Comparative economic systems

An economic system is a bundle of institutions that answer a few recurring questions: who owns productive assets, how decisions about production and prices are coordinated, how firms are financed and disciplined when they fail, who has a say inside the firm, and how income and risk are shared. Comparative economic systems studies those bundles side by side. The atlas uses the field's approach throughout: it treats "capitalism", "socialism" or "the Nordic model" as shorthand for particular combinations of mechanisms, not as labels that settle anything by themselves.

• Ownership: private, state, cooperative, communal, mixed.
• Coordination: market prices, administrative plans, negotiated bargaining between organised groups, hierarchy inside firms.
• Discipline: bankruptcy and takeovers (hard budget constraints) or bail-outs (soft budget constraints).
• Voice inside the firm: shareholder control, codetermination, workers' councils.
• Redistribution and insurance: taxes and transfers, universal or targeted benefits, resource dividends.
• Political setting: the regime type that writes and enforces these rules.

The classic field grew out of the Cold War comparison of Soviet-type planning with Western market economies, and out of the interwar socialist calculation debate. János Kornai's work on the "socialist system" argued that political structure (a single party's monopoly of power) and ownership structure explain the typical behaviour of planned economies, such as chronic shortage. After 1989 the field turned to transition and then to differences among capitalist economies. Djankov, Glaeser, La Porta, Lopez-de-Silanes and Shleifer's "new comparative economics" (2003) frames every system as a trade-off between the social costs of disorder (private expropriation) and of dictatorship (expropriation by the state), and asks which institutions minimise the sum. Political economists in the "varieties of capitalism" tradition compare how firms coordinate with unions, banks and each other.

• Soviet-type central planning (USSR 1928–1991 and its imitators).
• Yugoslav self-managed market socialism (1950–1991).
• Liberal and coordinated market economies (the United States, Germany).
• State-led development (Japan, South Korea, Taiwan) and contemporary state capitalism (China's state sector, national oil companies).
• Resource-rent economies with very different governance (Norway, Botswana, Turkmenistan).

Typologies can harden into stereotypes: real economies mix mechanisms and change over time. Comparisons are confounded by history, geography and the political regime, so the effect of one institution is rarely identified cleanly. The older field was criticised for comparing an idealised model of one system with the actual record of the other.

The collapse of Soviet-type planning settled the question of whether comprehensive administrative allocation could match market economies in productivity and consumer welfare: the evidence is overwhelmingly that it could not. Within market economies, research finds several institutional configurations that sustain high incomes, with different distributions of risk and income. Which mechanisms travel to other settings remains an open question.