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Internationalization, institutions, and political change

Published online by Cambridge University Press:  22 May 2009

Geoffrey Garrett
Associate Professor, Department of Management, The Wharton School, University of Pennsylvania, Philadelphia.
Peter Lange
Professor, Department of Political Science, and Vice Provost for Academic and International Affairs, Duke University, Durham, North Carolina.
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Many analysts associate internationalization of markets with wide-ranging changes in domestic politics. An “open polity” approach shows how extant domestic institutions mediate in this relationship between internationally induced changes in domestic actors' policy preferences, on the one hand, and national policy and institutional outcomes on the other. The nature of labor unions and formal political institutions often results in political outcomes that differ significantly from those that would ensue if outcomes simply mirrored preference changes. In addition, while existing institutions may sometimes constrain governments from pursuing policies that would improve long-term economic performance, governments will often fail to change these institutions because of short-term political considerations.

Copyright © The IO Foundation 1995

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39. Under different institutions, this tension could be mitigated. For example, the existence of strong and centralized trade unions renders the KWS compatible with good economic performance, even in our open economy at. See our earlier discussion and Iversen, Torben, “Contested Economic Institutions: The Politics of Macro-economics and Wage Bargaining in Organized Capitalism,” Ph.D. diss., Department of Political Science, Duke University, 1995Google Scholar.

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