"During the last 30 years or so, different theoretical and empirical perspectives have come to see economies as embedded in institutional, social and cultural structures. Such perspectives developed in contrast to the neoclassical economic paradigm of a rational actor isolated from his/her social and cultural context, as well as to sociological functionalism, which sees economic action as heavily determined by values and social–structural factors. The general idea behind these perspectives is that economic action is always shaped by institutions rooted in history, and by the structures of social relationships in which economic actors are embedded; with the consequence that the former cannot be explained without including the latter in the explanation. This article shows how this perspective is shared by the ‘comparative political economy' approach, which developed starting in the 1970s especially in Western Europe, and the ‘new economic sociology' approach, which developed a decade later in the United States.After reviewing the main features of both approaches, the article shows how Italian economic sociology has built a relevant research tradition. More specifically, it reviews the main contributions that this ‘school' has given to our understanding of how modern capitalist societies work, especially regarding labour markets, welfare systems, local economies and industrial relations. The lack of a strong dominant and unifying paradigm has often been seen as a weakness of Italian economic sociology, as well as of economic sociology tout court. Yet this weakness has to some extent been turned into an advantage, since Italian economic sociologists have been more willing to cooperate with scholars in other disciplines and sub-disciplines and have also been more interested in entering new territories, from both a theoretical and a substantive point of view."

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