This article considers the challenges confronting students of political economy in the contemporary period, which can be characterized as the task of moving from the analysis of comparative statics to a more genuinely dynamic model of institutional evolution and change. It considers the strengths and weaknesses of the varieties of capitalism (VoC) and ‘pragmatic constructivist’ (PC) approaches to the study of labour market institutions and political–economic change. The article also makes the case for an alternative historical–institutionalist framework for analysing institutions and institutional change that weaves together key insights from the VoC and PC literatures, but combines these in a way that avoids both the determinism of the former and the indeterminacy of the latter. It concludes by suggesting an agenda for research.