Given the increased openness of countries to international trade and financial flows, the general public and the scholarly literature have grown skeptical about the capacity of policy-makers to affect economic performance. Challenging this view, Political Parties, Growth, and Equality shows that the increasingly interdependent world economy and recent technological shocks have actually exacerbated the dilemmas faced by governments in choosing among various policy objectives, such as generating jobs and reducing income inequality, thereby granting political parties and electoral politics a fundamental and growing role in the economy. To make growth and equality compatible, social democrats employ the public sector to raise the productivity of capital and labor. By contrast, conservatives rely on the private provision of investment. Based on analysis of the economic policies of all OECD countries since the 1960s and in-depth examination of Britain and Spain in the 1980s, this book offers a new understanding of how contemporary democracies work.
• Posits different economic policies linked to domestic politics, instead of converging economic policies created by globalization of economy • Offers a political-economic model to account for sources of variation in unemployment rates and inequality across America and Europe • Bridges the areas of political economy and electoral studies through a theoretical model and extensive empirical analysis
1. Introduction; 2. Political parties and the structural conditions of the economy; 3. Supply-side economic strategies in a comparative perspective (I). Public investment and the formation of human capital; 4. Supply-side economic strategies in a comparative perspective (II). The public business sector and tax strategies; 5. The social democratic project: macroeconomic stability and state intervention in Spain; 6. The political and electoral dimensions of the PSOE's economic strategy; 7. Turning around the postwar consensus: defining a new economic framework in Britain; 8. The political and electoral dimensions of the conservative economic strategy; 9. Political parties, electoral coalitions, and domestic institutions; 10. Conclusion.