The dynamics of neo-corporatist regimes in the
age of the European regulatory state:
Telecommunications liberalisation in Belgium and the Netherlands
Jasper P. Simons
6043364
Master Thesis Political Science: International Relations
Research Project: Global Politics of Investment and Trade
Supervisor: prof. dr. J. W. J. Harrod
2
ndreader: dr. O. H. Holman
Word count: 28.118 (excluding footnotes, etc.)
24 June 2015
Social history in the nineteenth century was thus the result of a double movement: the extension of the market organization in respect to genuine commodities was accompanied by its restriction in respect to fictitious ones. (…) Society protected itself
against the perils inherent in a self-regulating market system – this was the one comprehensive feature in the history of the age.
K. Polanyi, 19441
1 Polanyi, K. (1944), The Great Transformation: the political and economic origins of our time, 2nd ed.,
- Table of Contents -
List of Abbreviations p. 6
Introduction p. 9
Chapter I: Theoretical Framework p. 15
1.1: New Institutionalism: structure vs. agency and historical context p. 15 1.2: New Institutionalism: an eclectic and flexible approach p. 17 1.3: Comparative political economy: ideal-types and change p. 20 Chapter II: Conceptualising the Regulatory State and Neo-Corporatism p. 25
2.1: The regulatory state p. 25
2.2: Neo-corporatism: empirical and theoretical evolution p. 27
2.3: Neo-corporatism: a contemporary definition p. 31
Chapter III: Research Design and Methodology p. 33
3.1: Objective and design p. 33
3.2: Case selection and justification p. 34
3.3: Qualitative content analysis p. 36
3.4: Data collection p. 37
Chapter IV: EU Legislation and Domestic Liberalisation p. 39 4.1: EU legislation: towards complete liberalisation (ca. 1966-1998) p. 39 4.2: EU legislation: review and the Telecom Package (1998-2009) p. 44
4.3: Belgium: legislation and market performance p. 47
4.4: The Netherlands: legislation and market performance p. 49
Chapter V: EU Impetus and State Agency p. 52
5.1: Belgium: weak legislative performance p. 52
5.2: Belgium: conflict and adjusted tactics p. 53
5.3: The Netherlands: strong legislative performance p. 55 5.4: The Netherlands: agreement but occasional conflict p. 56 Chapter VI: Parliamentary Dynamics and the Legislative Process p. 59 6.1: Belgium: containing liberalism and conserving neo-corporatism (1988-1992)p.59 6.2: Belgium: towards the regulatory state (1992-1999) p. 62 6.3: Belgium: the liberal push, yet path-dependency and coalitions (1999-2008) p. 65 6.4: The Netherlands: transformation without social partnership (1983-1989) p. 71 6.5: The Netherlands: market desirability and full privatisation (1989-2000) p. 76 6.6: The Netherlands: continuity despite turmoil (2000-2007) p. 79 Chapter VII: Social Partnership Institutions and Trade Union Agency p. 82
7.1: Belgium: sectoral corporatist framework p. 82
7.2: Belgium: social partner inclusion and consensus p. 84
7.3: Belgium: trade union power play p. 86
7.4: The Netherlands: sectoral corporatist framework p. 89 7.5: The Netherlands: trade union marginalisation (1983-1989) p. 91
7.6: The Netherlands: trade union inactivity (1990-2008) p. 93
Chapter VIII: Conclusion and Implications p. 96
8.1: Empirical evidence and answer p. 96
8.2: Theoretical, methodological and societal considerations p. 99
Bibliography p. 101
I: European Commission II: European Council
III: European Court of Justice IV: Belgium
V: The Netherlands
VI: Alternative sources: international and national VII: Academic sources
Abstract
The analysis of the responses of political economy regimes to forces assigned to globalisation requires both a flexible and eclectic new institutionalist approach and a dynamic conceptualisation of the regime itself. This thesis addresses these responses in context of the European regulatory state and neo-corporatist regimes. By means of a comparative case study of telecommunications liberalisation and (re-) regulation in Belgium and the Netherlands, it argues that domestic peculiarities such as political agency based on a certain system of ideas and beliefs and the inclusion of social partners, particularly trade unions, constitute factors of substantial importance to the pace and extent of this dual transformation. Based on this analysis the thesis aims to contribute to the development of the required theoretical and conceptual approach.
Keywords: political economy, the regulatory state, neo-corporatism, new
- List of Abbreviations -
N.B. Only includes the abbreviations used more than once. Others are clarified in the footnotes.
AbvaKabo Algemene Bond van Ambtenaren & Katholieke Bond van Overheidspersoneel
AR Algemene Rekenkamer
BFP/FPB Le Bureau fédéral du Plan/Federaal Planbureau
BKV Belgische Kamer van Volksvertegenwoordigers
CDA Christelijke Democratisch Appèl
CD&V Christen-Democratisch en Vlaams
cdH Centre démocrate Humaniste
CPB Centraal Planbureau
CNV Christelijke Nationaal Vakverbond
CCE/CRB Conseil Centrale de le Économie/ Centrale Raad voor het Bedrijfsleven
CCT/RCT Comité consultatif pour les
telecommunications/Centraal Comité voor de telecommunicatie
CGSLB/ACLVB Centrale Générale des Syndicats Libéraux de
Belgique/Algemene Centrale der Liberale Vakverbonden van België
CGSP/ACOD Centrale Générale des Services Publics/Algemene
Centrale der Openbare Diensten
CMHF/VPP Centrale van Middelbare en Hogere Funcitonarissen bij
Overheid, Onderwijs, Bedrijven en
Instellingen/Vereniging Professionals for Professionals
CNT/NAR Conseil National de Travail/Nationale Arbeidsraad
CPN Communistische Partij Nederland
CSC/ACV Confédération des Syndicats Chrétiens de
De Unie/MHP De Unie/Raad voor Middelbaar en Hoger Personeel
EC European Commission
ECJ European Court of Justice
EK Eerste Kamer der Staten-Generaal
EMU European Monetary Union
EU European Union
EZ Ministerie van Economische Zaken
FEB/VBO Fédération des Entreprises de Belgique/Verbond van
Belgische Ondernemingen
FGTB/ABVV Fédération Générale du Travail de Belgique/Algemeen Belgisch Vakverbond
FNV Federatie Nederlandse Vakbeweging
IBPT/BIPT L’Institut Belge des Services Postaux et des
Télécommunications/Belgisch Instituut voor Postdiensten en Telecommunicatie
IPO Initial Public Offering
IR International Relations
KPN Koninklijke KPN N.V.
