This is a “big ideas” book: grand in ambition and unapologetically focused on ideas. Mark Vail aims to do no less than to bridge the subfields of comparative political economy and political theory. He makes a strong case that ideas are necessary, and not merely supplementary, to an explanation of policy outcomes. And he advocates a particular way of conceiving of ideas and incorporating them into empirical research.
In the body of the book, Vail explores the history of thought on political economy in France, Germany, and Italy throughout the nineteenth and twentieth centuries, and links these traditions to specific policy adjustments in the three countries since the 1990s. But he begins with a powerful critique of how scholars’ conceptions of liberalism can impede their understanding of liberalism in practice. Specifically, he contends that many define liberalism negatively, as a series of limits on state power. They discount the positive elements of liberalism, the construction of appropriate political and economic institutions to ensure individual freedom and market competition. And in doing so, they fail to appreciate the wide variety of liberalisms—both in thought and in practice—over time and across countries.
Vail is persuasive on this point, yet he may overstate his case with regard to political liberalism and understate it for economic liberalism. That is, most serious thinkers on political liberalism are attuned to issues of constitutional design, and conscious that different institutional configurations may be consistent with the principles of liberal democracy. When it comes to the economy, however, analysts are all too ready to view the liberal market as a single equilibrium or an institutional void defined primarily by what it is not. This not only leads them to misunderstand market liberalism in practice, but it also motivates inappropriate policy solutions, with devastating results—as Vail demonstrates (p. 209).
Vail conceives of ideas as “traditions”: lineages of thought that serve as “important lenses of interpretation and anchors of national policy responses to periods of economic uncertainty” (p. 8). By explicitly connecting his conception of ideas to particular countries’ intellectual and institutional histories, however, he renders the challenge of separating ideas from institutions all the more difficult. For example, if French leaders are less likely than their German counterparts to select policy solutions that build on partnerships with favored social groups, then how can we tell if that is because ideas channel their policy choices or because institutions constrain them?
The author does not shy from the challenge of integrating political theory into the study of comparative political economy, as he transforms into a political theorist for one chapter. He provides an illuminating yet concise review of some leading thinkers on political economy in the three countries, from Montesquieu to Raymond Aron in France, Wilhelm von Humboldt to the Ordoliberals in Germany, and Count Emilio Cavour to Luigi Einaudi in Italy. He contends that these thinkers provide “a reservoir of arguments, an index of historical continuity, and a powerful source of intellectual authority” (p. 8). This is a tough claim to substantiate, however, because not all thinkers are representative of their national traditions, and not all thinkers influence policy debates. Vail’s approach to the study of ideas contrasts with those who focus on more narrowly circumscribed policy paradigms, such as Peter Hall and his collaborators in their volume on Keynesianism (Hall, ed., The Political Power of Economic Ideas, 1989). Vail’s approach is more ambitious, but he faces a more daunting challenge in connecting his broader conception of ideas to specific policy outcomes.
Vail introduces the three national traditions in Chapter 1, and then he systematically assesses how those traditions influenced national policies in the three countries since the 1990s in Chapters 2–4. He contends that the national patterns of adjustment he describes transcend changes in parties in power and hold true across the three distinct realms examined in detail: fiscal policy, labor market governance, and financial regulation.
In France, a tradition of “statist liberalism” privileges the state as the guardian of public welfare and affirms a vertical relationship between the state and individual citizens. Since the 1990s, therefore, the government has focused on macroeconomic policies to support employment plus an expansion of social welfare programs for individuals, rather than subsidies for favored social and economic groups. The German tradition of “corporate liberalism” views social groups—such as industrial workers, strategic industries, and regional banks—as the core building blocks of social order. So the German government has favored policies that support these groups: targeted investment, protection for skilled workers, active labor-market policies, and financial policies to bolster the regional banks. And the Italian tradition of “clientelist liberalism” favors socially prominent groups and allows them to capture the state and to foster distrust of the state. Unlike their German counterparts, privileged groups in Italy—such as public-sector workers, state-owned enterprises, white-collar professionals, and regional political elites—have played a negative role, blocking reforms. Thus, France and Germany have by and large successfully adapted their liberal traditions to new circumstances, while Italy has failed to do so.
Vail does not force his cases to fit his argument perfectly, but rather presents them in their full complexity. In the process, he not only portrays the subtle interplay among ideas, interests, and institutions, but he also provides an informative review of the ways in which these three countries’ policies and institutions have evolved over the period in question. At the same time, he carefully delineates where he believes that explanations based solely on institutions and/or interests fall short, and makes the case that his approach can explain outcomes that others cannot. In my view, he is more persuasive in arguing that other approaches fall short than in proving that ideas fill the gap as the key causal variables in their own right. In some cases, for example, individual leadership might account for the unexplained residual better than ideas. That is, institutional constraints and interest-group pressures might leave considerable agency for creative leaders, who could tap the available repertoire of ideas to discover solutions and/or to sell them to the public.
The author thoughtfully explains his methodology and clearly defines his key terms, yet he shifts a bit on the critical question of the causal primacy of ideas. For the most part, he describes the role of ideas with softer terms, such as “templates,” and he is happy to combine ideas with institutions and interests to explain national policies. In the final chapter, however, he presents a far bolder claim: that even if institutions seem to explain outcomes, those institutions are in fact the products of prior ideas. “In this respect,” he concludes, “the book treats ideas as preceding institutions and organized interests both analytically and empirically and as informing and constraining their evolution in response to evolving political-economic challenges” (p. 206). This is a thought-provoking stance, but one that is not fully developed or supported.
Any study of national economic policies in contemporary Western Europe must grapple with the two-level problem: the complex relationship between national-level policies and European Union directives. Vail positions the EU as a constraint on national policies rather than as the primary driver of those policies. He rightly characterizes the EU as most constraining in fiscal policy, with financial regulation a close second and labor-market governance a distant third. And he convincingly argues that large countries such as France and Germany are not just policy takers at the EU level: They also have some influence on EU policies, and their national traditions shape how they attempt to push EU decisions.
If Vail wants to highlight the tension between liberal and illiberal elements within European countries, however, perhaps he should incorporate the EU into his model in a more central way. That is, the EU is itself a major driving force for economic liberalism, which builds on multiple liberal traditions. So ultimately, Vail might want to add a deeper analysis of the tension between EU liberalisms, on the one hand, and national liberalisms and illiberalisms, on the other.
A book this ambitious is bound to raise as many questions as it resolves. Yet Vail succeeds admirably with his core goals. First, he persuasively argues that ideas help to account for policy outcomes in ways that institutions and interests alone cannot, and that they do so across the three issue cases within his three country cases. Second, he offers an important rallying cry for the subfield of comparative political economy. He challenges us to reconnect with political theory, and to give ideas a more prominent place in our analysis.
