Pepper Culpepper is Professor of Political Science at the European University Institute in Italy. His research focuses on the intersection between capitalism and democracy, both in politics and in public policy. His book Quiet Politics and Business Power: Corporate Control in Europe and Japan (Cambridge University Press 2011), was awarded the 2012 Stein Rokkan Prize for Comparative Social Science Research. He is the author of Creating Cooperation (Cornell University Press, 2003) and co-editor of Changing France (with Peter Hall and Bruno Palier, Palgrave 2006) and of The German Skills Machine (with David Finegold, Berghahn Books 1999). His work has appeared in Comparative Political Studies, International Organization, Politics & Society, Socio-Economic Review, World Politics, Revue Française de Science Politique, Politische Vierteljahresschrift, West European Politics, Journal of European Public Policy, Journal of Public Policy, and the Oxford Review of Economic Policy, among others. A former Marshall Scholar at Oxford University, he has also held long-term visiting appointments in France, Germany, and Japan.
Can coordinated political economies such as Japan and Germany retain their distinctive institutional varieties of capitalism, given the pressure of global financial markets. The organization of financial and corporate governance through patient holders of capital, rather than primarily through the logic of equity markets, has long served as the linchpin of these systems. This research project will investigate the robustness of systems of patient capital in four leading coordinated political economies in the contemporary period between 1990 and 2006: Japan, France, Germany, and the Netherlands. There is a little debate about the importance of patient capital among either political economists or policy-makers, but scholars disagree about the dynamics and causes of change in national financial institutions. There is a divergence between those scholars who emphasize shifts in formal laws and policies versus those who focus on shifts in informal shared ideas that lead to significant economic change in the wake of globalization. Much conventional thinking in political science attributes the diversity in capitalist systems to the diversity of legal regimes that support those capitalist models. If informal institutions governing financial systems are however resistant to change in formal legal rules, then much of the conventional thinking about the mechanisms through which the organization of finance changes domestic politics may be mistaken. This question has important implications for policy debates about the ideal form of financial regulation in both advanced industrial and industrializing countries. This four country case design is structured so as to compare the relative importance of formal political action interacts with change in informal norms and ideas in the process of economic change. The author has already gathered data on changes in ownership concentration among the largest companies in 18 advanced industrial economies since 1995, and for the four case study countries since 1990. Moreover, the author has already studied the political process of change in France and Germany. This study will expand the project to include the Netherlands and Japan because both these countries have maintained patient capital without nominal ownership concentration, making them highly unusual in international comparison. In Japan, this has been achieved through stable cross-shareholdings involving the keiretsu; in the Netherlands, through the use of trust offices. The case studies will evaluate the mechanisms by which patient capital was long maintained, and now legal and economic changes have challenged this system in two countries. This project will result in a book manuscript on formal and informal change in advanced capitalism, the first draft of which I intend to finish during the funding period. The project will additionally result in two articles to be published in peer-reviewed journals: one summarizing the comparative findings of the project and the politics of change in corporate governing systems; the other dealing with the problem of assessing informal institutions and incorporating them into comparative political analysis.