LSP/PSL Parti Socialiste de Lutte/Linkse Socialistische Partij
MS Member States
MR Mouvement Réformateur
NI New Institutionalism
NRA National Regulatory Authority
NRC NRC Handelsblad
OECD Organisation for Economic Co-operation and
Development
ONP Open Network Provision
PRL Parti Réformateur Libéral
PS/SP Parti Socialiste/Sozialistische Partei
PSP Pacifistisch-Socialistische Partij
PTT Staatsbedrijf der Posterijen, Telegrafie en Telefonie
PvdA Partij van de Arbeid
PVV Partij voor Vrijheid en Vooruitgang
RTT Regie voor Telegraaf en Telefoon
SEA Single European Act
SER Sociaal-Economische Raad
SLFP/VSOA Syndicat Libre de la Fonction Public/Vrij Syndicaat voor het Openbare Ambt
SMP Significant market power
SOE State-owned enterprise
SP Socialistische Partij
SvdA Stichting van de Arbeid
TK Tweede Kamer der Staten-Generaal
(Open) VLD Open Vlaamse Liberalen en Democraten
VNO-NCW Verbond van Nederlandse Ondernemingen en het
Nederlands Christelijk Werkgeversverbond
VoC Varieties-of-capitalism
VVD Volkspartij voor Vrijheid en Democratie
- Introduction -
The edifice of the international Westphalian nation-state system is subjected to extraordinary structural change. Observing the forces commonly assigned to globalisation, late 20th century International Relations (IR) scholars started to debate the effects of global market integration and socio-cultural transnationalisation on the autonomy of nation-states. In response to the split between the ‘hyperglobalisers’ and the ‘sceptics’, a third ‘transformationalist’ hypothesis emerged, which stresses the unprecedented yet contingent nature of globalisation and perceives the state not to be incrementally dissolving or structurally re-empowering itself, but as being under
reconstruction (Held, 1999). The transformationalist hypothesis found conceptual
partners in, inter alia, the ‘competition state’ as the latter puts forward the paradoxical proposition that the hegemonic developed political economies are not eroding despite their self-initiated retrenchment from the (socio) economic domain and the commodification of the public sphere (Cerny, 1997; Cerny, 2005). In fact, it seems that the liberalisation and privatisation process is accompanied by the institutionalisation of the ‘regulatory state’, in which public interests and collective goods are safeguarded by legislative and bureaucratic or, in other words, regulatory means (Majone, 1994; Majone, 1997).2
This process of institutional transformation, which remind us of the dialectical double movement typical of and recurring in capitalist history (Polanyi, 1944), generated contemporary discussions on regulatory governance as correcting for the market failures associated with liberalisation (Bach &Newman, 2007; Baldwin et al., 2011; Levi-Faur, 2010). In Europe, this debate seems to be particularly relevant given the expanding role of the European Commission (henceforth ‘the Commission’ or EC) in ensuring competition and designing the regulatory context of individual Member States (MS) (Majone, 1997: 149-150).3 Unsurprisingly, the gradual yet
substantial transformation of Europe’s regulatory environment (Thatcher & Coen, 2008) is met by a steep rise in the attention of the European political science literature
2 For a recent overview of (liberalisation and) privatisation practices in advanced economies, read
OECD, 2009.
3 The transnational and hybrid governance structure of the EU economy (and in some cases the global
economy) gave rise to this new conceptualisation of capitalism as regulatory capitalism (Levi-Faur, 2010: 24-27).
to regulatory governance (see for a taxation: Lodge, 2008).4 It is precisely here that the thesis finds its meta-motivation for the choice of its particular subject.
Assuming this analysis of the transformationalist trend as being correct, there remains an analytical problem in going from the general and the long-term to the particular and the short-term. No state is easily transformed or the same and therefore each individual state takes a different transformative path. The new institutionalism (NI) literature allows us to address these analytical problems, because it provides important insights into the causes of institutional stability as well as the mechanisms and incentive structures that affect policy outcomes within a particular regime (Hall & Taylor, 1996; Pierson & Skocpol, 2002; Shepsle, 2006). Moreover, the new-institutionalist sub-species of comparative capitalism postulated various ideal-typical frameworks for political economy (PE) regimes, of which the frequently applied Varieties-of-Capitalism (VoC) paradigm stands out in terms of its analytical strength in pointing at institutional peculiarities providing each variety with comparative advantages in the global capitalist system (Hall & Soskice, 2001).
However, dissatisfaction in the academic community with these theoretically intertwined perspectives has recently become visible. Firstly, new institutionalism draws heavily on the path-dependency of formal institutional structures and the rational agency of the actors involved, even though economic globalisation and the proliferation of neoliberal ideology have apparently substantially changed both the character of these individual regimes and the internal dynamic between their embedded actors (Becker, 2011: 18-22; Gill, 1995; Streeck & Thelen, 2004; Schmidt, 2010). Secondly, the comparative capitalist literature has been dominated by the VoC paradigm, which is theoretically parsimonious but empirically unsustainable in the light of domestic variation, its structural functionalist logic and its inability to explain policy outcome and regime transformation. Therefore, scholars have stressed the need for this wider ‘institutionalist capitalist’ field to theoretically account for the empirical change (towards the regulatory state) of and within individual domestic regimes (Deeg & Jackson, 2006; Jackson & Deeg, 2008a&b; Radaelli et al., 2012).
These critical voices arguing for more comprehensive theoretical frameworks and more suitable heuristic devices in order to adequately analyse institutional
4 The regulatory state is in operation in the advanced economies on both the North American and
European continent yet the European case is a relatively recent occurrence and received little scholarly attention until the 1990s (Majone, 1994: 193-194).
dynamics stand in close relation to the transformationalist thesis.5 Namely, how do we account for substantially different policy outcomes and regime change if the theoretical basis of our empirical analysis is unsophisticated and therefore insufficient? This thesis aims to contribute to the ambitious but necessary task to improve the capability of the NI framework and comparative capitalism ideal-types to account for this policy and regime modification by systematically analysing the institutional and political dynamics within particular political economies under transformation towards the regulatory state in the public utilities sector. More specifically, the thesis focuses on the dual transformative dynamic of telecommunication services in European neo-corporatist countries by directly relating it to European Union’s regulatory (and competition) framework. The choice for telecommunications follows from the observation that it is one of the early liberalised and most extensively regulated European public utility sectors and therefore provides a rich body of empirical evidence.6 Neo-corporatism is proposed as a distinct analytical concept that may address the shortcomings of the restrictive VoC typology. Moreover, taking into account the treaty status of utilities services, as being of ‘general economic interest’, the performance of these sectors ought to be evaluated as well on the basis of equality of access and social cohesion7 – and therefore represents the values of the European Social Model (Scharpf, 2002),8 of which social partnership and concerted dialogue are an essential part.9 The focus on neo-corporatism thus contributes to the societal relevance of the thesis, which is further strengthened by the recent call from the Juncker Commission to reinforce the social concertation mechanisms on both the national and European level because of its legitimacy
5 More specifically, scholars within this tradition have developed this thesis in respect of the debate on
the convergence/divergence hypothesis of political economies under international competition pressures fostered by neoliberalism. Though the emergence of opposing camps may follow from weak conceptual understanding of the hypothesis (Hay, 2004), many scholars have embarked on the project of providing evidence for either confirming the claim that developed political economies have moved towards the liberal market model or rejecting it and postulating that globalisation (or Europeanisation) reinforced the institutional features of each particular regime (e.g. Schmitt & Starke, 2010).
