Varieties of Hierarchies and Markets: an Introduction

The paper presents both a theoretical and an empirical argument that the concept of hierarchy needs to be reconceptualized. In our theoretical discussion we develop a synthesis between Coase's and Williamson's conception of a market/hierarchy dichotomy and Weber's distinction between economic power and authority. We hold that the authoritative aspects of bierarchies, especially within networks of firms, have independent effects on the formation of market economies. We empirically demonstrate the relevance of this reconceptualization in an analysis of the economics of South Korea and Taiwan. With these cases, we show that two different types of authoritative interfirm networks, one vertically and the other horizontally arranged, substantially shape the performance of these economies.