Paradigms, Regimes and the Shifting Notions of Institutional Best Practice

A bird’s eye view of the debate on institutional systems and economic development the last 15–20 years reveals that has moved
in cycles. Assumptions of what are the better functioning institutional underpinnings of economic growth and welfare have
fluctuated; from the praise of European and Japanese ‘coordinated’ varieties of capitalism in the early 1990s to claims that
only liberal institutional configurations are conducive to growth in the ‘New Economy’.

This chapter broadens the debate byincorporating two concepts from innovation studies, namely (a) different technological regimes, and (b) different technological
paradigms. It argues that different institutional configurations reveal their inherent strength and weaknesses during different
phases of large-scale technological change, and that this causes notions of best practice to shift with it. Theoretical arguments
are based on the post-war development and structural change in the US economy, and illustrated using R&D, trade, and employment
statistics.