This chapter sets out the analytical framework used in the book. It offers a critique of two major relevant literatures that study internationalisation and domestic institutions, namely the second image reversed approach and comparative institutionalism (historical institutionalism and varieties of capitalism). It argues that while both offer valuable elements, they pay too much attention to economic forms of internationalisation and underestimate the potential for institutional reform. Instead, the chapter offers a policy analysis approach that pays attention to policymaking at both international and domestic levels. It defines and discusses three forms of market internationalisation that are used in the study: transnational technological and economic developments; and two policy forms: reforms in a significant overseas nation (in this case, the US) and supranational regulation (by the EU). It then discusses possible mechanisms whereby these different forms of internationalisation can influence domestic decisions about national institutions.
Keywords: second image reversed, historical institutionalism, varieties of capitalism, transnational technological developments, economic developments, supranational regulation, national institutions