Beyond corporatism: A configurational theory of policy concertation

TLDR: In this paper, the authors studied the political dynamics of policy concertation in terms of the varying configurations of three variables: perceived problems, the degree of shared economic understanding among the participants, and the perceived implementation capacity of the participants.

Abstract: Policy concertation (defined as making policy by means of agreements struck between government officials and representatives of employer associations and trade unions) is a major policy style in Western Europe. This article seeks to explain the political dynamics of policy concertation in terms of the varying configurations of three variables: perceived problems, the degree of shared economic understanding among the participants and the perceived implementation capacity of the participants. It is found that the incidence of broad policy concertation over the twentieth century in nine West European countries can be explained almost completely in terms of this configurational theory.

Figures

Table 2. Incidence of Policy Concertation 1945-1997

Table 1. Policy Concertation in Western Europe, 1990-1997

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Compston, Hugh William 2003. Beyond corporatism: a configurational theory of policy
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BEYOND CORPORATISM
A CONFIGURATIONAL THEORY OF POLICY CONCERTATION
Hugh Compston
School of European Studies, Cardiff University, UK
Post-print: article as accepted for publication in
European Journal of Political Research, 42, 2003: 809-831
ABSTRACT
Policy concertation, defined as making policy by means of agreements struck between government
officials and representatives of employer associations and trade unions, is a major policy style in
Western Europe. This article seeks to explain the political dynamics of policy concertation in terms
of the varying configurations of three variables: perceived problems, the degree of shared economic
understanding among the participants, and the perceived implementation capacity of the
participants. It is found that the incidence of broad policy concertation over the 20th century in nine
West European countries can be almost completely explained in terms of this configurational theory.
Key words: policy, concertation, corporatism, Europe, employers, trade unions

1
INTRODUCTION
Although the idea of employers and unions participating in the making of public policy sounds
strange to British ears, elsewhere in Western Europe public policy is often made by means of
agreements struck between government officials and representatives of employer associations and
trade unions. This practice, which can be termed ‘policy concertation’ to distinguish it from the
more pluralist policy-making characteristic of Britain and other Anglo-Saxon countries, is
significant because it affects the content of public policy and therefore the shape of the society we
live in. Because decisions are taken by agreement, each participant has a power of veto and is
therefore guaranteed influence over the decision. This rules out policy decisions that are
unacceptable to employers or trade unions. It also leads governments to introduce policies that they
would not otherwise have introduced, in exchange for concessions from employers and unions. In
certain cases, the political exchange of policy concertation may render feasible policy options not
previously open to the government, such as expansionary economic policies dependent on wage
restraint.
Policy concertation in Western Europe during the 1990s included social pacts, agreements struck
within the regular state policy-making apparatus between representatives of business, labour and the
state, and the implementation by the state of bipartite employer-union agreements. It is most
common in the fields of employment and social policy, but in some countries encompasses
significant areas of economic policy as well. This broad policy concertation has been associated
historically with countries such as Austria, with its Social Partnership, as well as with the
Netherlands and Sweden, but the breadth of policy areas covered by policy concertation also varies
over time: during the 1990s broad policy concertation was still characteristic of Austria, for
example, but had ceased to exist in the Netherlands and Sweden while becoming established in
Ireland and Italy (Table 1).
Why does the range of public policy codetermined by policy concertation vary between countries
and over time? The purpose of this article is to answer this question.
1
My starting point is the limited success of theories that use a distinctive corporatist logic to explain
the incidence of broad policy concertation in recent years. Not all corporatist theories are devoted to
explaining policy concertation, of course. Some seek to explain phenomena such as economic policy
and economic outcomes (eg Cameron 1984, Crepaz 1992, Woldendorp 1997), while others focus on
explicating corporatism as a state of affairs (eg Lijphart and Crepaz 1991, Keman and Pennings
1995, Siaroff 1999). And those theories that are designed to explain policy concertation often use
different terms to refer to it, including the term ‘corporatism’ itself (eg Lehmbruch 1979,
Woldendorp 1997).

