Gone with the Wind? The Transformations of Corporatism in Europe

In the 1960s, the Norwegian political scientist Stein Rokkan described the functioning of the political system in his country in a manner that stood in sharp contrast with textbook descriptions of modern democracies at the time. In Norway , Rokkan argued, the most important decisions in economic policy were not taken in parliament or within political parties but at bargaining tables gathering the government, trade union leaders, farmers, fishermen, smallholders and business organisations. In these bargaining rounds which “had come to mean more in the lives of rank-and-file citizens than formal elections”, decisions were not taken by majority rule but through “complex considerations of short-term advantages in alternative lines of compromises” (Rokkan 1966: 106).

in many ways, stein rokkan 's early description of the “corporate” sphere of decision-making functioning alongside the “mass-democratic” sphere would pave the way for a whole strand of research seeking to understand how collective decisions were made outside “official” chan nels of democratic representation, such as elections and parliaments. not only in norway , but in many other countries, stabilised patterns of interaction between private organised interests and public authorities played an essential role in social regulation, from the setting of wages to the management of health systems, pension schemes and economic policy.

This chapter introduces an international dimension to the theoretical framework. I focus on European integration and its domestic politicisation as challenging factors for social concertation, and propose a set of heuristic hypotheses to explore the impact of European integration on social concertation. European integration has been seen as a major influence on concertation, yet the causal mechanisms whereby this influence takes place have stayed relatively unclear. Whereas existing scholarship has tended to posit a somewhat mechanistic relationship between them, either in the direction of a weakening or of a strengthening, this chapter explores the complex mechanisms whereby domestic politics mediates the effects of European integration on social concertation

First, European integration has become increasingly politicised at the domestic level, and the domestic adaptation to “Europe” no longer takes place in a “de-politicised” manner through technocratic or administrative procedures of macro-economic adjustment. As European integration becomes more politically salient domestically, I argue that social concertation as a political strategy can also play a role for governments to build a domestic consensus about European integration. Second, European integration and processes of internationalisation in general can also affect social concertation by reconfiguring the context of party competition (Kriesi et al. 2008). The most prominent evolution in this respect has been the emergence of right-wing populist parties capitalising on the opposition to internationalisation in all its forms (Bornschier 2010). Insofar as concertation was traditionally linked to stabilised patterns of party competition, this evolution can be believed to challenge the capacity of corporatist bargains to be translated into actual policy reforms.

Internationalisation and Social Concertation: A Prelude

Almost thirty years ago, the two seminal volumes written by Peter Katzenstein (1984, 1985) highlighted the corporatist strategies adopted by small European states to cope with international economic interdependence. The small countries he analysed – Austria, Switzerland, the Netherlands , Sweden , Norway , Denmark and Belgium – displayed the typical corporatist characteristics outlined in the previous chapter: strong cooperation between the social partners and the state in the elaboration of social and economic policies on the one hand, and strongly organised labour markets on the other. These countries, Katzenstein argued, reacted differently from bigger states to the international economic crises of the 1970s. Instead of confrontational or protectionist strategies, they opted for negotiated processes of adaptation and free trade policies.

Unemployment policy has historically been a prominent domain of cooperation between governments, trade unions and employers. In contrast to cross-border labour mobility, policy changes in this domain are generally more triggered by domestic or structural developments than by supranational market integration, and lines of cleavages between political actors may be different. This chapter presents patterns of domestic policy concertation in unemployment policy in Austria and Switzerland, and shows how the trajectory of corporatist concertation has diverged between these two countries in this field. Whereas corporatist concertation in Austria has followed a cyclical pattern influenced by the political interests of the coalition in power, it has undergone a steady decline in Switzerland due to the increasing polarisation between political parties, and the weakening of centre-right parties to the advantage of the radical right. The chapter first briefly outlines the characteristics of this policy field in general, as well as broader dynamics of reform in unemployment policy in Bismarckian welfare states. Then, it analyses concertation processes over specific reforms in both countries.

The Politics of Unemployment Policy

Unemployment policy has featured high on the agenda of mature welfare states, and even more so recently since the outbreak of the global economic crisis in 2008.

The renovation of a school in a Swedish town in 2004 was the starting point of vivid debates about how labour mobility could challenge the very underpinnings of social concertation in the European Union. In 2003, a Latvian company called Laval un Partneri won a contract to refurbish a school in the town of Vaxholm, near Stockholm. Right after Sweden opened its labour market to workers from the new member states of the European Union, Laval “posted” 35 Latvian workers who remained effectively employed in Latvia to carry out the work. The Swedish Building Workers’ Union Byggnads asked the company to sign a collective labour agreement complying with the standards of the wage agreement of the Swedish construction sector. The company refused to do so, and decided instead to conclude an agreement with Latvian trade unions, which provided for much lower wage rates. In response, the Swedish trade union resorted to industrial action by blocking access to the construction site. Unable to carry out its contract, Laval took the case to the Swedish labour court seeking reparation, claiming among others that trade union action restricted its freedom of competition and the free movement of services in the Common Market.