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We advance a dynamic institution-based view of the firm that extends the theory's current focus on scope of pro-market reforms (degree of market liberalization in a given year) to consider how speed of reforms (rate of market liberalization achieved over time) affects the performance of firms from transitioning economies. Utilizing a sample of public firms from Chinese provinces with varying reform speeds, we find that while scope of reforms positively impacts firm performance, speed of reforms detracts from firm performance. We further find that while family firms have an advantage in gradually reforming provinces, non-family firms have an advantage in rapidly reforming provinces. Thus, we extend the institution-based view across time (speed of reforms) and firms (family vs. non-family firms).

We demonstrate a negative relationship between pro-market reforms and the sustainability of superior profits in an emerging economy. The decline in sustainability of superior profits shows that pro-market reforms bring significant threats in addition to the various opportunities such as greater availability of production factors and greater freedom to enter and operate businesses highlighted in the extant literature. Our study thus contributes to a more complete conceptual understanding of the performance consequences of pro-market reforms in emerging economies. We also show that investment in research and development and greater investments in marketing and advertising are firm-level resources that provide a measure of protection against the erosion in sustainability of superior profits associated with pro-market reforms.

We review the literature analyzing the impact of pro-market institutions on firms’ global strategy. We propose that the ideological tension between whether the government or the market should drive economic development results in a pendulum of pro-market reforms and reversals that drive changes in firm strategy and performance. Much progress has been made in the analyses of pro-market reforms and their impact on firms’ international strategies and performance. However, there is a need to further learn about four areas: (1) the concept of pro-market institutions, in particular the variety of institutional dimensions, the measures, and the influence of informal institutions on firm strategies; (2) the drivers of changes in pro-market institutions, especially firms’ influences and the co-evolution of firm strategies and institutional changes; (3) the implications of changes in pro-market reforms for the interactions among integration, diversification, and internationalization strategies, the causality chains connecting institutions and strategies, and the reconfiguration of activities globally; and (4) the nontraditional moderators that alter the impact of pro-market institutional dynamics on firms’ strategies, such as country-level political systems, industry-level competitor reactions, and individual-level managerial capabilities and perceptions.

We analyze how pro-market institutions affect firm performance in emerging markets. Integrating transaction costs and signaling theory, we advance three arguments. First, we separate four dynamic components of pro-market institutions: intensifying and fading pro-market reforms and intensifying and fading pro-market reversals. Second, we propose an asymmetric dynamic view whereby not only intensifying reforms but also fading reversals improve firm performance, while not only fading reforms but also intensifying reversals reduce performance. Finally, we argue that more efficient firms perform better under each of the dynamics. We test these arguments on a sample of 1092 firms from 34 emerging markets during 1998–2011.

We study how home-country factors can alter the impact of host-country conditions on the location decisions of state-owned enterprises (SOEs). Specifically, we examine the role of home-country pro-market reforms in facilitating SOEs’ entry into host countries with a free-market logic. We consider two types of home-country pro-market reforms: market liberalization and privatization. We propose that home market liberalization mainly mitigates SOEs’ market legitimacy deficit and facilitates their entry into host countries with a prominent free-market logic. In such contexts, businesses perceive SOEs from more liberalized home markets as more accustomed to market competition and thus are less likely to exert pressure on the host government against them. We also argue that furthering SOEs’ privatization mitigates SOEs’ political legitimacy deficit in host countries with a free-market logic, thus facilitating entry. In these contexts, host governments perceive more privatized SOEs as more independent from their home state due to reduced political connections. We find support for our arguments in a dataset of 97 telecom SOEs from 97 countries over the period 1990–2010. Our study advances research on SOEs’ internationalization and research on pro-market reforms and has relevant implications for managers and policymakers.

An important dimension of international comparative analysis in education is studying the models of regulation that structure the way in which educational provision is organized. The specialized literature has defined three predominant regulatory models: the traditional bureaucratic professional model, the quasi-market model inspired by neoliberal thought, and the evaluative state model linked to the notion of new public management. This paper seeks to contribute to this line of analysis by studying the evolution of the Chilean education system since 1980. We describe and analyze the models of regulation that have governed Chilean education and their expression in educational reforms and policies; we assert that Chile has adopted all three mentioned models. We also identify some of the principal consequences of these policies: a highly atomized, privatized, and socioeconomically segregated school system; an improvement in access to education and the conditions for the educational process; and an increase in learning outcomes, despite starting from very low levels and stalling during the past decade while remaining highly unequal in character. Thus, we propose some hypotheses to interpret those changes, relating them to the models of regulation as well as the policies previously analyzed. Overall, we affirm that the market and evaluative state models have achieved modest positive effects while producing relevant undesirable consequences. We conclude the paper with a reflection on the character of the particular hybridization of regulatory models developed in Chile, and the types of policy we believe should be prioritized to improve quality, increase innovation, and diminish inequity.

