State and Finance in the OECD

How are financial systems ordered in OECD countries? How is that order changing in the face of globalization? These two questions form the rationale for the present essay. The standard literature points to the rise of markets and the relative decline of states in the ordering of financial markets. I show that this proposition is partially correct at best and that behind the retreat of states from the active allocation of credit, the structure of the state looms large in the organization of finance. Unlike the study of the labor market, the study of the capital market has not developed into a proper subfield of political science. Its study has been dominated by a dichotomy of limited empirical validity—the opposition between market and state. Economists have traditionally focused their attention on markets, studying concentration and oligopolistic interactions among large commercial banks. Political scientists, in response, have pointed to the role of the state. Following the developmentalist logic of Alexander Gerschenkron, John Zysman, among others, proposed a threefold typology of banking systems, distinguishing between the French-like “state-led” model, the Anglo-Saxon “market-based” model, and the German-like “private-bank organized” model. 1 The state-versus-market dichotomy proved useful for the study of state banking in general and, in light of the receding trend of state banking among OECD countries, of state banking in Japan and emerging markets in particular

Capital market · Economic system · Economics · Financial market · Financial system · Globalization · Market economy · Oligopoly · Opposition (politics · Order (exchange · Political science · Politics · Sociology · State (computer science · Typology · Banking stability, regulation, efficiency · Economic Theory and Policy · Finance · Global Financial Crisis and Policies

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