Varieties of capitalism and local outcomes: A Swedish case study

Despite the ‘institutional turn’ in economic geography, relatively limited attention has been paid to the comparative political economy literature that investigates the institutional underpinnings of the different versions of capitalism that we observe in the world. In turn, this literature has shown little interest in variety within national models of capitalism, an issue more often tackled by economic geographers. This paper asks if the Varieties of Capitalism (VoC) framework of Hall and Soskice is a useful tool for investigating institutional disparity within national models, and if it can indicate deviation from national or sectoral norms that may provide insights into the success or failure of local clusters. It applies the framework to two Swedish furniture locations — Tibro and Virserum — that together dominated the industry in the mid-1940s. Today, Tibro maintains its leading position whereas Virserum has been wiped off the map in terms of furniture production. The paper finds that applying the framework in this rather unorthodox manner does indeed paint a more nuanced picture of a rather coherent Swedish institutional system, and that there is varying scope for local creativity among the predetermined institutional spheres of VoC. In particular, the paper illustrates how local outcomes of national systems may differ across space, depending on particular configurations of institutional and non-institutional factors at local and sectoral levels playing themselves out against national developments.