\"The experience of Central and Eastern Europe is unique. It is evidence of great success in demolishing the communist system and building a market economy. It is also evidence of major remaining challenges. This excellent book should be read not only by EU politicians and bureaucrats, but should serve as a manual for those who are concerned with the long-term development of their country, political pragmatists, researchers and others involved in the reform of social policy.\" Andris Berzins, former Prime Minister and Minister of Welfare of Latvia Labor Markets and Social Policy in Central and Eastern Europe summarises social policy reform during the transition and EU accession and analyses the social policy challenges which continue to face both old and new member states. Specifically, the book amplifies two sets of arguments. First, social policy under communism was in important respects well-suited to the old order and – precisely for that reason – was systematically badly-suited to a market economy. Strategic reform directions thus followed from the nature of the transition process and from constraints imposed by EU accession. Secondly, successful accession is not the end of the story: economic and social trends over the past 50 years are creating strains for social policy which all countries – old and new members – will have to face. This book will be of interest to readers interested in social policy, particularly those with an interest in the process of post-communist transition, in EU accession, and in future social policy challenges for the wider Europe. It should be of interest to academics in departments of economics, social policy and political science, and to policy makers, including government advisers and civil servants. This book is a sequel to Labor Markets and Social Policy in Central and Eastern Europe: The Transition and Beyond, also edited by Nicholas Barr (ISBN 0-19-520998-2. $US22).

Why do ordinary people engage in corruption? In Corruption as a Last Resort, Kelly M. McMann contends that bureaucrats, poverty, and culture do not force individuals in Central Asia to pay bribes, use connections, or sell political support. Rather, corruption is a last resort when relatives, groups in society, the market, and formal government programs cannot provide essential goods and services. Using evidence from her long-term research in Kazakhstan and Kyrgyzstan, McMann shows that Islamic institutions, secular charities, entrepreneurs, and banks cannot provide the jobs and credit people need. This drives individuals to illicitly seek employment and loans from government officials.

Objetivo/Contexto: A través del caso de la coalición argentina Cambiemos, dominada por el partido Propuesta Republicana (PRO), en este artículo se analizan los límites del “giro a la derecha” en un contexto de debilidad histórica de las fuerzas de tal facción política. Se estudia la relación entre las características del proceso de construcción partidaria de PRO y los alcances del desempeño reformista pro-mercado una vez en el gobierno.Metodología: Los datos provienen de una investigación sociopolítica de largo aliento que, en diferentes etapas de trabajo de campo, utilizó métodos mixtos sobre la construcción partidaria de PRO -en términos organizativos, sociológicos y programáticos- y su transformación en los años recientes, así como sobre el desempeño del gobierno de Cambiemos. Dicha investigación incluyó la realización de dos encuestas por cuestionario a cuadros partidarios, entrevistas en profundidad a una muestra de esos dirigentes, el análisis de materiales de prensa y de documentos de partido, así como la observación de actos y reuniones internas.Conclusiones: En el artículo se muestra que los bajos resultados reformistas del gobierno de Cambiemos están asociados a condicionamientos que debió enfrentar PRO para construir una fuerza competitiva en un país con derechas partidarias históricamente débiles. Estos condicionamientos son de dos tipos: internos, relativos a la estructura de la coalición política; y externos, asociados a las condiciones de origen y de desempeño del gobierno. Los primeros, observados a partir de las divergencias programáticas entre los miembros de la alianza de gobierno. Los segundos, a través de la estructura de intereses ligada a los policy legacies del período anterior; y a la debilidad del poder electoral y legislativo de Cambiemos.Originalidad: El artículo propone un esquema teórico producto de un estudio de caso, para explicar la relación entre construcción partidaria y desempeño gubernamental en casos de giro a la derecha comandados por partidos de reciente creación.

Little is known about how the dynamic process of pro-market reforms influences the performance of foreign affiliates in emerging economies and how multinational enterprises (MNEs) can deal with such a dynamic process. This study disentangles the dynamic process of pro-market reforms into three dimensions – speed, (un)predictability, and (un)synchronization – and argues that the performance of foreign affiliates suffers when pro-market reforms are slow, unpredictable, and unsynchronized. To mitigate the detrimental impacts of the three distinctive dimensions of pro-market reforms, MNEs can deploy strategies that allow their foreign affiliates to seek local help from other strongly embedded “central” organizations, subnational help from sister affiliates in other subnational regions of the same host country, and global help from parent firms. To test these arguments, this study performs a 10-year longitudinal analysis of 79,763 foreign affiliates operating in China. The results provide evidence that seeking local help is effective in mitigating the negative effect of slow pro-market reforms on foreign affiliate performance, but has no effect on the unpredictability of pro-market reforms. In addition, subnational help is as effective as global help in mitigating the negative effect of unsynchronized pro-market reforms on foreign affiliate performance.