John S. Ahlquist and Christian Breunig - MPIfG.pdf

MPIfG Discussion Paper 09/5 Country Clustering in Comparative Political Economy John S. Ahlquist and Christian Breunig John S. Ahlquist and Christian Breunig Country Clustering in Comparative Political Economy MPIfG Discussion Paper 09/5 Max-Planck-Institut für Gesellschaftsforschung, Köln Max Planck Institute for the Study of Societies, Cologne May 2009 MPIfG Discussion Paper ISSN 0944-2073 (Print) ISSN 1864-4325 (Internet) © 2009 by the author(s) John S. Ahlquist is a Postdoctoral Fellow at the Institute for Research on Labor and Employment, University of California Los Angeles. Christian Breunig is an Assistant Professor at the Department of Political Science, University of Toronto. jahlquist@ c.breunig@utoronto.ca MPIfG Discussion Papers are refereed scholarly papers of the kind that are publishable in a peer-reviewed disciplinary journal. Their objective is to contribute to the cumulative improvement of theoretical knowl- edge. The papers can be ordered from the institute for a small fee (hard copies) or downloaded free of charge (PDF). Downloads www.mpifg.de Go to Publications / Discussion Papers Max-Planck-Institut für Gesellschaftsforschung Max Planck Institute for the Study of Societies Paulstr. 3 | 50676 Cologne | Germany Tel. +49 221 2767-0 Fax +49 221 2767-555 www.mpifg.de info@mpifg.de Abstract In the comparative political economy of rich democracies there is a long tradition of classifying countries into one of a small number of categories based on their economic institutions and policies. The most recent of these is the Varieties of Capitalism project, which posits two major clusters of nations: coordinated and liberal market economies. This classification has generated controversy. We leverage recent advances in mixture model-based clustering to see what the data say on the matter. We find that there is considerable uncertainty around the number of clusters and, barring a few cases, which country should be pla