Political economy of Europe in an era of interdependence

This article reviews the recent literature on the political economy of the industrialized nations with a view to asking which lines of enquiry offer the most promising ways of understanding the political economies of Europe in an era of international interdependence. It proposes a model of the political economy with two layers, one that identifies the principal institutional frameworks affecting firm behavior, and a second that identifies the conditions on which the stability of these frameworks depends. The model is then used to identify some of the principal developments in the political economies of Europe during the 1980s and 1990s. The paper concludes by suggesting how future research might be oriented around the kind of 'adjustment paths' suggested by such an approach.