Corporatism Research Paper

1. Prehistory Of The Concept

The concept of corporatism (or ‘corporativism’) initially designated institutional blueprints for ‘functional representation’ of organized interests as they throve since the late nineteenth century. Responding to the growing intensity of social conflicts between capital and/organized labor, conservative as well as socialist authors propagated the representation of interest groups by organizations with compulsory membership and their insertion into an institutional framework for peaceful conflict regulation. Among the influential proponents of a ‘corporative order’ were Catholic social theorists whose ideas found their expression in the papal encyclicals Rerum No arum (1891) and Quadragesimo Anno (1931). The concept was also endorsed by conservative and fascist ideologues who proposed the replacement of representative parliamentary democracy by a ‘corporative state.’ It served as a basic institutional formula in the authoritarian regimes of Mussolini, Franco, Salazar, and Petain (though not in Nazi Germany) and thus had for a long time a distinctly antiliberal and antidemocratic connotation. Similar corporatist features were also introduced in some authoritarian regimes of Latin America (Brazil, Argentina). But in the 1930s, corporatist ideas were advocated even in some liberal parties (e.g., in Switzerland).

The concept acquired a new—and this time explanatory rather than prescriptive—significance since the economic crisis of the 1930s, and notably in and after World War II (in the context of the management of shortages in the war and postwar economy). At that time, institutionalized forms of cooperation between governments and/organized interests were observed in a number of democratic countries, especially in Western Europe. Often associations choose voluntary cooperation (notably in wage policy) in order to avoid dirigiste interventions of government. Subsequently such ‘social pacts’ acquired increasing importance as an instrument of Keynesian macroeconomic policy. Among the social scientists who pointed to the resemblance between these practices and some aspects of the ‘corporativist’ designs of the interwar years one of the first was Shonfield (1965), later followed by political scientists (also Lehmbruch 1974 and in particular Schmitter 1974) who developed the typo-logical distinction between ‘state corporatism’ and ‘societal corporatism’ (or ‘authoritarian’ vs. ‘liberal’ corporatism). What distinguished these ‘neocorporatist’ arrangements from their forerunners was both their more or less informal character and the complete absence of an underlying articulate doctrine. Nowadays the terminological convention of social scientists most of the time ignores the prehistory and employs the term ‘corporatism’ for these new organizational patterns.

2. Typological Approaches To The Study Of Corporatist Interest Intermediation

Political scientists employed this more recent version of the concept of corporatism to explain empirical observations that did not square with the established interpretation of interest politics often called ‘pluralist.’ In the tradition of the ‘group approach,’ political interest groups were defined as ‘shared attitude groups that make claims upon other groups in the society,’ eventually ‘through or upon any of the institutions of government’ (Truman 1951, p. 37), and hence the ‘access’ of interest groups to government (or, with a somewhat pejorative connotation, ‘pressure politics’) was a key analytical question. However, such an approach was not particularly suited to explain the emergence, in different countries, of ‘social contracts’ between government and/organized interests for voluntary incomes policy as an instrument of Keynesian economic policy. Since in these instances government was making claims upon interest groups the vectors of influence were inverted.

Generalizing from such observations, the concept of corporatism describes a type of policy formation where organized interests are encouraged to (explicitly or preemptively) coordinate their activities with government and to foster its policy objectives. Thus the analytical problem is not access but a process of exchange in which interest associations pledge organizational compliance and are often rewarded with specific organizational privileges. As a complementary terminological consequence of this theoretical re-orientation of interest group research, the established notion of ‘interest representation’ was substituted by ‘interest intermediation’ (Schmitter 1979, p. 93, end-note 1).

A corporatist exchange relationship between government and/organized interests tends to benefit from specific structural properties of organizations. In Schmitter’s well-known definition of corporatism, a limited number of associations enjoy a monopoly in the representation of specific interests, membership may be compulsory, and leadership is clearly centralized. This enables a corporatist association to obligate the organization in its relationship with government and other associations and permits the government to hold it responsible for obtaining the compliance of the membership. Pluralism, on the other hand, is characterized by a multiplicity of associations that may compete for turf in representing specific interests, in which membership is voluntary, and leadership positions may be subject to internal contestation. A crucial element of Schmitter’s influential contribution was thus the conceptualization of ‘corporatism’ as one building block of a comparative typology of organized interests.