6 The thesis excludes new technologies (e.g. Internet) and emphasizes the older services (e.g. fixed
voice telephony) because it is interested in the transformation of former natural monopolies.
7 See art. 14 TFEU, art. 106 TFEU, and protocol 26 TFEU. 8 See, also for example: http://www.etuc.org/european-social-model
9 In this respect, the choice for neo-corporatism results also from its input and output legitimacy
aspects.10 Hence, in addition to the meta-debate and specific theoretical concerns, the thesis appeals to the societal relevance of social dialogue and legitimate outcome.11
The ultimate aim is thus to contribute to the improvement of these theories by analysing the process of change and to unravel the specific mechanisms and intermediating qualities of institutional structures and their embedded socio-political agents – namely political elites and social partners (henceforth ‘domestic actors’). Hence, the thesis aspires to answer the following research question:
How do neo-corporatist political economy regimes enable, mediate and/or resist the dual process of liberalisation and (re-) regulation?
The thesis proposes to reach this objective by virtue of a comparative case study of telecommunications liberalisation and regulation in two European neo-corporatist countries with different liberalisation and privatisation records (tables II and III), namely Belgium and the Netherlands. Both countries were subjected to the EU liberalisation impetus (table IV), but whereas the first reveals a slow process of legislation transposition and market liberalisation the latter’s pace and extensity show to be more intense. By focusing on peculiar differences between these, in abstract conceptual terms, similar PE regimes, the empirical analysis plausibly reveals national idiosyncrasies that may prove significant to explain the differences in outcome – and, consequently, the thesis may contribute to both the improvement of comparative capitalist models and the ability to explain policy and regime transformation. Therefore, the empirical analysis aims to answer the next sub-questions underlying the answer to the main question:
1. How did the state and its domestic actors respond to the European Commission’s liberalisation and regulatory proposals?
2. How did the neo-corporatist policy-formation and social concertation structures shape the strategies and tactics of the domestic actors? Did they enable, mediate or constrain change towards liberalisation?
10 See the 2015 European Growth Strategy, but also public statements as, for example:
http://www.euractiv.com/sections/eu-priorities-2020/commission-seeks-revive-battered-social-dialogue-312678
11 Although being aware that these statements are of a normative character, the thesis assumes the
importance of neo-corporatism’s effect on legitimacy purely on the basis that it is in Europe perceived as such
3. Do the differences between these neo-corporatist regimes explain the dissimilarities in the transformative process?
Other research on the European regulatory state and/or competition policy in regard of the telecommunications sector reflects rather different approaches. Mostly, distinctly different cases are compared, the application of neo-corporatism as a concept is rare, and the analyses seem not to thoroughly assess the political process by virtue of a qualitative analysis of a rich body of primary documents (e.g. Bartle, 2002; Hulsink, 2012; Li & Xu, 2002). Hence, this thesis puts forward a new approach and, therefore, claims to be original.
The thesis is structured as follows.12 The first chapter establishes the theoretical framework by developing a flexible and integrated new institutionalist perspective and elaborating on the benefits of applying a PE model alternative to the conventional VoC typology so as to achieve a more adequate empirical analysis. Thereafter, the second chapter defines the regulatory state and neo-corporatism, which, in regard of the latter, addresses the concepts’ evolution and most suitable contemporary application in order to increase conceptual clarity. These chapters are followed by the third, which deepens the account of the research objective and design and provides arguments for the case selection and the methodology as applied to these cases. With these theoretical and methodological elements in place, the thesis moves towards its descriptive and main empirical analytical parts. The fourth chapter expands on the EU’s legislative expansion and national legislative and de facto market developments in order to provide the reader a proper contextualisation of the telecommunications case. The fifth chapter analyses national state-level behaviour as regards the EU impetus by virtue of the evidence on their transposition and implementation record and their position vis-à-vis the Commission. Then, the sixth chapter examines the national policy-making process by focusing on the agency of political elites within the domestic institutional and coalition context (tables V and VI). The seventh chapter concentrates on the role of social partners, particularly trade unions, and their influence on the policy-making process by investigating their institutional inclusion and agency outside the formal bureaucratic structures. Finally, the conclusion
provides the answer to the research question and addresses the wider implications of the empirical and theoretical discoveries.
- Chapter I: Theoretical Framework -
This chapter elaborates, firstly, on the central structure-agency problem and the need for contextualisation before the second paragraph establishes an integrated NI framework that allows for incorporating the notions of both currents. Thereafter, in the third section, the comparative capitalist literature is discussed in regard of three main controversies related to the predominant VoC approach and an argument in favour of alternative PE regime models is put forward. Based on the integrated NI framework and the three controversies, the chapter provides the theoretical disposition of the thesis and lays the foundation upon which the research design and empirical analysis are based.
1.1 New Institutionalism: structure vs. agency and historical context
The analysis of political processes and of the transformation of political regimes in particular faces the theoretical challenge of taking into account all relevant variables and valuing them and their interrelationship in the empirically most adequate manner. This thesis claims that an eclectic or integrated NI perspective provides a particularly suitable theoretical approach to confront this challenge to comprehensively understand a complex set of dynamically intertwined variables. Namely, foremost, an eclectic NI framework allows us to largely overcome most of the theoretical problems of the structure-agency debate as well as to incorporate a variety of structural effects on agents and of individual-level determinants for autonomous agency. Secondly, new institutionalism emphasizes the importance of clearly distinguishing the character of a particular institutional configuration and therefore urges to constitute a clear conceptualisation and historical contextualisation of the cases under scrutiny. Hence, as a result of these two elements, the theoretical framework both expands the analytical toolbox and ensures not to fall into the trap of putting the case into a mould of restrictive or even deterministic assumptions.
In order to arrive at this flexible and comprehensive framework, the present section elaborates on the insights of the new institutionalist literature and how these may be integrated. However, before pursuing this objective, one important remark ought to be made. The academic literature within this tradition is vast and, even after several decades since their establishment, there remain particular differences between
the main sub-fields of historical (Pierson & Skocpol, 2002), sociological (March & Olsen, 2006), rational choice (Shepsle, 2006) and, as recently put forward, discursive institutionalism (Schmidt, 2008).13 Despite that some of these differences are on paradigmatic notions and therefore seem to be irreconcilable, there are nonetheless strong similarities in terms of approach (Hall & Taylor, 1996: 22-24). For the purpose of this thesis it is not necessary to provide an exhaustive analysis of their differences or, even more ambitiously, of the historical development of the (new) institutionalist school and the specific variants or debates within the respective currents.14 Instead,
the present chapter focuses on the possibility and advantages of new institutionalism in its integrated form.
Analysing the process in which the institutional context of European member states has transformed under the influence of the European regulatory state, two main theoretical problems in need of resolution arise. Namely, what internal factors or predispositions constitute individual agency and to what extent are individuals autonomous or, alternatively, in what respect is individual agency influenced by the institutional structure wherein they behave? Together these two theoretical problems form the central bone of contention between rational choice and sociological institutionalism.
