CAPITAL UNBOUND - THE TRANSFORMATION OF EUROPEAN CORPORATE GOVERNANCE

This article represents a first attempt to analyse the forces at work in the transformation of European corporate space, at both the nationa l and supranational levels. In doing so, it consciously combines a com parative with an international political economy perspective and argue s against analyses which minimize the role of domestic institutions an d understand the contemporary transformation of European capitalism so lely in terms of globalization-driven, neo-liberal convergence. After discussing the existing variety of Europe's national capitalisms, we a rgue that a number of mechanisms are inducing change - competitive pre ssures on producers; the liberalization and integration of financial m arkets; the growing role of international actors; and the equally pote nt role of non-economic domestic actors in internalizing external pres sures. We analyse their effects in three critical areas: corporate gov ernance, especially in terms of the balance of power between 'stakehol ders' and shareholders; the relationship between the 'public' and 'pri vate'; and the balance between capital and labour in the 'networked' ( and especially the 'Germanic') systems. Despite these common pressures , we argue that although the differences between national systems will be modified in a market-liberal direction, this will not result in co nvergence for the following reasons. Domestically, elites will not pro mote change to a degree where it will undermine their own power and po sitions; path dependence and the lock-in effects of historical develop ment create formidable pressures for continuity; and competitiveness w ill depend on the adjustment rather than abandonment of those structur es and policies which have delivered efficiency in the past. As far as external pressures are concerned, international competition and the i mplementation of European monetary union are as likely to reinforce ex isting relationships as they are to break them down, while the creatio n of a new regulatory environment for European capitalism linking supr anational with national rules still permits considerable scope for div ersity.