What is the role of informal institutions in the institutional constellations of the VOC framework?

Abstract

The Varieties of Capitalism (VoC) tries to explain institutional differences in the western developed world. It does this by taking a firm based approach and compares institutional complementarities in different economies. While Informal institutions show to be relevant for economic outcomes, within this theory their role has been undeveloped. The aim of this study is to fill this gap and find out what role informal institutions play within the Varieties of Capitalism. To this end, the research questions is as follows: What is the role of informal institutions in the institutional constellations of the VOC framework? To answer this question I use individualism and historical family systems to find the relevance of informal institutions for the VoC. The research question is answered by comparing the level of individualism in the VoC countries with the type of coordination found at an institutional level, and by exploring the persistence of individualism through family systems. My findings are that individualism, while not in all cases, can be complimentary to the institutional constellation in the VoC. The relevance of individualism is evident from the link with historical family systems and the persistence of the latter. Furthermore historical family system show to have a direct relation with the type of coordination found today.