Party governments, clientelistic reforms, and varying levels of political constraints

Abstract

This paper analyzes how different levels of political constraints influence the reform outcomes of ideologically different party governments. The statistical analyses show that leftist governments facing high level of political constraints privilege the core workforce by increasing the redistributive generosity of core social security programs while at the same time accommodating the right-wing opposition with higher cuts in social spending. If constraints are low, left-wing governments have a less clientelistic approach to welfare state reforms. Right-wing party governments are mostly interested in cost containment and significantly decrease social spending when political constraints are low. The findings of this paper complement the literature on the dualization of labor markets and the privileged position of labor market insiders within the workforce by showing that leftist governments, under certain circumstances, lead to an increasing difference between labor market insiders, and globalization losers. The empirical analysis is based on pooled cross section time series analysis covering 18 countries over a period of 30 years.