2
Table 1. Policy Concertation in Western Europe, 1990-1997
Country
Policy areas covered
Wide-concertation countries with frequent concertation
Austria
Social policy, fiscal policy, monetary policy, investment policy, industrial policy,
social welfare, labour law, job-creation and training, employment, EU-issues
Wide-concertation countries with sporadic concertation
Ireland
Overall macro-economic policy strategy, social welfare, government spending in
general, employment policy including active labour market policy, regional policy
Medium-concertation countries with sporadic concertation
Italy
Taxation, expenditure (especially pensions), labour law
Narrow-concertation countries with frequent concertation
Netherlands
Social security, employment policy
Sweden
Many sectors until 1992, then restricted to labour market policy and pensions
Germany
Social insurance, labour law, health, reconstruction of the East
Narrow-concertation countries with sporadic concertation
Spain
Employment law and social security
France
Employment law and social security
Non-concertation countries
Britain
None
Source: Berger and Compston 2002, political country chapters.
Arguably the most influential theory of policy concertation that does utilise a corporatist logic of
explanation starts with the proposition that the existence of corporatist systems of interest
intermediation in Schmitter’s original sense (Schmitter 1979: 13) means that the organisations
involved can no longer externalise the economic costs of their actions. If a trade union in a single
industry makes excessive wage claims, it may be possible for employers in that industry to pass
these on in the form of higher prices to the rest of society, but if a union movement that
encompasses most of a nation’s workforce makes excessive wage claims, the resultant price rises hit
everyone, including union members. For this reason, encompassing union movements are expected
to be more open to negotiating wage restraint than smaller or divided movements, which encourages
governments to enter policy concertation with the intent of offering policy concessions in exchange

3
for wage restraint (Calmfors 1993, Olson 1982). Corporatism is also expected to facilitate
negotiations by limiting the number of participants and by giving to leaders of trade union
confederations and employer peak associations the ability to make the binding commitments on
behalf of their members that are essential if political exchange is to take place on a continuing basis
(Lehmbruch 1979: 167-168, Slomp 1992: 163, Crouch 1993: 54-55, 289).
The problem with this model is that it fails to account for the incidence of broad policy concertation
in Western Europe in the 1990s. Although it can explain the persistence of broad policy concertation
in Austria, where the compulsory Chamber system is as close to an ideal-type corporatist system as
exists in Western Europe, it cannot explain its rise in Ireland, where the distribution of power within
employer associations and trade unions is relatively decentralised, or its resurgence in Italy, where
employer associations and trade union confederations are institutionally divided.
There are a number of other theories of policy concertation that utilise conceptions of corporatism as
explanatory variables, but these generally go beyond the corporatist logic of explanation to include
other explanatory variables as well. A number of such variables have been cited in the political
economy literature. These include the postwar emergence of a willingness on the part of
governments to trade policy concessions for certain commitments by employers and/or trade unions
due to the postwar extension of the role of government in managing the economy, labour party
participation in government, economic openness, consociationalism, economic consensus,
egalitarian political cultures, degree of societal support, the relationship of organised groups to
modernisation in previous centuries, and the extensive institutionalisation of contacts between
employers, trade unions and the state (for a review of these theories see Compston 1998, 2002).
Rather than criticising these theories, a number of which have considerable explanatory power, what
I wish to do here is to offer a new theory of policy concertation that also goes beyond the logic of
corporatism by utilising different independent variables and a different logic of explanation, a theory
that provides a parsimonious explanation of the incidence of broad policy concertation since 1945
that is at least as compelling as the accounts offered by existing theories. This configurational theory
explains broad policy concertation in terms of the changing configurations of values of just three
variables: the nature of contemporary problems as perceived by the government; the degree of pre-
existent shared understanding of the aims and mechanisms of economic policy among governments,
employers and unions; and expectations about the likelihood that the prospective participants will
implement their sides of any agreements reached.
The first part of the article is devoted to describing this configurational theory and how it works. The
second part uses the findings of a major international study of policy concertation to illustrate how
the political dynamics of broad policy concertation in Western Europe since 1945 can be almost
completely accounted for in terms of the shifting configurations of values of the three explanatory
variables.
A CONFIGURATIONAL MODEL OF POLICY CONCERTATION
The model of policy concertation set out below is inspired by John Kingdon’s theory of agenda-
setting, in which items are seen as coming up for decision when simultaneously a compelling
problem is recognised, a solution in the form of a technically and politically feasible policy proposal
is available, political change makes politicians receptive, and potential constraints are not too severe
(Kingdon 1995). Applying Kingdon’s approach to a different dependent variable results in a
different theory, but the logic is the same in that both posit that the value of the dependent variable
is determined by the coincidence in time of specific configurations of events and conditions.