Firstly, from the rational choice literature one can distil the common assumption of rational behaviour based upon fixed preferences and objectives. This methodologically individualist approach argues that considerably autonomous individuals rationally pursue self-interest maximisation by virtue of instrumental strategic calculation – ‘logic of instrumentality’.15 The institutional context is essentially a set of incentives and disincentives, which determines ‘the rules of the game’ because it embodies the structural features that determine the logic of rational action and the possibility of overcoming collective action problems – the latter being particularly characteristic of the political arena (Shepsle, 2006: 1-5). This game theoretical approach does not merely imply the institutional effects on transaction
13 Not to deny the existence of other sub-fields as feminist institutionalism. 14 See for more on this, read for example Hall & Taylor, 1996.
15 Thus echoing the same considerations of rational choice in broader academic fields as IR (Snidal,
costs16 – thus the institutional environment as modifying the relative benefits and costs of particular actions – but it also emphasizes how institutions affect individual agency by determining the possibility of acquiring information. Hence institutions affect the options for agency by influencing cost-benefit analysis, the (un-) certainty structure and the calculation of the expectations of others (Shepsle, 2006: 5-11). The sociological perspective, in contrast, draws attention to the social and subjective nature of the agent and grounds agency in in an institutional context founded upon socio-cultural beliefs, preferences, norms and values or, more generally put, the system of ideas and beliefs.17 The individual is assumed not to act upon its estimation of what is rational and how exogenous objectives are most efficiently attained but upon the perception what is appropriate behaviour. This ‘logic of appropriateness’ is foremost related to a dual mechanism of social roles and corresponding behaviour within the normative confines of a particular context (Powell & DiMaggio, 1991). Individuals act upon, for example, a social convention linked to an organisation and by adhering to it they reinforce it. Hence, autonomous agency is fundamentally linked to the institutional structure in which the individual is embedded (March & Olson, 1984; Schmidt, 2010: 2).
1.2 New Institutionalism: an eclectic and flexible approach
How to reconcile these notions?18 Firstly, regarding interests and preferences, rational choice institutionalism seems to objectify individual interest and separate them from the belief system actors have. Criteria for assigning priorities and therefore for distinguishing between desirable objectives are inherently subjective given the fact that these criteria differ among nations and cities or even between individuals from the same background. Thus, the belief system seems to provide the basis of subjectivity upon which individual agency is founded. Therefore, rational choice is subjected to a too narrow identification of motivation and to a deterministic logic that allows only for some conclusions on agency while excluding others (i.a. Schmidt, 2010: 6-10). However, this is not to say – as in fact a number of sociological (or discursive) institutionalist scholars acknowledge – that rational action based upon a
16 The transaction cost concept is particularly relevant due to the influence of new institutional
economics (Williamson, 1981) on rational choice institutionalism.
17 Or put in alternative and in non-normative terms, ideology.
18 In this respect, the thesis points at the possibilities and limits of reaching theoretical pluralism in IR
subjective interpretation of interests is not possible (Hall & Taylor, 1996: 16). On the contrary, rational action is indeed possible yet the analysis of the preferences and interests of individual actors should be grounded in a precise empirical assessment of their respective social and cultural context as well as individual belief system.
Secondly, as regards autonomous agency, rational choice points at important aspects of the effects of formal institutional structures on the parameters of autonomous individual decision-making (e.g. uncertainty) while sociological institutionalism emphasizes the informal cultural and social aspects as well as interrelatedness between institutions and agents. However, whereas rational choice does allow for the intentional modification of institutions, sociological institutionalist scholars seem to reduce agents to products of their environment that they perpetually reproduce. In an attempt to combine the merits of both perspectives, one realises that enriching the analytical instruments is a plausible theoretical possibility because one can treat the institutional context as both a formal rational and informal socio-cultural (dis-) incentives structure. By assuming the mutual constitutiveness of structure and agency – something sociological institutionalist in fact often do (Hall & Taylor, 1996: 15-16) – the theoretical possibility of both intentionally changing the structure and the constitutive effect of institutions on the individual’s system of beliefs remains open. This mutual constitutiveness of institutions and agents is, however, a central conflict between these two new institutionalist sub-fields, because scholars of contrasting positions differ in their theoretical evaluation of what exactly makes agents act and which effect institutions exactly have. Do, in a hypothetical case, the structure-related causes based on either the socio-cultural belief system or the rationality changing (dis) incentives edifice in the end determine agency, whether cost-befit or subjective? This thesis argues that this and similar questions are not theoretically solvable because they remain, in the end, entirely contingent upon the complex of conditions of the case at hand. Namely, if the effects of institutions on agency and the determinants of individual preferences are both manifold and theoretically not conclusively determinable, and if institutions are indeed open to change albeit under specific conditions, it seems that the only way to go forward is to empirically analyse which of all the theoretical possibilities in operation is decisive. Importantly, historical institutionalism seems to provide the basis upon which on may formulate such an integrated framework because it combines a historical analysis of institutional
structures in which both rational and socio-cultural embedded agency are included (Hall & Taylor, 1996: 5-8, 10; Thelen, 1999).
Based on these theoretical considerations, the thesis claims that only an eclectic and flexible combination of rational choice and sociological institutionalist notions rooted in a contingent historical structure allows us to account for the structure-agency problem and to broaden our analytical toolbox so as to empirically assess regime
transformation in the most adequate sense. However, with this conception in place,
how to proceed? The first task is to provide a definition of institutions, which satisfies this eclecticism and flexibility. The thesis proposes to parsimoniously define institutions as “formal or informal procedures, routines, norms and conventions embedded in the organizational structure of the polity or political economy” (Hall & Taylor, 1996: 6). The category ‘institution’ should thus be perceived as encompassing a range of rules and norms from the formal macro-level of international law (e.g. Simmons, 2013) to the informal or subjective conceptions of legitimacy of individuals (Adler, 2013). And, inversely, analysing from the subjective nature of the macro-level structure of a dominant or ‘hegemonic’ ideology (e.g. Gill, 1995) to the micro-level individual pursuit of interest maximisation under rational conditions and constraints (e.g. uncertainty on others’ behaviour) (Snidal, 2013).19
However, since institutions are outcomes of agency, either organically grown or intentionally designed, but also relatively autonomous forces that structure the context of agents,20 one needs to address the mechanisms or logics inherent to the transformative process under consideration. This urges to properly depict the context and its essential and/or typical mechanisms that constitute change – which the thesis does on the basis of the neo-corporatist model (sections 2.2 and 2.3) and further EU and domestic-level descriptive specifications (chapter IV). However, though assuming historical contingency, a particular logic must be outlined because it
19 In respect of the possibility of agency changing structure, the thesis indirectly draws on another HI
tradition by emphasising the institutional structure as one of the causes of the uneven distribution of structural and relational power between the actors embedded in the same institutional structure. Namely, institutions are assumed to “unevenly distribute power across social groups” (Hall & Taylor, 1996: 9). This relates to Lukes’ power theory, because, for example, particular procedures or
organisational ties between trade unions and political parties in office could lead to uneven access to the policy-formation process and thus favour the opportunities of these trade unions to mobilise their bias – after Schattschneider’s phrase (Lukes, 1974: 14-39).
