The purpose of this book is - in the words of the authors themselves - to make a contribution to the emerging field of political economy. Political economy is defined as the study of how politics and economics are interrelated. This very broad definition, however, is specified by five methodological preconditions for a new political economy starting from the traditional field of comparative politics and moving towards a theory of politico-economic interaction:

- The new field of political economy should bypass short-run political economy
models and focus on long-run developments.

- It should recognize the relevance of middle range theories and abandon the hope
for a general theory of political development.

- It should emphasize the need for genuine comparative analysis and differentiate
itself from case-study analysis.

- It should underline the emptiness of theory without data and the blindness of
data without theory, and should do a great deal to conduct systematic empirical
inquiry into both economic and political development.

- And last but not least, it should describe political regimes and public policy in terms of institutions and institutional effects on economic growth and affluence, departing from traditional comparative politics and its focus on rules or constitutions descriptive economics.

In fulfilling their purpose, Lane and Ersson review an impressive body of literature in the field of comparative politics including even very recent publications. The authors, however, are provoked by a far greater challenge than to bring an encyclopaedic description of old and new concepts and theories. While these are used to pinpoint methodological preconditions for a 'modern political economy', they also serve as an abounding reservoir of unanswered questions and unquestioned hypotheses - to be challenged by applying quantitative techniques to explore similarities and differences between economic growth and political democracy in different politico-economic regimes. One of the many bold questions raised in this connection is: if it is true that capitalism in the 1980s performed better than socialism then performance data would tend to differ between regimes with regard to average performance scores. Right or wrong? To answer this question one hundred countries from the four continents are classified, using five categories of regimes: capitalist (e.g. USA and Japan), capitalist-state (e.g. India and Spain), mixed-capitalist (e.g. Denmark and West Germany), and socialist (the Soviet Union and Yugoslavia). The average performance scores of the countries are then compared (1980-85) according to the level of affluence, economic growth, democratic rights, welfare efforts and income inequality, and to quote from the results:

- The mixed capitalist systems tend to perform better on all evaluation criteria than
the other regimes.

- The socialist regime and the capitalist-state type tend to lag behind the other two
types of capitalist regimes, in particular on the average level of affluence measured
by the GDP/capita indicator.

- And one brand of capitalist regime - capitalist-state - performs as badly as the
socialist regime.

In sum, there are straightforward examples of failures among socialist as well as centralized and decentralized capitalist regimes. But it is the small and open, politically stable mixed-capitalist countries which tend to score highest on average performance scores.

Obviously, results from such a preliminary analysis ought not to be taken too seriously. Many methodological questions are overwhelming, just as quantitative analysis per se cannot account for a middle range theory on the interaction between economic and political development within or between politico-economic regimes in the world. Nor do the authors make any pretension that they can. On the other hand, by applying quantitative techniques to falsify traditional beliefs of interrelations between polity and economy and between politico-economic regimes, they incite further comparative research as well as area- and regime specific investigation into the interrelation between economy and polity. So, one of the very positive results of the comparative analysis carried out by Lane and Ersson is the recognition of the obvious need for more refined comparative analysis to measure the partial impact of various factors on similarities and differences between regimes, as well as the need for more detailed theoretical models of how single regimes have developed country-specific institutional arrangements, making it possible to explain economic growth rates, levels of economic affluence, conditions for democratic regimes and public welfare spending.

One of the main results of such country-specific studies already seems obvious. Namely, a more refined typology of models of economic allocation and redistribution the standard crude dichotomy of market vs. mixed economies used in this book. Reading the extensive description - in this as well as in a growing number of books on political econony - of how market economies during the 1940s and 50s have developed into mixed economies, one cannot but be surprised by the lack of genuine interest in questions on how in particular mixed economies during the last 20 years of economic crisis have developed mechanisms for allocation of resources and redistribution of income based not on budget allocation, government authority, public planning and public spending but on far more complex institutional arrangements for negotiated allocation, semi-public and private authority, incremental reform-making and public-private spending. While being very sensitive to recent changes in both the East European nations and the states in the Third World, the authors seem blind to how capitalist, capitalist-state and mixed-capitalist countries have reacted to the economic crisis and adapted to the advance of a global economy. Further comparative research could very well be organized around questions concerning:

- How capitalist regimes have reaccted to the crisis and adapted to the global
economy. But also

- How features characterizing mixed economies in this process are changed into something which is far more complex and in some (Scandinavian?) cases can best be described as 'negotiated economies' (Pedersen 1991; Nielsen & Pedersen 1991; Jessop et al. 1991).

These remarks, however, ought not to hide the fact that this book is a must for
everyone teaching elementary political economy. I can think of hardly any other
book - in the field and at this elementary level - that draws together so much valuable

information, asks as many important questions and raises as many methodological problems as this one does. The book is plainly written, well arranged and contains an extensive list of references. Its greatest achievement, however, is that it brings all this information together and asks these questions with such a sound scepticism against traditional beliefs and raises so many methodological questions that it is bound to prompt any new reader to further reflection and study.

Copenhagen Business School

REFERENCES

Jessop, 8., Nielsen, K. & Pedersen, O. K. 1992. 'Structural Competitiveness and Strategic Capacities: Rethinking State and International Capital', in Sjöstrand, Sv-E., ed., Institutional and Change. Theory and Empirical Findings. New York. Nielsen, K. & Pedersen, O. K. 1991. 'From the Mixed Economy to the Negotiated Economy - the Scandinavian Countries', in Coughlin, R. M., ed., Perspectives on Socio-Economics 1990. New York.

Pedersen, O. K. 1991. 'At First they were Two, then Three and now Four. Generalized Political Co-Operation in Modern Danish Political History', in Kassalow E. M., Tripartite Consultation and Cooperation in the Making of National Economic and Social Policy. ILOreport,