Why are Some Countries more Neocorporatist than Others?

Where is Neocorporatism?

To say that neocorporatism is a continuum and that some countries are more and others less neocorporatist requires us to say which are the most-neocorporatist countries. In fact, there is a general consensus that the most-neocorporatist countries are Sweden, Norway, Austria and the Netherlands.5 Denmark follows somewhere close behind. Katzenstein adds Switzerland to the list.6 As we have seen, West Germany and Great Britain passed through periods in which they seemed more interested in neocorporatist approaches to economic policy, and in certain policy areas, such as health and safety at work in Britain’ or industrial training in West Germany, neocorporatist influences are evident to this day. The leastneocorporatist of the western democracies is generally agreed to be the United States, though even here some have claimed that the politics of certain industries (for example the dairy industry) can be seen as neocorporatist.

It is difficult to explain why some countries are more neocorporatist than others in a way which does not simply re-describe neocorporatism. A number of obvious explanations might also be seen as characteristics of neocorporatism.

Interest group structure might be seen as either a characteristic or a cause of neocorporatism. On the one hand, it is characteristic of neocorporatist systems that there are organisations representing economic interests that have a virtual monopoly on the claim to do so. On the other hand, the existence of strong interest groups certainly facilitates the creation of neocorporatist systems. It is much easier for a government to bargain with labour and business if each is represented by a single organisation than if there are several organisations competing for the title. It is much easier for comprehensive interest groups to make compromises on their members’ short term interests than if there are numerous interest groups; if there are numerous groups, none can be sure that a concession they make on their short-term interests in order to promote their long-term interests (eg forgoing a pay increase in order to maintain competitiveness or avoid inflation) will be matched by other groups.8 Political scientists debate whether neocorporatist systems can be created in countries where there already exist strong, monopolistic interest groups or whether strong, monopolistic interest groups can be created by the state.

The degree to which the state can create suitable interest groups where none previously existed or can help monopolistic interest groups depends in large part on the character of the state. States that are sufficiently centralised and hierarchical to be able to control which interest groups have access to policy making and which do not are more likely to create neocorporatism than states which do not. Thus one factor that would impede any attempt to build neocorporatism in the United States is the fragmentation characteristic of the state; just because the White House might want to help the Business Roundtable establish itself as the dominant business group would be no reason for other Executive branch Departments, the committees of the House and Senate or individual legislators to follow suit. Centralised systems of government are more able to create centralised interest group systems. On the other hand, the potential power of centralised systems of government to influence interest groups adversely is a powerful incentive for economic interests to unite in their defence; in purely constitutional terms, a Labour government in Britain or a social democratic government in Norway could do more to hurt business interests than could any American administration which would have to overcome resistance in the very independent legislature and courts.

Finally, political culture again both describes and helps to explain neocorporatism. One characteristic of all the mostneocorporatist countries is an emphasis on compromise in their current political cultures. In Sweden, the emphasis on the value of compromise is manifest in a long legislative process during which disagreement can be minimised. Legislation is usually preceded by Royal Commissions that, unlike their British counterparts, act as forums in which interest groups and government can compromise as well as search out the facts. After the government announces its proposals, it is common to follow the remiss procedure in which they are forwarded to all major interest groups for comment. Even during debates in the Storting, amendments are accepted much more readily than in Britain. Modern Austria (the second Austrian republic) has emphasised the value of compromise between socialists and non-socialists because of the role that violent confrontation and civil war between left and right played in the downfall of the first republic; well before the Nazi takeover in the Anschluss Chancellor Dollfuss had waged bloody conflict against strongholds of the Socialists. Modern Austrian leaders realised that they could secure the withdrawal of Soviet troops (in 1955) and maintain the independence of Austria thereafter only by compromising with each other. Compromises included long periods of coalition government (Konkordanzdemokratie) between the Socialist Party and its main rival the Ostereiche Volks Partei (OVP). Even posts within government were shared out on the basis of bureaucrats’ partisan affiliation in the proportz system. Finally, the Netherlands has a well-earned reputation for compromise reflecting the need to accommodate an almost equally balanced Catholic and Protestant population; the Netherlands is therefore seen by Lijpart as a consociational9 state in which potentially profound divisions are accommodated.

Is willingness to compromise therefore a precondition for the existence of neocorporatism? Not only is willingness to compromise a characteristic commonly found in all the most neocorporatist countries, but its absence might also help explain why certain countries are not more neocorporatist. Britain, for example, might have failed to become more neocorporatist because of the unusually adversarial style of its politics; the government proposes and the opposition responds simply by opposing to an unusual degree by the standards of western democracies.

A further characteristic of the political cultures of neocorporatist countries is acceptance of the legitimacy of functional representation — representation on the basis of one’s occupation or economic interest by an interest group rather than one’s opinions by an elected politician. Sometimes — as in Austria — it is possible to see in this acceptance of functional representation an unbroken tradition stretching back to the middle ages and the establishment of Chambers to represent occupations or trades. Indeed, the Austrian legal system continues this tradition by giving interest group leaders legal powers over their followers to a degree that their counterparts in Britain or the USA would find surprising. Austrian employers’ organisations might forbid members to give more than a certain percentage pay increase, or union leaders might forbid a strike. In contrast, one of the factors limiting the growth of neocorporatism in the United States is widespread suspicion of ‘special interests’ and profound mistrust of secret bargaining between interest groups and government officials. Such secret bargaining is a common feature of neocorporatist policy making.

Unfortunately, however, it is again difficult to distinguish causes and characteristics. Willingness to compromise and acceptance of functional representation may facilitate neocorporatism but they can also be seen as characteristic of it. It is hard to imagine how a neocorporatist system could function without a widespread willingness to compromise or acceptance of functional representation. We might instead be attracted to describing the most-neocorporatist countries as countries in which highly institutionalised solutions to class conflict have been developed. For the most neocorporatist countries generally combine high levels of working class mobilisation, as demonstrated by the proportion of the work force who vote Socialist or join unions, with great dependence on foreign trade. In Sweden, for example, over 80 per cent of the work force belongs to a union and the Social Democrats have dominated politics and government since the 1930s with only limited interruption. Yet the very high Swedish standard of living can be maintained only if the large Swedish corporations (such as Saab or Volvo) remain successful exporters. Neocorporatism is therefore a way to combine strong unions and support for such social democratic objectives as full employment and the welfare state with high degrees of dependence on foreign trade.

It might be easy to forget in a discussion of neocorporatist interest group structure that the most-neocorporatist nations have all been nations with unusually strong social democratic parties. The strength of the social democrats in Austria, Sweden, Norway and similarly neocorporatist states increased the need for employers to reach a bargain with the representatives of organised labour in the unions and the state that would protect their own competitiveness in international markets. Neocorporatism provided the framework for such bargaining. The erosion of the strength of the political parties in Austria and the social democrats in Norway raised doubts about whether neocorporatism would survive without strong social democratic parties.


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