Abstract
Abstract Collective goods provision, most prominent in coordinated market economies, depends on certain institutional conditions that constrain employer behavior and trigger cooperation. Increased capital mobility, characterized by new exit opportunities for business and an influx of multinational companies not anchored in their new home-countries’ institutional environment, loosens those ‘beneficial constraints’. I argue that these challenges do not lead to convergence between globalized locations as the structural power of business depends on the type of firms attracted by local institutional comparative advantages. Comparing collective skill formation in two heavily globalized cantons of Switzerland, I show that a region fundamentally relying on low-tax policies sees its hands increasingly tied in the face of globalization. It must accordingly reshape collective goods provision around policies favored by business. In contrast, a location with more diverse comparative advantages is able to implement more compelling policy elements that punish uncooperative firms.
Highlights
Globalization has been one of the most controversial topics in comparative political economy (CPE), often said to contribute to the erosion or transformation of institutions providing collective goods
I argue that these challenges do not lead to convergence between globalized locations as the structural power of business depends on the type of firms attracted by local institutional comparative advantages
Collective goods provision is especially predominant in coordinated market economies (CMEs) (Hall and Soskice, 2001), where manifold private and public actors cooperate in the provision of research networks, wage restraint through collective bargaining, social peace, patient capital or specialized but transferable skills through
Summary
Globalization has been one of the most controversial topics in comparative political economy (CPE), often said to contribute to the erosion or transformation of institutions providing collective goods. I observe how actors in the governance of dual VET react to problems of increased globalization and loosened beneficial constraints and try to trigger training participation of MNCs. I find that reactions vary significantly between different locations and are not consistent with theoretical expectations that suggest an overall movement toward nonconstraining policies. Drawing on Billett and Smith (2003), I distinguish between ‘compelling’ VET policies that punish MNCs that do not train (resembling beneficial constraints) and ‘encouraging’ VET policies that aim to generate purely voluntary firm commitment. Explaining such variation, I incorporate and build upon the structural power literature. In locations with more diverse comparative advantages, business exit is less likely, allowing for more compelling dual VET policies toward MNCs
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