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Whereas "international economics" may be defined as a study of the principles that bind the economies of the world together, "comparative economics" studies the principles that divide them. Economists had been mainly concerned with the former, but there is increasing recognition that economic theories need to be modified to account for the cultural and institutional characteristics that distinguish different countries and regions. Thus, the way in which markets work in western capitalist economies often differs from those that apply in Japan and other parts of East Asia. The European social-market model differs in key ways from the entrepreneurial capitalism of the US.

This book by Steven Rosefielde of the University of North Carolina is a welcome effort because it is not concerned merely with identifying and comparing different economic systems existing in the world.

It seeks also to develop a conceptual and theoretical framework for comparing these systems, as well as for assessing their relative performance. This includes the role played by culture, ethics and different political systems, which regulate the way in which individuals behave. This framework is then used to compare and contrast five types of market-based economy found in the world - those of the US, continental Europe, Japan, China and Russia. The extent of the coverage is intended to embrace what are generally regarded as the five major economic powers of the world, but it is clearly not comprehensive.

Another section deals with the methods used to compare the performance of each of these systems. The final section of the book steps, bravely, into the arena of international relations theory, addressing the question of how the harmful effects of international rivalry between each of these systems can be minimised. Each chapter finishes with a set of review questions, and the book has a useful glossary. Undergraduate students taking an option in comparative economics will find this a most valuable text for considering the issues that should dominate the study of international diversity.

Nigel Grimwade is principal lecturer in economics, London South Bank University.