Skip to main content
×
×
Home

Does the Organization of Capital Matter? Employers and Active Labor Market Policy at the National and Firm Levels

  • CATHIE JO MARTIN (a1) and DUANE SWANK (a2)
Abstract

Does the organization of business matter for social policy development in the advanced capitalist democracies? Conventional welfare state analysis has given this significant question scant attention. We argue, however, that the representational power of business, coordination across business interest units, and integration of associations in corporatist policy-making forums, or what we call the social corporatist organization of business, should result in greater support and participation by employers in social policy formation and implementation. We test our arguments with models both of 1980–98 pooled time-series data on within- and across-country variation in spending on active labor market programs and of extensive firm-level survey data from Denmark and the United Kingdom. We find that the centralization and coordination of employers as well as the integration of employer organizations in corporatist policy-making forums are strongly associated with shares of national income devoted to active labor market policy. We find, moreover, that the degree of employer organization conditions active labor market policy responses to “de-industrialization” and increases in general unemployment. At the firm level, membership in an employer association has a significant positive effect on employer participation in active labor market programs in corporatist Denmark but not in the pluralist United Kingdom.

Copyright
Corresponding author
Cathie Jo Martin is Professor, Department of Political Science, Boston University, Boston, MA 02215 (cjmartin@bu.edu).
Duane Swank is Professor, Department of Political Science, Marquette University, Milwaukee, WI 53201-1881 (duane.swank@marquette.edu).
References
Hide All
Bach Hans, and Anne-Birte Kylling. 1997. New Partnership for Social Cohesion. Copenhagen: Danish National Institute for Social Science Research.
Beck Nathaniel, and Jonathan Katz. 1995. “What to Do (and Not to Do) with Time-Series–Cross-Section Data in Comparative Politics.” American Political Science Review 89 (September): 63447.
Beck Nathaniel, and Jonathan Katz. 1996. “Nuisance versus Substance: Specifying and Estimating Time Series—Cross-Section Models.” Political Analysis 6: 136.
Block Fred. 1977. “The Ruling Class Does Not Rule: Notes on the Marxist Theory of the State.” Socialist Revolution 33 (May–June): 627.
Bowman John. 1985. “The Politics of the Market: Economic competition and the Organization of Capitalists.” Political Power and Social Theory 5: 3588.
Burgoon Brian. 2001. “Globalization and Welfare Compensation.” International Organization 55 (Summer): 50951.
Cameron David. 1978. “The Expansion of the Public Economy: A Comparative Analysis.” American Political Science Review 72 (December): 124361.
Castles Francis. 1978. The Social Democratic Image of Society. London: Routledge and Kegan Paul.
Cox Robert Henry. 1998. “From Safety Net to Trampoline.” Governance 11 (October): 397414.
Crouch Colin. 1993. Industrial Relations and European State Traditions. New York: Oxford University Press.
Danmarks Nationale Handlingsplan for Beskæftigelse 1999 [Denmark's National Action Plan for Employment 1999]. Copenhagen: Labor Ministry (May).
DiMaggio Paul, and Walter Powell. 1991. “Introduction.” In The New Institutionalism in Organizational Analysis, ed. Walter Powelland Paul DiMaggio. Chicago: University of Chicago Press, 138.
Dobbin Frank. 1992. “The Origins of Private Social Insurance: Public Policy and Fringe Benefits in America, 1920–1950.” American Journal of Sociology 97 (March): 141650.
Due Jesper, Jørgen Steen Madsen, Carsten Strøby Jensen, and Lars Kjerulf Petersen. 1994. The Survival of the Danish Model. Copenhagen: DJOEF.
Esping-Andersen Gøsta. 1996. Welfare States in Transition. Thousand Oaks, CA: Sage.
Estevez-Abe Margarita, Torben Iversen, and David Soskice. 2001. “Social Protection and the Formation of Skills.” In Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, ed. Peter A. Hall and David Soskice. New York: Oxford University Press, 14583.
Ferrera Maurizio, Anton Hemerijck, and Martin Rhodes. 2000The Future of Social Europe: Recasting Work and Welfare in the New Economy.” Lisbon: CELTA/Ministerio do Trabalho e da Solidariedade.
Geyer Robert, and Beverly Springer. 1998. “EU Social Policy After Mastricht.” In The State of the European Union, ed. Pierre-Henri Laurent and Marc Maresceau. Boulder, CO: Lynne Rienner, 20723.
