French Corporate Governance in the New Global Economy: Mechanisms of Change and Hybridisation within Models of Capitalism
| Author | Ben Clift |
| Published date | 01 October 2007 |
| Date | 01 October 2007 |
| DOI | http://doi.org/10.1111/j.1467-9248.2007.00655.x |
| Subject Matter | Article |
French Corporate Governance in the New
Global Economy: Mechanisms of Change
and Hybridisation within Models of
Capitalism
Ben Clift
University of Warwick
This article analyses the implications of the internationalisation of capital markets, and the influx of
Anglo-Saxon institutional investors,for the French model of capitalism. Its central contention is that the
global convergence thesis misrepresents contemporary evolutions because it pays insufficient attention to
mechanisms of change within models of capitalism. Secondly,framing analysis in ter ms of hybridisation
and fragmentation of national models, rather than convergence,offer s greater explanatory purchase over
the French model, constitutes a more accurate characterisation, and helps avoid the ‘convergence or
persistence’ impasse within models of capitalism analysis. In exploring French corporate governance, it
emphasises the importance of specifying the role of institutional mechanisms as transmission belts of
change as a precursor to an assessment of how far shifts in international political economic context bring
about changes within French capitalism. Focusingon financial market regulation regime, new legislation
in corporate governance and company law, and the market for corporate control as three key potential
mechanisms of change, it finds that pre-existing norms and structures endure, mediating the nature of a
national political economy’s articulation with the international context. Hybridisation and recombination
of capitalist institutions drawn from different models provide a far more persuasive account than
convergence.
There have been remarkable increases in the degree of enmeshment and inter-
connectedness of capital markets in a number of advanced post-industrial coun-
tries in recent decades, characterised by Anthony McGrew as the ‘financial
deepening’ of globalisation,arising ‘out of the interaction between greater“finan-
cialisation” of national economies and the scale of global financial activity’
(McGrew, 2005, p. 214). In the French case, the resultant internationalisation of
capitalism has seen dramatic rises in transborder mergers and acquisitions, French
companies listing overseas, French portfolio investment in foreign stock markets
and foreign ownership of stock listed on the Paris bourse. This has enmeshed
French firms in a set of global financial markets and networks. The protective
barriers behind which French capitalism restructured in the 1980s have become
much more porous today, with major implications for the French political
economy’s point of insertion into and articulation with its international context.
This exploration of the implications of these changes for the political economy
of French corporate governance is informed by combined insights of recent
doi: 10.1111/j.1467-9248.2007.00655.x
POLITICAL STUDIES: 2007 VOL 55, 546–567
© 2007The Author.Jour nal compilation © 2007 Political StudiesAssociation
developments in the international political economy (IPE) and comparative
political economy literatures.There is increasing recognition that the complexity
of economic globalisation generates ‘patterns of both economic convergence and
divergence’ not captured by ‘neoclassical or linear models of economic globali-
sation which equate it solely with global economic convergence’(McGrew,2005,
p. 220). Anticipation that convergence will occur and is needed to ‘prove’ the
existence of globalisation is flawed, rooted in a textbook neoclassical economic
model and the theoretically threadbare ‘logic of no alternative’ argument, both
projected unhelpfully on to the global political economy.Rather, how the process
of globalisation really ‘plays out’ is ‘highly uneven such that it is associated with
both economic convergence and divergence, as different economies/subregions/
sectors are differentially integrated into this globalizing world economic order’
(McGrew, 2005, p. 221). In this light, diversity of responses to globalisation, and
the particularities of how it is mediated by ‘domestic’institutions and politics, are
all part of the ‘variable geometry’ (Castells, 2000) of globalisation.
Such thinking prepares the ground for cross-fertilisation between IPE and com-
parative political economy analysis.Many comparative political economy scholars
have become increasingly frustrated with the ‘are we witnessing either conver-
gence or persistence’ framing of the debate about the evolution of models of
capitalism.Thus, in this case, either the French political economy is preserved in
aspic, or the French political economy is continually evolving in a process of
convergence. Such a cul-de-sac str uggles to account for the co-existence of
dramatic changes (many along similar lines in different cases) and enduring highly
significant particularities.
A further problem with the convergence account is that use of ideal-types leads
to a stylised, caricatured version of the ‘Anglo-Saxon’or liberal market economy
(LME) model becoming the yardstick by which convergence is judged.Yet the
US political economy, for example, often f ails to conform to the ideal-type
supposedly so closely modelled upon it (see Crouch,2005, pp.441–2). Indeed,this
is particularly true of corporate governance. Large US companies developed a
range of anti-takeover devices (‘shark repellents’) in the wake of the 1980s
takeover boom, notably through state law legislation and favourable state court
decisions (Monks and Minow, 2004, p. 42, pp. 110–20, pp. 232–9). This created
impediments to the market for corporate control, generating a disparity between
US corporate governance and the LME ideal-type.
A number of ways out of the ‘convergence or persistence’ impasse have been
suggested. Colin Hay, for example, frames his analysis in terms of ‘common
trajectories, variable paces, divergent outcomes’ (Hay, 2004), while others have
characterised evolutions in ter ms of ‘hybridisation’ (Lütz, 2004, p. 189; Perraton
and Clift, 2004,p. 258).Hybridisation is helpful because it captures the qualitative
nature of change, doing less violence to the facts than a rather too loosely and
liberally applied notion of convergence.
FRENCH CAPITALISM AND THE GLOBAL ECONOMY 547
© 2007The Author.Jour nal compilation © 2007 Political StudiesAssociation
POLITICAL STUDIES: 2007, 55(3)
To continue reading
Request your trial