
of plans of development focus on large firms in industrial sectors.

Overall, the dominant

See Vincent Cable, “The Diminished Nation-State: A Study in the Loss of Economic Power”, Daedalus, 129, 2,

1995, pp. 23-51; Robert Boyer and Daniel Drache, eds., States Against Markets, NY: Routledge, 1996; Peter
Evans, “The Eclipse of the State? Reflections on Stateness in an Era of Globalization”, World Politics, 50, 1,
1997, pp. 62-87; Martin Rhodes and Yves Meny, eds, The Future of European Welfare, London, Macmillan,
1997; Geoffrey Garrett, “Global Markets and National Politics: Collision Course or Virtuous Circle?”
International Organization, 52, 4, 1998, pp. 787-824; D. Swank, “Funding the Welfare State and the Taxation of
Business in Advanced Market Economies”, Political Studies, 46, 4, 1998, pp. 671-91; Herbert Kitschelt, Peter
Lange, Gary Marks, and John Stephens, eds., Continuity and Change in Contemporary Capitalism, Cambridge:
Cambridge University Press, 1999.

See Suzanne Berger and Michael J. Piore, Dualism and Discontinuity in Industrial Societies, NY: Cambridge

University Press, 1980; Kenichi Ohmae, The Borderless World, NY: Harper, 1991; Fritz Scharpf, Governing in
Europe, Oxford: Oxford University Press, 1995; Regini 1995; B. Eichengreen, “The Tyranny of the Financial
Markets”, Current History, Nov. 1997, pp. 377-82; Dani Rodrik, Has Globalization Gone Too Far? Washington:
Institute for International Economics, 1997; Michael Hiscox, “Class versus Industry Cleavages: Inter-industry
Factor Mobility and the Politics of Trade”, International Organization, 55, 1, Winter 2001, pp. 1-46.

See Dawson (1995); Davies (1995); Regini (1995).

This view goes back to Polanyi’s conceptualization of the state as the ‘organizer’ of markets and protector of

individuals vis-a-vis the social disruptions of ‘unregulated’ markets.

See Karl Polanyi, The Great Transformation,

NY: Rinehart & Co., 1944.

See Berger and Berger and Piore (1980).

See Andrew Shonfield, Modern Capitalism, NY: Oxford University Press, 1965; Eric Nordlinger, On the

Autonomy of the Democratic State, Cambridge, Mass: Harvard University Press, 1981; John Zysman, Governments,
Markets, and Growth: Financial Systems and the Politics of Industrial Change, Ithaca, NY: Cornell University