The purpose of this article is to explore the relationship between the social systems of innovation and 'comparative institutional advantage', by examining the way political economists explain the correlation between institutional arrangements and sectoral systems of innovation. First, we shed some light on the contributions of the organizational and institutional approaches to innovation in the 'regulation' approach (B. Coriat and O. Weinstein). They clarify the double nature and dimension of institutions: 'rules of the game' and 'tangible resources'. Secondly, they emphasize three series of institutional arrangements related to radical or incremental innovation: intellectual property rights regimes, corporate governance and the financing of innovation, and the industrial relations and educational systems. Third, we find that they discuss both the 'complementarities' between three different institutions, and relative institutional advantages for industrial sector, and then they present the two 'ideal type' models: POE model (patent/outsider control/external labor market) and OII model ('open knowledge'/insider control/internal labor market). Moreover, they argue the sectoral relevance of such contrasting models. Finally, the 'Varieties of Capitalism' approach (S. Casper and D. Soskice) also explore the relationship between institutional frameworks and firmlevel strategies, and find out, based on case studies aiming at recent institutional changes, the opposite patterns of 'subsector' specialization in Germany and the United Kingdom.