From the original fourfold typology with its strongly deductive flavor, subsequent research has only retained the distinction of ‘corporatism’ and ‘pluralism,’ while the constructs of ‘monism’ and ‘syndicalism’ turned out to be of limited relevance for empirical research. In this typology, ‘pluralism’ carries a specific connotation derived from earlier US research on interest associations. In particular the emphasis of the ‘group approach’ (as it was developed by David Truman 1951) on society as a ‘mosaic of overlap-ping groups of various specialized sorts,’ with an inescapable ‘proliferation of associations’ that may eventually split and compete among each other’s, formed a striking contrast not only to the organizational monopolies of older ‘state corporatism’ but also to the all-encompassing ‘peak associations’ of some European democracies.

The concept of ‘corporatism’ should not be construed as an alternative to the theory of ‘pluralist democracy’ or ‘polyarchy’ with which it is, on the contrary, largely compatible. Rather, the typological distinction from ‘pluralism’ aimed specifically at modifying the ‘pluralist’ paradigm of interest group politics: ‘pluralism’ was no longer treated as a general paradigm but rather as a special type of interest group activity. The swift adoption of the typology in political science was not least due to its innovative contribution to comparative empirical research, where it facilitated the development of measurement concepts that so far had largely been missing.

2.1 The Measurement Of Corporatism

In empirical research, the constructs of corporatism and pluralism should be considered as extreme types permitting the location of individual cases on (nominal or ordinal) scales. The typology has served not only to describe individual associations but also the structure of ‘interest systems’ (Schmitter 1979) of whole countries. Indeed, within particular countries the organizational properties of the most important associations and of their relationship with government and among each other are often characterized by a considerable degree of ‘organizational isomorphism’ (as defined by DiMaggio and Powell 1991). The location of countries on a corporatism scale has, in particular, become a preferred instrument of comparative research on public policies for the investigation of the impact of structures of interest intermediation on policy out-comes.

Operationalization of these typological constructs is subject to the availability of standardized indicators and data. The degree of organizational centralization of labor unions or of the collective bargaining system are most easy to observe and have in particular been employed by economists focusing on the impact of collective bargaining on macroeconomic performance (Calmfors and Driffill 1988). To describe more complex patterns of interest intermediation, some political scientists have preferred to elaborate multidimensional indexes for measuring the strength of corporatism in specific countries, focusing either on associational properties (Schmitter 1981) or on associational participation in policy making (Lehmbruch 1984).

3. Macrocorporatism And Mesocorporatism

Corporatist arrangements have been observed mostly in industrial relations, be it on the national level (macrocorporatism) or on the level of industries (mesocorporatism). But they are also found in other policy domains, such as the social security system or agricultural policy (sectoral corporatism).

3.1 Macrolevel Concertation And ‘Social Pacts’

As a pattern of policy formation, corporatism was originally largely tantamount to macrocorporatism, defined as an interorganizational arrangement in which the national peak associations of business and labor coordinate their autonomous policies through central-level bargaining, with government being often (at least informally) involved in tripartite ‘social pacts.’ Although the degree of formalization can vary, their central objective is always the consensual coordination of wage setting across the economy, as a decisive contribution to the pursuit of macroeconomic goals such as monetary stability, employment, and economic growth. Such ‘concertation’ (a term derived from the French economie concertee) might also include connected areas such as labor market or tax policy. Up to the 1970s, corporatist concertation was mostly found in the European welfare states with a strong social-democratic tradition, and for a considerable period they succeeded, under the conditions of Keynesian macroeconomic policy, to neutralize the trade-off between economic stability and high employment.

When the objective of full employment was increasingly put into question and Keynesian economic policy was abandoned it was often assumed that, as a consequence of the decline of macroeconomic policy, peak-level concertation would become redundant. In particular it was believed that the monetary instruments available to central banks after the end of fixed exchange rates might be powerful enough to induce spontaneous wage restraint. And when in the 1980s highly centralized bargaining systems were abandoned in several countries this was interpreted as a crisis of macrocorporatism. But subsequent research has maintained that under specific conditions corporatist wage bargaining has remained successful in macroeconomic stabilization.

