The British Variety of Capitalism: Institutional Change, Industrial Relations and British Politics

Institutionalist approaches to the study of politics have long exhibited a tendency to emphasize continuity at the expense of change. This article seeks to elaborate an institutionalist theoretical framework that explicitly integrates a theory of change - one which emphasizes the interaction between structural economic change and state action - and to illustrate it through an examination of the evolution of postwar British industrial relations institutions. The article examines the British variety of capitalism in comparative perspective to ask first, how adequately it has been characterized in the past, and second, how it has changed in response to both domestic and international factors. The British case is, in fact, a pivotal one for contemporary institutional theory because it appears to manifest greater institutional change than most institutional approaches anticipate, and because the British political economy is not easily assimilated into common typologies of varieties of capitalism. The picture that emerges challenges institutionalist accounts of British political economy that characterize Britain as a long-standing liberal market economy and identifies the conditions under which the institutions regulating the labor market and class relations were transformed in postwar Britain. © 2007 Palgrave Macmillan Ltd.