Institutional evolution of open and close forms of capitalism – A case of Holland and Japan

In the tradition of comparative capitalism, Japan represents a continental banking-oriented system. Holland represents an Anglo-Saxon market system. In Varieties Of Capitalism, Holland and Japan are identified as the same type of Liberal Market Economy (LME) or Coordinated Market Economy (CME). Only a dynamic view presented in this paper explains why Holland and Japan are now LMEs, as they used to be in the years 1868–1930. Holland and Japan used to be CMEs in the years 1910–1970s. The institutional equilibrium of open capitalism in Holland and close capitalism in Japan can explain periods of economic stagnation in the years 1603–2018.