Frequently asked questions

Q1. What have the authors contributed in "A configurational theory of policy concertation" ?

This article seeks to explain the political dynamics of policy concertation in terms of the varying configurations of three variables: perceived problems, the degree of shared economic understanding among the participants, and the perceived implementation capacity of the participants. 

Q2. What are the future works in "A configurational theory of policy concertation" ?

Further work is obviously needed if a theory with one hundred per cent explanatory success is to be constructed, but in the meantime the substantial explanatory success of the configurational theory means that it constitutes a powerful device for understanding the causal dynamics of policy concertation. 

Q3. What was the motivation behind the establishment of corporatist institutions in the Netherlands?

The establishment in the Netherlands of a set of corporatist institutions designed in part as forums for policy concertation was largely motivated by the felt urgency of postwar reconstruction and preceded by growing shared economic understanding. 

Q4. What was the reason for the lack of policy concertation in the Netherlands?

In addition, the new government’s application of Keynesian techniques in the mid-1960s was followed by a resurgence of economic growth, reducing the incentive to engage in policy concertation. 

Q5. What was the first attempt to tackle Germany’s serious economic problems?

In addition, when the Federal Republic was established in 1949 new approaches were already being tried to tackle Germany’s serious economic problems, namely the currency reform of 1948 and ‘social market’ ideas. 

Q6. What is the reason why the lack of broad policy concertation in Britain was explained by the fact?

The lack of postwar broad policy concertation in Britain during this period, despite considerable agreement on economic policy and the precedent of effective policy concertation during the war, can be explained in terms of the theory by the fact that expectations of implementation were undermined by the inability of the peak employer and union confederations to guarantee the compliance of their constituent organisations with any agreements reached at national level. 

Q7. What was the only country in which there was no policy concertation of any kind?

There was just one country in which no policy concertation of any sort occurred: Britain, where all forms of policy concertation were extinguished by the vehemently anti-union Conservative government of 1979-1997. 

Q8. What was the main cause of broad policy concertation in France and Italy?

In Ireland, economic problems had persisted throughout the postwar period but it was not until the economic views of governments, employers and trade unions converged somewhat, and centralised collective bargaining simplified the problem of implementing wage agreements after 1970, that policy concertation emerged when the government began to facilitate annual wage agreements by offering budgetary concessions. 

Q9. What is the degree of hostility and distrust between employers and unions?

If employers or governments do not, then not only would it be difficult to obtain the wage restraint often desired by governments and employers in exchange for policy concessions, since the coordination of wage rises via collective bargaining would be rendered impossible, but in addition the degree of hostility and distrust between employers and unions would be likely to prevent agreement anyway. 

Q10. What is the main reason for the persistence of broad policy concertation in Italy during the 1990s?

The persistence of periodic broad policy concertation during this period has been accompanied by a widespread view that Italy’s substantial progress in tackling its economic problems in recent years can be at least in part attributed to the social pacts of 1992, 1993 and 1995. 

Q11. What is the main argument for the resurgence of broad policy concertation in Austria?

Although it can explain the persistence of broad policy concertation in Austria, where the compulsory Chamber system is as close to an ideal-type corporatist system as exists in Western Europe, it cannot explain its rise in Ireland, where the distribution of power within employer associations and trade unions is relatively decentralised, or its resurgence in Italy, where employer associations and trade union confederations are institutionally divided. 

Q12. What is the main argument for the argument that the theory of policy concertation is a corp?

Rather than criticising these theories, a number of which have considerable explanatory power, what The authorwish to do here is to offer a new theory of policy concertation that also goes beyond the logic of corporatism by utilising different independent variables and a different logic of explanation, a theory that provides a parsimonious explanation of the incidence of broad policy concertation since 1945 that is at least as compelling as the accounts offered by existing theories. 

Q13. What was the effect of the configurational theory on policy concertation in Germany?

In Germany, on the other hand, where policy concertation had been restricted to certain areas of social insurance, labour law and health, the severe economic and social problems created by reunification led to short-term broad policy concertation in the form of the 1993 Solidarity Pact.