Gilbert Neil. 1992. “From Entitlements to Incentives.” International Social Security Review 45 (3): 517.
Gordon Colin. 1991. “New Deal, Old Deck.” Politics and Society 19 (June): 165207.
Grier Kevin, Michael Munger, and Brian Roberts. 1994. “The Determinants of Industry Political Activity, 1978–1986.” American Political Science Review 88 (December): 91126.
Hacker Jacob, and Paul Pierson. 2002. “Business Power and Social Policy.” Politics and Society 30 (June): 277325.
Hall Peter, and David Soskice, eds. 2001. Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. New York: Oxford University Press.
Hasluck Chris. 2000. The New Deal for Young People, Two Years on. ESR41. Sheffield, UK: Employment Service (February).
Hicks Alex. 1999. Social Democracy and Welfare Capitalism. Ithaca, NY: Cornell University Press.
Hicks Alex, and Lane Kenworthy. 1998. “Cooperation and Political Economic Performance in Affluent Democratic Capitalism.” American Journal of Sociology 6 (May): 163172.
Hicks Alexander, and Duane Swank. 1992. “Politics, Institutions, and Welfare Spending in Industrialized Democracies, 1960–1992. American Political Science Review 86 (September): 65974.
Holt Helle. 1998. En kortlægning af dansk virksomheders social ansvar [A Summary of Danish Firms' Social Responsibility]. 98: 1. Copenhagen: Danish National Institute of Social Science Research.
Huber Evelyne, and John Stephens. 2001. “Welfare State and Production Regimes in the Era of Retrenchment.” In The New Politics of the Welfare State, ed. Paul Pierson. New York: Oxford University Press, 10745.
Immergut Ellen. 1992. The Political Construction of Interests: National Health Insurance Politics in Switzerland, France, and Sweden. New York: Cambridge University Press.
Iversen Torben, and Thomas Cusack. 2000. “The Causes of Welfare State Expansion.” World Politics 52 (April): 31349.
Jacobs David. 1988. “Corporate Economic Power and the State: A Longitudinal Assessment of Two Explanations.” American Journal of Sociology 93 (January): 85281.
Jensen Jane. 2002. “Social Policy and Citizenship Regimes.” Presented at the conference Transforming the Democratic Balance among State, Market and Society, Center for European Studies, Harvard University.
Kalecki Michał. 1971. “Political Aspects of Full Employment (Revised Version).” In Selected Essays on the Dynamics of the Capitalist Economy, ed. Michaˇ Kalecki. New York: Cambridge University Press, 13845.
Katzenstein Peter. 1985. Small States in World Markets: Industrial Policy in Europe. Ithaca, NY: Cornell University Press.
King Desmond, and Mark Wickham-Jones. 1998. “Training without the State: New Labour and Labour Markets.” Policy and Politics 26 (4): 43955.
Korpi Walter 1980. “Social Policy and Distributional Conflict in the Capitalist Democracies.” West European Politics 3 (October): 296315.
Larsen Mona, and Hanne Weise. 1999. Virksomheders sociale engagement [Firms' Social Engagement]. 99: 16. Copenhagen: Danish National Institute of Social Science Research.
Layard Richard, Stephen Nickell, and Richard Jackman. 1991. Unemployment: Macroeconomic Performance and the Labor Market. New York: Oxford University Press.
Lindblom Charles. 1977. Politics and Markets: The World's Political Economic Systems. New York: Basic Books.
Madsen Per Kongshøj. 2002. “The Danish Model of Flexicurity: A Paradise—With Some Snakes.” In Labour Market and Social Protections Reforms in International Perspective, ed. Hedva Sarfati, and Giuliano Bonoli. Aldershot, UK: Ashgate, 24365.
Mares Isabela. 2003. The Politics of Social Risks: Business and Welfare State Development. New York: Cambridge University Press.
Martin Cathie Jo. 1991. Shifting the Burden: The Struggle Over Growth and Corporate Taxation. Chicago: University of Chicago Press.
Martin Cathie Jo. 1995. “Nature or Nurture? Sources of Firm Preference for National Health Reform.” American Political Science Review 89 (December): 898913.
Martin Cathie Jo. 2000. Stuck in Neutral: Business and the Politics of Human Capital Investment Policy. Princeton, NJ: Princeton University Press.
Martin Cathie Jo. 2004. “Corporatism from the Firm Perspective.” British Journal of Political Science Forthcoming.
Martin John. 2000. “What Works among Active Labour Market Policies: Evidence from OECD Countries' Experiences.” OECD Economic Studies 20: 83, 85.
McConnell Grant. 1966. Private Power and American Democracy. New York: Alfred Knopf.
Mitchell Neil. 1990. “The Decentralization of Business in Britain.” Journal of Politics 52 (May): 62837.
Organization for Economic Cooperation and Development. 1994. The OECD Jobs Study. Paris: OECD.
Organization for Economic Cooperation and Development. 2001. Employment Outlook. Paris: OECD (June).
