Neocorporatism Meaning in business politics World


One of the liveliest topics in comparative politics since the mid-1970s has been neocorporatism. The topic is of considerable importance for the study of the relationship between business and politics. Does neocorporatism offer a successful alternative mode of linking government and economic interests, particularly business? Or is neocorporatism a relationship between government and economic interests that can exist in only a limited number of countries? This chapter considers a number of questions including what is neocorporatism, where it is found, what the conditions are for its existence, what the economic record has been of countries where neocorporatism is practised and what the future holds for neocorporatism.

As we have seen in Chapter 1,. neocorporatism is a system of interest intermediation in which organisations representing the major interests in society — in practice business, labour and frequently farmers enjoy —a monopoly of representation which is recognised and encouraged by the state.3 The interest groups involved in neocorporatist relations are given excellent opportunities to influence public policy; indeed, the economic interest groups involved in such relations are often able to engage in something more like bargaining than consultation in their dealings with government. At least in certain policy areas, the government will not act in a way that is unacceptable to the major economic interest groups. For their part, the economic interest groups accept a responsibility to help government implement policies, often acting to free government from the obligation to do something itself. Interest groups may help government by running training programmes, by promoting exports or by encouraging compliance with government regulations or policies to protect the environment or safety or health. One of the most important obligations of interest groups in countries in which neocorporatism has been strongest has been to implement incomes policies designed to avoid inflation or the loss of competitiveness in foreign trade.

Although this definition covers the core of neocorporatism, many questions remain. The first is the problem of what issues are covered in neocorporatism. Neocorporatism generally covers economic issues. But the nature of bargaining between interest groups and government in neocorporatist systems has been such that the scope of bargaining widens. Typically, unions have agreed to restrain wage demands in return for increases in the ‘social wage’ of government expenditures on welfare, retirement pensions, health care, education and other domestic policies that unions believe will benefit those they represent. If we believe that an entire political system is neocorporatist, we should have to demonstrate that the most, or at least the most important, issues are made through neocorporatist discussions between government and economic interests. Such a claim should ideally also show that discussions between government and interest groups are more important than the impact of other parts • of the political system such as political parties, the bureaucracy, elections, or legislatures.

It is very hard if not impossible to substantiate such claims for many policy areas in most democracies. At most, industrial or economic policy is made in a neocorporatist manner while other issues such as foreign policy are handled in a different manner. In consequence political scientists attracted to the concept of neocorporatism have modified their arguments in a number of ways. One way is to accept that only certain issues are handled in a neocorporatist manner in any country. However, the issues handled within a neocorporatist framework might be seen as the central or crucial problem of the modern state — managing the political economy. A second response is to argue that we should look for neocorporatist relations at a different level; failing to find neocorporatist relations linking government as a whole with organisations representing employers in general and a labour union federation, we should look instead at the level of the individual industry. Neocorporatist relations linking a section of a government department, a particular union and a trade association representing employers might flourish where no such relations exist at the national level. Such a situation would be termed `meso-level corporatism’. Unfortunately, it is a less interesting finding than neocorporatism offered initially, leaving unanswered the questions of whether meso-level neocorporatist relations are typical or atypical of the entire economy, and how the relations between different industries are managed. Finally, we can understand neocorporatism to be not an absolute situation but a continuum; countries are more or less neocorporatist. Even the most-neocorporatist countries will have some policy issues that are handled in a non-neocorporatist manner; even the least-neocorporatist countries will handle some issues in somewhat neocorporatist style. This is the approach used in this article.


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