20 The central premise here echoes of course the foundational work of March & Olson, 1984 in which
identifies a mechanism that produces stability or, possibly, incremental but stable change, evident in but irrespective of the particular context. Namely, assessing the mechanisms or dynamics of the historical development of individual regimes and their policy outcomes, the traditional historical institutionalist literature identifies path-dependency as the explanation for the apparent stability of political regimes over time (Hall & Taylor, 1996: 7). Though path-dependency is applied in various ways by scholars from fields ranging from economics to sociology (see e.g. Mahoney, 2000: 507-513), it essentially entails the idea that “preceding steps in a particular direction induce further movement in the same direction” because the relative benefits of the step in the same direction are higher than those in a contrasting one (Pierson, 2000: 252). The ‘increasing returns’ or ‘positive feedback loops’ tend to make actors, which are embedded in the structural features of a regime and susceptible to utilitarian behaviour, to behave according to the incentive structure or regime. Therefore, path-dependency is not simply referring to the causal importance of prior historical events but to the reproduction and maintenance of the regime in the long run (Mahoney, 2000: 512). Without excluding forms of agency that possibly change a path-dependent process, the thesis claims that this mechanism may be manifest in various circumstances and to varying degrees and therefore should be included in the analytical framework.
1.3 Comparative political economy: ideal-types and change
The application of new institutionalist approaches in comparative PE – whether in an individual or integrated theoretical sense – provides us with a variety of Weberian ideal-types to discern institutional configurations. For example, in regard of welfare state regimes a vast body of approaches with distinctly different categorisations of welfare arrangements and associated employment policies and (dis) incentive and coordination structures emerged (for an overview: Arts & Gelissen, 2002). However, comparative PE seems to be dominated by the VoC paradigm (Hall & Soskice, 2001) since it is most often applied in comparative research. Despite its success, discontent with the paradigm’s dichotomous ideal-typical categorisation and its constrained ability to explain policy outcomes and institutional change in particular has in recent years become increasingly evident to many (Deeg & Jackson, 2006; Hancké, et al., 2007; Jackson & Deeg, 2012; Thelen, 2012). Acknowledging the accomplishments yet also agreeing with the criticism, this thesis proposes to move forward and apply
more specific categorisations better capable of accounting for change.21 Therefore, this paragraph discusses these three main criticisms and develops the rationale for this research its focus on a different concept – neo-corporatism – and a comparative analysis of two similar neo-corporatist regimes. For the purpose of this thesis it is unnecessary to describe the VoC perspective in detail and to elaborately criticize it since the cases under scrutiny are not based on the VoC ideal-types but neo-corporatism. However, the present section discusses several main dissatisfactions surrounding VoC because in that manner the theoretical and methodological creativity and strength of applying an alternative regime model in a similar systems design on the sectoral level will become clear.
The first most evident problem of comparative capitalist approaches and the VoC approach in particular is the reliance on static (and dichotomous) ideal-types.22 The VoC categorisation of political economies as either coordinated, liberal or, as later added, mixed market economies is a helpful heuristic device yet the application of fairly strictly conceptualised ideal-types forces one to assign a certain model to a particular country – or set of countries in large-N studies – while that country may not really fit into that model – hence the ‘drop in the box’ problem (Radaelli, et al., 2012: 538-541).23 The heterogeneity within countries increases the seriousness of this concern because, even though a regime fits the model’s general conditions, sectoral or regional differences are plausibly or in fact likely to be obscured (Deeg & Jackson, 2006: 155-156; Jackson & Deeg, 2008a: 693-694). These problems are generally a result of the fact that the variables upon which the models are based are static and in its dichotomous application binary, while in practice countries reflect a multitude of possibilities on these variables – for example, the centralisation vs. decentralisation of coordination structures is more adequately interpreted by means of a hierarchical
scale instead of either one or the other (Radaelli, et al., 2012: 542-545). Our heuristic
21 At the same time, however, voices arguing that criticism on VoC is valid but are often a ‘caricature’
and assign it with presumed claims Hall & Soskice, 2001 never made is also recognised. Hence, by developing and empirically applying the neo-corporatist regime concept, the thesis in fact directly underscores the call of these founding authors to perceive the VoC as an agenda for further research and specification (Hancké, et al., 2007: 8)
22 In this respect, the ‘liberal’ and ‘embedded liberal’ interpretation, as endorsed by some, seems
similarly problematic (Becker 2011: 12-13)
23 Another concern with the VoC ideal-type application is that scholars often analyse the larger
countries as the liberal United States and coordinated Germany and neglect the smaller countries (Becker, 2011: 11). This adds, albeit indirectly, to the present motivation of analysing the small regimes of Western Europe, which in practice resemble the neo-corporatist model instead of the coordinated typology.
instruments and, consequently, our empirical analyses would benefit from developing and applying alternative models that recognise the multiplicity of regime-type variables and the importance if not potential decisiveness of national peculiarities. The thesis, therefore, proposes to rely upon a categorisation that in fact does so and the choice has been made for neo-corporatism.
The VoC approach is, secondly, not designed to explain policy outcome such as liberalisation because it is intended to explain economic performance by institutional complementarities peculiar to each ideal-type (Hall & Thelen, 2009: 14-15; Streeck & Thelen, 2004: 16-33).24 Hence, when scholars draw on a VoC typology, the independent variable of the institutional model is assigned with standard elements that ought to explain policy outcome while the theoretical rationale establishing this causal link between them is ambiguous. Therefore the VoC approach, or restrictive ideal-typical methodologies in general, is not simply problematic in terms of classification but also in regard of academics applying it to explain phenomena it was not intended to explain. In other words, some assign explanatory powers to the VoC model that it in fact does not possess (Radaelli et al., 2012: 545). One who is primarily interested in policy outcome ought thus to divert from VoC’s emphasis on complementarities and economic performance. In this respect, the assertion that VoC seems to obscure power-related aspects needs to be taken into account (Jackson & Deeg, 2006: 39).25 Particularly because it does not sufficiently address the role of state agency, since VoC essentially is a firm-based approach (Schmidt, 2011: 155), alternative regime models that do so seem more suitable for policy outcome analyses should be applied for analysis of this kind. Given the research objective of explaining outcome differences (section 3.1), this observation adds another argument for
24 Namely, it draws extensively on the idea that the presence of a particular institution increases the
returns of another, thus institutional complementarities, and that firm strategies are conditioned upon (a multiple set of) these institutions, which, due to high opportunity costs for institutional adaptation, also explain the stability of the system (Hall & Soskice, 2001: 17, 21-36). The rational choice character of this model follows, in relation to the latter path-dependent nature of regimes, from the emphasis on uncertainty. Namely, uncertainty within the estimation of the benefits of institutional change and the behavioural responses of other actors constitute together the central factor for stability (Hall & Thelen, 2009: 11-12).
