Balancing the scales: labour incorporation and the politics of growth model transformation

Abstract

ABSTRACT Led by the emerging growth models perspective, research in comparative political economy has recently reintroduced demand drivers of economic growth into the centre of political-economic analysis. While this marks a significant advancement, current scholarship has, so far, focused mainly on explaining the endurance of existing growth models rather than the process of change. To begin addressing this gap, we identify one route to growth model change: the inclusion of organised labour into growth coalitions. Our proposed framework expands the role of growth coalitions in growth models by incorporating insights from the established literature on institutional change. Building on these insights, we distinguish between broad and narrow coalitions based on their scope, composition, and inclusive nature. With this distinction in mind, we argue that when a previously narrow coalition is broadened by incorporating organised labour, it can ‘balance the scales’, i.e. shift the growth model from a purely export-led model into a more balanced one. This shift occurs as labour’s influence on policy promotes wage growth and redistribution which, in turn, fuel wage-based consumption. We demonstrate our theoretical framework through a comparative analysis of the primary case study of Israel and two additional cases of Brazil and Ireland.