Pontusson Jonas. 1995. “From Comparative Public Policy to Political Economy: Putting Institutions in Their Place and Taking Interests Seriously.” Comparative Political Studies 28 (April): 11747.
Przeworski Adam, and Michael Wallerstein. 1988. “Structural Dependence of the State on Capital.” American Political Science Review 82 (March): 1130.
Rhodes Martin. 2001. “The Political Economy of Social Pacts.” In The New Politics of the Welfare State, ed. Paul Pierson. New York: Oxford University Press, 16596.
Rothstein Bo. 2000. Just Institutions Matter: The Moral and Political Logic of the Universal Welfare State. New York: Cambridge University Press.
Scharpf Fritz, and Vivian Schmidt, eds. 2001. Welfare to Work in the Open Economy. New York: Oxford University Press.
Schmitter Philippe. 1981. “Interest Intermediation and Regime Governability in Contemporary Western Europe and North America.” In Organizing Interests in Western Europe, ed. Suzanne Berger. New York: Cambridge University Press, 287327.
Silver Hilary. 1998. “Policies to Reinforce Social Cohesion in Europe.” In Social Exclusion, ed. Jose Figueiredo and Arjan de Haan. Geneva: ILO, 3873.
Skocpol Theda. 1995. Social Policy in the United States. Princeton, NJ: Princeton University Press.
Snape Dawn. 1998. New Deal for Young Unemployed People. Sheffield, UK: Employment Service (December).
Soskice David. 1990. “Wage Determination.” Oxford Review of Economic Policy 6 (4): 3661.
Soskice David. 1999. “Divergent Production Regimes: Coordinated and Uncoordinated Market Economies in the 1980s and 1990s.” In Continuity and Change in Contemporary Capitalism, ed. Herbert Kitschelt, Peter Lange, Gary Marks, and John Stephens. New York: Cambridge University Press, 10134.
Stephens John. 1980. The Transition from Capitalism to Socialism. Atlantic Highlands, NJ: Humanities Press.
Streeck Wolfgang. 1992. Social Institutions and Economic Performance. Beverly Hills, CA: Sage.
Streeck Wolfgang, and Philippe Schmitter. 1991. “From National Corporatism to Transnational Pluralism.” Politics and Society 19 (June): 13364.
Swank Duane. 1992. “Politics and the Structural Dependence of the State in Democratic Capitalist Nations.” American Political Science Review 86 (March): 3854.
Swank Duane. 2002. Global Capital, Political Institutions, and Policy Change in Developed Welfare States. New York: Cambridge University Press.
Swank Duane, and Cathie Jo Martin. 2001. “Employers and the Welfare State.” Comparative Political Studies 34 (October): 889923.
Swenson Peter. 1991. “Bringing Capital Back in, or Social Democracy Reconsidered: Employer Power, Cross-Class Alliances, and Centralization of Industrial Relations in Denmark and Sweden.” World Politics 43 (July): 51344.
Swenson Peter. 2002. Capitalists against Markets: The Making of Labor Markets and Welfare States in the United States and Sweden. New York: Oxford University Press.
Tabachnik Barbara, and Linda Fidell. 1989. Using Multivariate Statistics. New York: Harper and Row.
Thelen Kathleen. 2001. “Varieties of Labor Politics in the Developed Democracies.” In Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, ed. Peter Hall and David Soskice. New York: Oxford University Press, 71103.
Traxler Franz. 2000. “Employers and Employer Organisations in Europe.” Industrial Relations Journal 31 (October/November): 30816.
Traxler Franz, Sabine Blaschke, and Bernhard Kittle. 2001. National Labour Relations in Internationalized Markets. New York: Oxford University Press.
Treu Tiziano. 1992. Participation in Public Policy-Making: The Role of Trade Unions and Employer Associations. New York: Walter de Gruyter.
Visser Jelle, and Anton Hemerijck. 1997. ‘A Dutch Miracle:’ Job Growth, Welfare Reform, and Corporatism in the Netherlands. Amsterdam: Amsterdam University Press.
Wallerstein Michael, Miriam Golden, and Peter Lange. 1997. “Unions, Employers' Associations, and Wage-Setting Institutions in Northern and Central Europe, 1950–1992.” Industrial and Labor Relations Review 50 (April): 379401.
Wilensky Harold. 2002. Rich Democracies: Political Economy, Public Policy, and Performance. Berkeley: University of California Press.
Wintour Patrick, William Keegan, and Anthony Browne. 1998. “Soaring Pound Casts Doubt on Welfare Plans.” The Observer, 5 April, p. 2.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

American Political Science Review
  • ISSN: 0003-0554
  • EISSN: 1537-5943
  • URL: /core/journals/american-political-science-review
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×

Metrics

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed