The Comparative Political Economy of Growth Models: Explaining the Continuity of FDI-Led Growth in Ireland and Hungary

This article argues that the quiet politics of informal business-state interaction explains the political determinants of growth regimes. Building on the business power literature within the study of comparative capitalism, it shows that the noisy politics of elections often leads to changes of gove...

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Bibliographic Details
Published in:Politics & society 2021-03, Vol.49 (1), p.75-106
Main Authors: Bohle, Dorothee, Regan, Aidan
Format: Article
Language:English
Subjects:
Business
Capital
Capital investments
Capitalism
Case studies
Companies
Comparative analysis
Comparative politics
Elections
Elites
Foreign investment
Growth models
Industrial policy
Investments
Local politics
Policy making
Political economy
Political elites
Political power
Politics
Research design
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Summary:This article argues that the quiet politics of informal business-state interaction explains the political determinants of growth regimes. Building on the business power literature within the study of comparative capitalism, it shows that the noisy politics of elections often leads to changes of government but rarely to fundamental changes in the growth regime. Rather, growth models can be traced to the interactions and interests of dominant corporations within a country and its policymaking elites. The argument is developed through a comparative case study research design, using the case of foreign direct investment–led (FDI-led) growth in Ireland and Hungary. FDI-led growth regimes are a universe of cases that rely on state-led industrial and enterprise policies targeting the capital investment of foreign-owned multinational firms. Despite periods of noisy electoral politics challenging basic tenets of the FDI-led growth model in both Hungary and Ireland, the continuity of FDI-oriented growth is traced to the corporate politics of business-state elite deals.
ISSN:0032-3292
1552-7514
DOI:10.1177/0032329220985723