25 Indeed, for objectives of economic performance, interpretations of the relationship between
complementarity and change which are adjusted for agency may be reasonable positions (Hancke, et al., 2007: 11-13)
corporatism because it does include power-relations and, in particular, considers the state to be a central actor in policy development (and employment relations).26
Thirdly, and closely related to the latter point, a central discontent with the VoC approach is its meagre capability to explain institutional change. This deficiency follows from VoC’s original aim to argue against theories that predicted convergence among all advanced capitalist economies towards the liberal type. Namely, it argued that institutional arrangements are to be reinforced by factors challenging the structure because of complementarities within it and high costs of change (see footnote 9). Institutional change is therefore predicted to be incremental at best and substantial regime change is perceived as unlikely unless a particular exogenous shock occurs – hence a strong path-dependent bias is introduced into the framework (Jackson & Deeg, 2006: 158; Streeck & Thelen, 2004: 5-9). This essentially rational choice perspective of (dis) incentives makes the original framework largely materialistic and functionalist and thus increases the already established lack of attention to the role of power and political dynamics (Deeg & Jackson, 2007: 159-160).27 Therefore, more scholars within this tradition have moved towards including endogenous factors, particularly in response to account for the various empirical manifestations of liberalisation policies in Western European countries (Hall & Thelen, 2009: 14, 20-23; Streeck & Thelen, 2004: 2-5). This results in perceiving institutions as resources for agency and emphasizing the political power-dynamics within these institutions. Therefore, shifts in the composition of interest constellations and coalitional politics are often adopted as a significant endogenous variable (Hall & Thelen, 2009: 24-26).28 This innovation is supported here but also extended because in addition to its
26 Moreover, this objective also counters the assertion that the development of (potentially) a larger set
of varieties of capitalisms, which make state agency beyond the mere coordination of industrial relations a central concern, sacrifices analytical power and parsimony for a greater capacity of detailed description (Hancke, et al., 2007: 14). Namely, again, for addressing policy outcome, and change in particular (see third argument), this development actually adds to analytical power.
27 Although this assertion seems accurate, one has to acknowledge that the original formulation
included change by agency. Namely, change was possible by virtue of political entrepreneurs that have an interest in modifying the institutional regime or as a result disequilibrium in the institutional setting as a consequence of a change in material conditions, the distribution of power or the self-understanding of actors (Hall & Soskice, 2001: 54). However, though agency and power are not neglected, these scholars continue to emphasize stability and argue that challengers to the institutionalised power equilibrium are unlikely to prevail from a structural perspective (Hall & Thelen, 2009: 10-14).
28 Namely, essentially rationalist approaches maintain that actors can change the institutional setting
when it no longer serves their interest under favourable conditions. This happens through behavioural defection, the reinterpretation of institutions so as to change coordination practices or by clear and transparent political reform (Hall & Thelen, 2009: 13-15, 21, 23-28). The possibility of these
behavioural responses is not challenged; merely the focus on interest is extended to preferences based on belief systems etc.
rationalist focus on institutions as material (dis) incentives and interest-based conditions, a more diverse set of institutional elements (e.g. identities, norms ideas) that may explain change should be embraced (Jackson & Deeg, 2008b: 549-550). Therefore, in addition to adding political agency, it seems an improvement to draw upon an eclectic and flexible institutionalist framework similar to the one designed in section 2.2.
In sum, these three considerations argue in favour of moving beyond static (dichotomous) and restrictive typologies that obscure national idiosyncrasies (on the national and sectoral level), political agency and non-rationalist components and therefore inadequately account for policy outcome and institutional change. This thesis thus claims that by integrating NI perspectives into a flexible and comprehensive framework and by formulating alternative models of the institutional regimes (such as neo-corporatism), we would increase our ability to analyse particular cases with higher accuracy.
- Chapter II: Conceptualising the Regulatory State and Neo-Corporatism -
This chapter conceptualises the regulatory state and neo-corporatism so as to arrive at a detailed understanding of their theoretical (and empirical dimensions) to guide the main analysis. After briefly identifying the main elements of the regulatory state, neo-corporatism is thoroughly scrutinised in the second and third paragraphs. These respectively contain an outline of the concept’s evolution and its presently applied conceptualisation.
2.1 The regulatory state
The academic literature on regulatory governance displays a strong pluralism of conceptualisations that vary according to the author’s academic discipline and/or the emphasis on the scope and objectives of the regulations concerned (for an overview: Levi-Faur, 2010).29 Although recognizing both pluralism and the benefits of the insights delivered by contrasting conceptualisations, it seems that, for our present purposes, a state-centred or public administration conception of regulatory governance is most appropriate (Baldwin & Cave, 2011; Levi-Faur, 2010: 9).30
Regulation is essentially concerned with the principle-agent relationship between ex ante rule making by the legislature and ex post control exercised by national regulatory authorities (NRA).31 Regulatory agencies perform administrative and/or executive tasks of both continuously monitoring adherence by the actors to which the rules apply and improving the rules – both in order to serve the objectives formulated by the legislature. The NRAs are independent from those actors and therefore there is, despite obvious linkages, a clear division of labour between politics, private actors and bureaucracies (Levi-Faur, 2010: 7-8, 11). Moreover, some regulators are required to engage in rule making, for example in relation to standard
29 The thesis is aware of the historical evolution of various approaches dealing with regulation, such as
the Regulation school and Weberian approaches (Milonakis & Fine, 2009).
30 This follows from reasons of scope, but also from the primary interest in the Commission as the
bureaucratic driver of legislative incentives towards the regulatory state.
31 This definition does thus not include the notions of self-regulation (e.g. monitoring governments
respecting human rights by NGOs or standard setting by private business) nor does it allow for the inclusion of social norms and “soft law” that serve as informal mechanisms of steering or control (Levi-Faur, 2010: 8-9). However, in accordance to the thesis’ eclectic understanding of NI, the informal social mechanisms are included. For an early established and monumental elaboration of norm diffusion effects of the ‘new regulatory state’, read Braithwaite, 2000.
setting. Although the legislature sets the general policy framework and objectives, the agencies enjoy considerable rule making autonomy because they are assumed to be flexible, highly specialised and committed to rule enforcement. Therefore the effectiveness and credibility of regulation would increase (Levi-Faur, 2010: 18-19; Majone, 1997: 152).
