Political responses to interdependence: What's “left” for the left?

International Organization

Volumn 45, Issue 4, 1991, Pages 539-564

  Garrett, Geoffrey ^a   Lange, Peter ^a  

^a NONE

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EID: 84976155276     PISSN: 00208183     EISSN: 15315088     Source Type: Journal    
DOI: 10.1017/S0020818300033208     Document Type: Article

References (88)

1. For classic statements of this partisan-ideological thesis, see Douglas Hibbs, “Political Parties and Macroeconomic Policies,” American Political Science Review 71 (December 1977), pp. 1467-87;
2. Etienne Sadi Kirschen, Economic Policy in Our Time (Amsterdam: North Holland, 1964);
3. Seymour Martin Lipset, Political Man: The Social Bases of Politics (Garden City, N.Y.: Doubleday, 1963).
4. The domestic incentives to pursue partisan strategies also have been much debated. Arguments that the exigencies of democratic political competition both in plurality two-party systems and in proportional representation systems generate strong pressures for policy convergence, rather than for partisan distinctiveness, follow from the early work of Anthony Downs, An Economic Theory of Democracy (New York: Harper & Row, 1957).
5. For more recent studies, see Robert Jackman, “Elections and the Democratic Class Struggle,” World Politics 39 (October 1986), pp. 123-46;
6. Richard Rose, Do Parties Make a Difference? 2d ed. (London: Chatham House, 1984). Others suggest that the “privileged position of business” militates heavily against partisan separation.
7. See, for example, Fred Block, “The Ruling Class Does Not Rule,” Socialist Revolution 33 (May-June 1977), pp. 6-28;
8. Fred Block, “Beyond Relative Autonomy: State Managers as Historical Subjects,” Socialist Register, vol. 17, 1980, pp. 227-42;
9. Stephen Elkin, “Pluralism in Its Place,” in Roger Benjamin and Stephen Elkin, eds., The Democratic State (Lawrence: University of Kansas Press, 1985), pp. 179-211;
10. Charles Lindblom, Politics and Markets (New York: Basic Books, 1977);
11. Claus Offe, “Theses on the Theory of the State,” in Claus Offe, ed., Contradictions of the Welfare State (London: Huchinson, 1984), pp. 119-29.
12. There is growing evidence, however, that domestic politics generates incentives for governments to pursue economic strategies that further their partisan interests so long as these are consistent with reelectable levels of macroeconomic performance. See Geoffrey Garrett, “Between Autonomy and Constraint: Government Economic Strategies in the Advanced Industrial Countries,” mimeograph, Stanford University, Stanford, Calif., 1990;
13. Geoffrey Garrett and Peter Lange, “Government Partisanship and Economic Performance: When and How Does ‘Who Governs’ Matter?” Journal of Politics 51 (August 1989), pp. 676-93.
14. The first systematic statement of the interdependence thesis was made by Richard N. Cooper in The Economics of Interdependence (New York: McGraw-Hill, 1968).
15. For a recent survey of the literature, see Arthur Stein, “Governments, Economic Interdependence and International Cooperation,” mimeograph, University of California, Los Angeles, 1989.
16. See Kenneth Hoover and Raymond Plant, Conservative Capitalism (London: Routledge, 1989);
17. