Comparative Political Economy Literature Research Articles

Social Democracy and Active Labour-Market Policies: Insiders, Outsiders and the Politics of Employment Promotion

Active labour-market policy is an important tool for governments interested in the promotion of employment. This article explores a topic in the comparative political economy literature in need of more attention: the politics behind the promotion of active labour policies. It is argued here that social democratic governments are often not interested in employment promotion measures; labour is divided into those with secure employment (insiders) and those without (outsiders); it is contended that social democratic governments have strong incentives to pursue labour-market policies that benefit insiders but not outsiders. There are factors, however, that either exacerbate or limit the effects of insider–outsider differences on social democracy. These claims are tested in three ways. First, the interplay of government partisanship and employment protection is explored in the British case. Secondly, the individual preferences assumed in the model are tested with Eurobarometer data. And thirdly, the effects of social democracy on active labour-market policy are analysed using data from sixteen industrialized democracies.

Japan's political economy in comparative perspective: Macroeconomic policy and wage coordination

Abstract. Japan has received conflicting assessments in the comparative political economy literature. This article seeks to identify the location of Japan's political economy within a comparative framework, building on recent analyses of macroeconomic policy and wage coordination. The author examines empirical records and shows that Japan's regime is best considered ‘Keynesian centralization’, rather than ‘monetarist (semi)decentralization’, in light of its effective wage coordination and its anti‐inflationary but flexibly accommodating macroeconomic policy. When there was national consensus on macroeconomic conservatism, Japan implemented restrictive policy and resembled monetarist centralization. However, Japan's monetarist centralization did not lead to distributional conflicts and high unemployment because its decentralized but coordinated wage bargaining and weak labor made it possible for employers and unions to achieve national diffusion of wage restraint without facing solidaristic wage demands by low‐paid workers.

The Politics of Growth Revisited

The purpose of this article is to examine the impact of labor market institutions and partisan politics on macroeconomic performance in advanced industrial societies since the mid-1970s. I do this by reevaluating some of the main claims of an influential comparative political economy literature of growth in light of some recent lessons from conceptual and empirical work associated with new growth theory. I also update the earlier "left-labor" models in light of several competing institutional explanations for different macroeconomic performance in advanced democracies. My findings are mixed. The evidence does suggest that congruent labor and political regimes have higher rates of growth than incongruent regimes (i.e., strong, organized unions with mostly conservative government or weak unions with mostly social democratic government). This appears to be true even in recent years and even after accounting for both cross-national income convergence and variations in political institutions and in firm-level coordinating capacity. Moreover, there is evidence that as proponents of social democratic corporatism suggest, countries with dominant left (right) governments and encompassing (weak) labor movements deliver higher investment and employment than do mixed regimes. However, in contrast to earlier work, I find that the more market-oriented version of contemporary capitalism is associated with higher absolute per capita growth rates. This discrepancy in relative performance has increased considerably since the mid-1980s.

From Labor to Finance

This article seeks to explain the Spanish Socialist Party's (PSOE's) failure to reverse Spain's dismal employment record during the course of its long government tenure from 1982 until 1996. Most efforts to explain Spain's position at the extreme of the unemployment spectrum in Europe follow the prevalent tendency in the comparative political economy literature by giving causal primacy to labor market institutions. This article challenges this labor-market-centered view by arguing that the failure of the Socialist government's economic policy strategy is to be found in the interaction of two other factors: the biased course of financial liberalization and the perverse effects of the PSOE's macroeconomic policy strategy on inflation and on the process of social concertation (national wage bargaining). The article also seeks to explain the PSOE's choices in these policy areas.

Economic Growth Strategies: The Effects of Ideological Partisanship on Interest Rates and Business Taxation in the United States

We reformulate the partisanship thesis in light of four claims leveled against it. The reformulated version, ideological partisanship, is based upon the theory that similar rates of economic growth may follow from the different use of policy instruments. Owing to their role as determinants of investment and growth, interest rates, business taxation rates, and the redistribution of the tax burden between capital gains and earned income are examined. We advance models that take into account other views of politics beside the partisan one, and test for political influences. The United States is characterized by very pronounced partisan differences in national economic policy with Democratic administrations seeking to promote growth through a consumption driven, while Republican administrations promote an investment-driven strategy. Democratic administrations also seek to shift the tax burden toward corporations and owners of capital. These findings are examined in light of the comparative political economy literature. We conclude that the forms and institutional foundations of left partisan policies differ among democratic capitalist countries.