The underlying rationale of this regime is based on the logic of correcting for both government and market failures. On the one hand, the competitive market is often assumed, particularly by those relying on a neo-classical or new institutionalist economics interpretation (e.g. Arrow & Debreu, 1954; Williamson, 1981), to be more efficient and therefore the liberalisation of state-dominated monopoly markets and the privatisation of state-owned enterprises (SOE) would increase efficiency – among others because bureaucracies are regarded as static and/or because politicians are assumed to be guided by short-term electoral benefits instead of economic rationality (Baldwin & Cave, 2011: 9). On the other, there are several arguments to embed the market in a regulatory framework so as to contain some of its potential negative effects. Regulation is, in sum, mainly intended to reduce monopolistic tendencies (e.g. abuse of dominant market position with upward pricing or predatory pricing), to safeguard universal access and affordability of services while retaining benefits of scale economies in case of natural monopolies, to counter asymmetrical and imperfect information provision (e.g. consumer right to know product composition), and contain negative externalities or spill-over effects (e.g. ecological damage by manufacturing) (Baldwin & Cave, 2011: 10-17; Majone, 1994: 194; Majone, 1997: 149; Stiglitz, 2008).
The regulatory instruments may involve various elements, which naturally depend on the rules and the type of agency. For the EU, the system of regulations reflects a hybrid form of ‘multi-level regulation’ since there is a division of allocated authority and (possibly a co-development of) functional aspects between the various levels of governance (Levi-Faur, 2010: 14-15).32 However, in most if not all regimes
the agencies are allowed to regulate prices, to contract or grant licenses to private actors and to ensure their compliance with the contractual obligations of these licenses (e.g. equal access in rural areas). Regulatory agencies also enforce the competition or anti-trust rules adopted by the legislature to increase proper market
functioning (competition authorities) and some serve as a ‘desk’ for consumer complaints (Ombudsman) (Levi-Faur, 2010: 3, 16-17). Finally, independent monitoring and enforcement (and autonomous rule making) immediately raise the question of accountability and legitimacy. In the absence of clear democratic accountability, the legitimacy of NRAs is foremost based upon results (‘output legitimacy’) – thus the efficiency and efficacy of its regulatory functions (Majone, 1997: 159-163). Therefore the control or ‘regulation of regulation’ is an important aspect of ensuring the compliance of these bodies with the framework set out by the legislature.33
2.2 Neo-corporatism: empirical and theoretical evolution
Neo-corporatism is subjected to a large variety of empirical manifestations and academic interpretations and therefore remains an ambiguous and contested concept. In its earliest application, corporatism had a negative connotation as it referred to both the fascist and communist regimes in which social interest representation was firmly embedded in political authoritarianism.34 However, in the post-war period, the ‘golden age’ of the strong macroeconomic performance of Western-European democracies incited a fresh wave of neo-corporatism literature. Academics drew the distinction between pre-war corporatism and post-war neo-corporatism and outlined the latter’s main features. Many attempted to explain the golden age by means of common features among neo-corporatist regimes such as, inter alia, demand-side Keynesian interventionism, long-term state planning and the inclusion of socioeconomic interest representatives (Molina & Rhodes, 2002: 306-307).35 These
efforts resulted in clearer conceptualisations and, despite differences in emphasis, the formal inclusion of societal interests (Schmitter, 1974 & 1979; 13) and the de facto regularised policy-making concertation practices (Lehmbruch, 1977; Lehmbruch, 1979: 150) became a commonplace in neo-corporatist theories. Thereafter, academics
33 There are many possible weaknesses in the control mechanisms of the regulatory bodies by the
legislature (the parliamentary committee system in particular) and judicial branch (Majone, 1997: 154-158). This is not directly relevant, but for an overview of the literature, read Levi-Faur, 2010: 16-24.
34 Although some trace its ideological roots back to the Rerum Novarum encyclical of Pope Leo XIII
(Schmitter & Grote, 1997: 12).
35 The golden age related to the high growth figures combined with low inflation, full-employment and
the expansion of the welfare state. Neo-corporatist countries were not alone in their pursuit of Keynesianism but the inclusivity of societal interests and the establishment of generous welfare state provisions were characteristic of them (e.g. parental leave, education and unemployment compensation (Huo & Stephens, 2012: 6-11).
expanded the various dimensions of these two basic elements so as to increase the accuracy of their empirical analysis (Calmfors et al., 1988; Lembruch, 1984; Schmitter, 1982). Noticeably, Schmitter (1982) made the famous distinction between neo-corporatism 1 and 2, respectively representing a formal structure of interest inclusion or ‘association’ and a system of policy/decision-making or ‘concertation’. Based on these conceptual efforts, scholars provided empirical evidence to support neo-corporatism’s theoretical claims on the strong macroeconomic performance of small and open Western European economies, of which Katzenstein’s analysis stands out as a monumental contribution (Katzenstein, 1984).36 This was followed by additional theoretical improvements, namely the introduction of consensus-based policy-making as a distinct attribute of neo-corporatist regimes (Lijphart & Crepaz, 1991; Siaroff, 1999: 175).
Neo-corporatism’s golden age passed, however, due to a combination of exogenous and endogenous factors.37 The collapse of the Bretton Woods monetary system, stagflation and deteriorating fiscal positions as well as the transition from Fordism to post-Fordism seemed to undermine the socioeconomic bargaining structures and the affordability of the welfare state (Schmitter & Grote, 1997: 13-14; Huo & Stephens, 2012: 5). Moreover, the intensification of European market integration further affected the context in which, particularly the smaller, European political economies operated (Schmidt 2011: 163-169). Neo-corporatist theory had to be evaluated, because the variables, which were previously held as relevant in explaining economic performance, were subjected to change themselves. Although some argued that neo-corporatism was ‘dead’ or ‘abandoned’ (e.g. Schmitter & Streeck, 1991), widespread disagreement between academics concluding on either the erosion, stability or even reinforcement of social partnership structures was evident – partly a result of estimation differences as regards root causes (e.g. technology or oil crises as causing unemployment) (Moline & Rhodes, 2002: 309-312).
Several of these fundamental contextual variables did change. Indeed, neo-corporatist regimes abandoned the international semi-fixed gold-exchange system and liberalised their financial markets and trade policies. The liberalised international
36 For an elaborate overview of this debate see Molina & Rhodes, 2002: 309-313.
37 Some called this academic ‘rediscovery of neo-corporatism’ ironic given that it coincided with the
actual failure of many neo-corporatist bargaining systems to deliver on socioeconomic policies (Schmitter & Grote, 1997: 4).
system constrained expansionary fiscal policy to attain objectives as full employment,
inter alia, because debts are perceived as increasing risk on government solvability
(Eichengreen, et al., 2007).38 Moreover, the (precursors of the) European Monetary Union (EMU) marginalised the possibility to manipulate interest rates and to pursue counter-cyclical monetary policy in order to attain objectives as full-employment – aggravated by the need to recourse to wage restraint and/or internal devaluation instead of currency devaluation to increase export-led growth (Calmfors, 1998). The Maastricht-criteria further induced fiscal consolidation policies and, partly due to the need to reduce state debt levels, neo-corporatist economies started to privatise their SOEs. The proliferation of competition policy and market integration by the Single European Act (SEA) evidently constrained active state interventionism in terms of industrial subsidies and trade protection – though smaller states are traditionally open (Huo & Stephens, 2012: 14-17). Finally, the shift from industry and manufacturing to knowledge-intensive services indeed pressured the advantage of neo-corporatist regimes in ensuring long-term innovation based on social partnership. Therefore, the state often intervened by coercing trade unions not to obstruct flexibility-enhancing measures, which eroded the character of self-regulating coordination (Huo & Stephens, 2012: 19-20).
