T h e Renegotiated A lliance B etw een the L eft a n d O r g a n ised L a b o u r in W estern Europe Marco Simoni 2007 Submitted for the Degree of Doctor of Philosophy European Institute London School of Economics and Political Science UMI Number: U237538 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U237538 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 THfeStS f Library grtShLttxs'v * **$€conr*™ J i '’bSoa I the undersigned, Marco Simoni, hereby declare that the work presented in this thesis is my own. Signature 2 Abstract The alliance between the Left and organised labour in the majority of European countries is not over, contrary to the arguments of much of the current literature on industrial relations and electoral socialism. During the 1980s and 1990s, social democratic governments approved over 70% of their socio­ economic policies in cooperation with trade union confederations. These policies are distinct from the Keynesian model of the post-war decades which directly benefited labour, and are based on the monetarist macroeconomic regime. As a consequence, the alliance can be renegotiated only under certain conditions, which do not always exist. This thesis builds a comprehensive framework to account for party/union interactions, including instances of renegotiated alliances and also of more strained relationships. In order to do so, it examines the constraints and incentives faced by each actor separately, and then brings them together. Quantitative and qualitative methods, as well as historically-informed discursive approaches and game theoretical modelling, are employed. In an age of globalisation and social fragmentation, social democratic parties no longer need trade union partnerships for purposes of economic management, but they retain electoral incentives to include unions in policy making. These incentives are contingent upon union acceptance of limited gains from policy negotiations: excessive concessions to unions would alienate non­ union workers from the social democratic vote. In turn, organised labour is able to accept modest gains (which, under an unfavourable overall scenario are nonetheless positive) only if it is very cohesive. I show that confederation democracy - not coercion as traditional neo-corporatism would contend - is negatively correlated to wage militancy because it contributes union cohesion, and therefore it is key to determining party/union cooperation. The argument of the renegotiated alliance explains the importance of decision-making processes in determining outcomes, the enduring political relevance of trade unions, and the characteristics of the social democratic electorate. 3 Table of Contents ABSTRACT......................................................................................................................................3 TABLE OF CONTENTS............................................................................................................. 4 LIST OF TABLES AND FIGURES.......................................................................................... 7 LIST OF ABBREVIATIONS......................................................................................................8 ACKNOWLEDGEMENTS.......................................................................................................11 CH A PTER 1 THE END OF THE ALLIANCE BETWEEN SOCIAL DEMOCRATIC PARTIES AND TRADE UNIONS?............................................................................................................ 14 The Argument in a Nutshell ................................................................................................ 18 1.1 The Historical Ba ck g ro u n d ......................................................................................21 The ‘Golden Age’ ..................................................................................................................21 The C risis ............................................................................................................................... 23 Factors of Change ..................................................................................................................25 From Industrial to Post-industrial Society................................................................................. 25 Internationalisation of Capital Markets....................................................................................... 28 The Research Question .........................................................................................................32 1.2 Reviewing a Composite Literature ......................................................................... 35 The End of the Alliance or Sustained Social Democracy? ............................................ 36 Different Views Are Contested....................................................................................................... 38 Thought-Provoking Papers Suggesting Alternative Research Paths ........................... 41 The Cases o f Sweden and Spain.....................................................................................................42 Reconciling a Variety of Conclusions ..............................................................................44 1.3 Methodology and Plan of the Th e s is ....................................................................46 Plan of the Thesis (Guide for Readers) .............................................................................47 CH APTER 2 MAPPING THE PARTY/UNION ALLIANCE AND SUGGESTING AN UNDERSTANDING OF ITS DETERMINANTS............................................................... 52 2.1 Unpacking the Party /Union Relationship ............................................................55 Design of the Indicator .........................................................................................................58 Macroeconomic Management........................................................................................................ 59 Social Security...................................................................................................................................60 Labour Law and Employment Regulation....................................................................................61 Measurement and Sources ................................................................................................... 61 2.2 Discussing My Dataset and the Existing Literature ..................................... 64 Previous Conclusions Reconsidered ................................................................................. 66 Two Potential Explanations Are Excluded By Country Data .......................................68 Excluding Standard Institutionalist Explanations.......................................................................71 Excluding Standard Explanations - Continued..........................................................................74 2.3 My Hypothesis : Democracy and Concertation Leading to a Renew ed Allia n ce ........................................................ ;..........................................................................77 The Logic Leading to the Hypothesis ...............................................................................78 My Hypothesis from the Party Side............................................................................................... 80 How This Hypothesis Departs from Previous Theories .................................................82 How My Theory Could Be Proven W rong ...................................................................... 84 Conclusions ............................................................................................................................ 85 4 CHAPTER 3 A NEW UNDERSTANDING OF UNIONS’ BEHAVIOUR: CORPORATISM TURNED ON ITS HEAD.................................................................................................88 3.1 Unions Institutional Features and their Impact on Economic Outcomes .......................................................................................................................................................91 The Hierarchical Route to Centralisation: Does It W ork? ............................................ 95 Hypothesis: Is Democracy an Alternative to Hierarchy?........................................................ 97 3.2 M easuring Dem o cracy ...............................................................................................100 My Indicator of Union Democracy ................................................................................. 102 Components of Union Confederation Democracy........................... 103 Accountability of Peak Levels: Criteria 2 and 4...................................................................... 103 Ratification of Collective Agreements: Criteria 1, 3, and 5...................................................104 Assessing the Impact of Democracy on