In Europe, moreover, speculative predictions about the demise of corporatism were challenged by the emergence of a new generation of ‘social pacts.’ This new type of concertation aims at a negotiated reorganization of welfare state policies, notably of the old-age pensions systems and health policy. In this context, coordinated wage policies have remained important because of the interdependence of wages, nonwage labor costs, and employment. But whereas central tripartite negotiations remain the prevailing forum for the conclusion of social pacts about consensual welfare reform, the macrocoordination of wage policy is not necessarily identical with centralized peak-level wage- setting because there are also decentralized forms of coordination that may even yield superior effects (Soskice 1990).

3.2 Mesocorporatism

The participation of associations in the governance of particular industries has been termed mesocorporatism. This covers quite different phenomena: It includes the participation of organized labor and business in the management of industrial crises where government support may be vital (e.g., steel or mining), but also self-regulation by associations that have often been granted binding powers (‘private interest government’). Associational participation in the governance of markets is particularly found in agriculture. In manufacturing industries, standard setting is another well-researched field of corporatist ‘private interest government.’ Moreover, in a number of European countries sectoral corporatism is also found in policy domains such as social security or health policy.

4. Cross-National Distribution And Longitudinal Trends

The strength of corporatism varies longitudinally as well as cross-nationally. Variations across time have been the object of many speculations: in the 1970s some authors predicted a secular trend toward corporatism in industrial democracies, whereas in the following decades observers frequently detected a general decline of corporatism. In cross-national empirical research we are on much firmer ground, and the well-established result is considerable variability of the strength of corporatism across industrialized countries. The acknowledged examples of ‘interest systems’ characterized by strong corporatism are those of Austria, the Netherlands, and the Scandinavian countries; whereas Germany has weaker corporatism, and the USA is clearly characterized by a dominantly ‘pluralist’ system of interest intermediation. These differences have, in the majority of cases, been relatively stable since the end of World War II and can quite often be traced back to the emergence of modern interest organizations in the late nineteenth and early twentieth century.

However, as far as the countries with strong corporatism are concerned certain trends can indeed be observed. In specific phases, notably in situations of crisis, an older pluralism of interest associations was increasingly superseded by organizational monopolies for the most important associations. The war economy of the two world wars, the world economic crisis of the 1930s, and the economic reconstruction after World War II have contributed most to these developments. While theories of the transformation of the political economy of highly developed industrial societies (e.g., ‘organized capitalism’) have often overlooked these institutional variations across nations, research on corporatism suggests the existence of a contingent plurality of development paths due to specific historical circumstances. Thus, corporatism was more likely to emerge where premodern forms of interest organization (such as corporations and guilds) have been able to survive and transform themselves instead of being destroyed in the transition to a capitalist market economy. Also, different ‘state traditions’ are characterized by different approaches to the inter-mediation of interests (Crouch 1993). Among others, corporatism appears to be strongly related to con-sociational or ‘consensus democracy.’

5. Beyond Corporatism: Comparative Political Economy And Public Policy

5.1 Effects Of Corporatism And Composite Models Of Coordination In Market Economies

Comparative research on the effects of corporatist interest intermediation on macroeconomic performance and income distribution seems to indicate that macrocorporatism contributes to low unemployment and to lower levels of income inequality. However, the relationship with inflation rates seems to vary over time. Recent research in the policy performance of macrocorporatism has increasingly come to adopt more complex models in which the structure of interest intermediation is assumed to interact with other variables. Such conceptualizations distinguish different production regimes (Hollingsworth et al. 1994) or the coordinated vs. uncoordinated (or liberal) market economies (Soskice 1990). In particular, effects of corporatism on macroeconomic performance are better explained if the interaction with central bank independence is taken into account (Iversen and Pontusson 2000).

5.2 Corporatism And The Borders Of State And Society

The emphasis of corporatist theory on the contribution of interest associations to the pursuit of collective goals has raised the question whether the traditional dichotomy of ‘state’ and ‘society’ could still be used as an adequate conceptual framework for the analysis of public policies in highly developed industrial democracies. This has led to the replacement of the traditional image of a hierarchical sovereignty of the ‘state’ by notions such as governance, understood as ‘all those activities of social, political and administrative actors that can be seen as purposeful efforts to guide, steer, control or manage (sectors or facets of) societies’ and where public and private actors work in ‘co-arrangements’ (Kooiman 1993, p. 2). Corresponding notions employed in European social science are Steuerung in the German, or regulation politique in the French literature. Research on policy networks has developed more rigorous analytical instruments to compare corporatist to other patterns (Knoke et al. 1996).

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