An example of competitive corporatism? the Dutch political economy 1983–2004 in critical examination

Abstract

Since 2001 the Netherlands, previously hailed as a model a few years before then, has been hit hard by economic stagnation. In the model view, the impressive rise in Dutch employment was due to the pact between capital and labour on wage restraint. In the view presented here, corporatism was not the source of the employment ‘miracle’ and wage agreements are considered to have acquired a mythical content. In the 1980s unions only acquiesced to drastic wage restraint, and wage restraint was not the path to success. Until 1995 Dutch GDP growth was only average, exports decreased, and so did productivity growth and the country's share of world exports. A better explanation is wage dispersion related to the explosive growth of part-time work and the sharp increase in cheap juvenile labour. Furthermore, demand was encouraged by rising house prices and tax-favoured mortgages were an extra spur in the late 1990s, and made the Dutch ‘miracle’ highly debt-induced. After 2001 people started to save more than borrow, and private consumption decreased. The Netherlands was never a model of competitive corporatism. Nonetheless, competitive corporatism could be a viable strategy for socio-economic development in Europe and an alternative to the dominant liberal one.