Although these circumstances indeed influenced social partnership structures, the erosion or abandonment thesis seem exaggerated. Firstly, despite coordination often malfunctioned, the formal structures and practical mode of coordination were resilient. In fact, they proved important instruments from the mid-1980s onwards, albeit in adapted form, to adjust to the changing context. One vital cause is that, as inflation containment and unemployment reduction could almost exclusively be realised by wage restraint, the importance of collective bargaining actually increased.39 The substantial difference is that social concertation became more flexible and less centralised as sectoral-level approaches were progressively practiced (Grote & Schmitter, 1997: 43-55; Huo & Stephens, 2012: 5-6; Molina & Rhodes, 2002: 306, 309). Secondly, the neo-corporatist states that were effective in ensuring
38 Plus, demand-side spending is particularly ineffective in small and open economies due to the high
probability of investment leakage.
39 Social partners often agreed on national supply-side oriented employment policies that focused on
the activation of outsider groups (e.g. women) by legal and fiscal measures such as labour contract flexibility and increased spending on day care and placement services – the “flexicurity approach” (Wilthagen & Tros, 2004).
trade union cooperation on the employment measures covering the transition to the service economy were in fact those that intervened strongly.40 The Scandinavian countries in particular stand out, because they enabled the modification of the traditional structures by threatening trade unions with unilateral reform of welfare and employment policies if they would not find a compromise on flexibility on the one hand and security of employment on the other. Social partnership thus remained the
modus operandi yet the state’s interventionist role became more prominent.41
Noticing this practice, academics developed new concepts of neo-corporatism to distinguish this Scandinavian strategy of ‘creative corporatism’ from the ‘conservative corporatism’ and ‘competitive corporatism’ that characterised countries that either remained on the traditional path or moved towards the liberal market model (Ornston, 2012; Huo & Stephens, 2012: 19-21).
Finally, and importantly, empirical evidence shows that, in practice, tripartite structures persisted and the levels of union density, union coverage, wage coordination and wage-bargaining centralisation remained high despite an overall reduction – with Austria and the Netherlands being the exception in terms of union density (Huo & Stephens, 2012: 1, 16-17; Molina & Rhodes, 2002: 307-308).42 Therefore, it seems that the analyses arguing for the demise or the death of neo-corporatism erroneously focus on formal structures rather than on the process of policy-making – hence reflecting a focus on Schmitter’s (1982) neo-corporatism 1 instead of 2 (Molina & Rhodes, 2002: 320; Schmitter & Grote, 1997: 4-5). However, even in a formal structural sense, there actually emerged new neo-corporatist regimes in countries that previously had a tradition of pluralism (Ireland), weak corporatism (Finland) or those that moved from authoritarianism into democratic political regimes (Portugal and Spain). Hence, due to the combination of resilience and proliferation, the re-emergence of neo-corporatism could indeed adequately be characterised by the Sisyphus-analogy (Grote & Schmitter, 1997: 59; Royo, 2002; Schmitter & Grote, 1997).
40 Particularly in terms of ‘intervening’ by increasing R&D spending so as to facilitate technological
progress.
41 In this context, Germany and Austria stand out because of their, respectively, Tariffautonomie and
Kollektivvertrag, safeguarding the independent sectoral coordination structures.
42 In fact, even though market-based principles reduced universal access (e.g. restricted eligibility by
means-testing) and inflation lowered the real value of benefits, welfare state retrenchment seems an exaggerated statement too because welfare-spending reductions were modest and universal inclusivity remained the basis of most neo-corporatist welfare systems (Huo & Stephens, 2012: 17-18).
2.3 Neo-corporatism: a contemporary definition
Analysing neo-corporatism through a contemporary lens and integrating various theoretical accounts, the thesis arrives at the following definition. Neo-corporatism is in its strictest application a regime in which the main mode of socioeconomic policy-making is based upon a tripartite formal bargaining structure in which capital, or employers, and labour, or trade unions, organise (voluntarily) in concertation with the state to arrive at deals that generally satisfy the interests of the parties concerned – though bipartism may be the main practice (Siaroff, 1999: 177). Bargaining typically takes place at the sectoral and, for specific issues, at the sub-sectoral or company level (Huo & Stephens, 2012: 1) – although centralisation instead of fragmentation by means of institutionalised confederations generally fosters the cooperation between labour and capital. Trade unions are ideal-typically powerful by virtue of high union coverage and union density and, as often is the case, close linkages to political parties (Huo & Stephens, 2012: 16; Molina & Rhodes, 2002: 319-325; Siaroff, 1999: 176-179).43 Because of their small, open and export-oriented character, neo-corporatist economies are almost naturally reliant upon wage restraint. Employers therefore have a clear incentive to engage in wage coordination and trade unions, in practice, tend to agree on wage restrictions in return for redistributive welfare policies and labour productivity spending (Becker, 2011: 36; Huo & Stephens, 2012: 19).44 Moreover, a culture or ideology of social partnership based on consensus is at the root of neo-corporatism’s modus operandi and sustains its effective functioning over time (Katzenstein, 1985: 87-88). In this respect, a coalition party system, instead of a (bipartisan) majority rule system and a PE consisting of a pluralism of actors, fosters the resolution of conflict by means of consensus (Lijphart & Crepax, 1991: 232-244; Siaroff, 1999: 179).45
The categorisation of countries differs between the main writers on neo-corporatism – as a result of both the emphasis on different variables and the empirical
43 This ideal-typical aspect may, however, on empirical grounds be contested because as both right and
left wing governments performed welfare state reform, the trade unions link with socialist and social democratic parties diminished (Molina & Rhodes, 2000: 317-319).
44 Therefore, in contrast to liberal market economies, the corporatist countries generally reflect a high
score on variables of human capital and labour productivity in high-skilled segments (Huo & Stephens, 2012: 22-24).
45 This latter point is taken over from Lijphart’s (1985) concept of consociationalism, which is despite
its explicit inclusion by some authors (e.g. Siaroff, 1999: 179) a problematic term, inter alia, because it refers to the pillarised system along ideological groups. Historically, this is applicable to Belgium and the Netherlands.
changes in the countries under consideration. However, with some exceptions, there is a consensus that Austria, Belgium, Denmark, the Netherlands, Norway and Sweden are genuinely neo-corporatist and others as Finland, Switzerland and coordinated economies as Germany are included as well (Becker, 2011: 16; Grote & Schmitter, 1997: 43-55; Huo & Stephens, 2012: 1-3; Molina & Rhodes, 2002: 309; Siaroff, 1999: 185). The national cases presently under scrutiny should thus be considered as classic neo-corporatist regimes. The specific social partnership arrangements in the Belgian and Dutch telecommunications sector are outlined, respectively, in sections 7.1 and 7.4.
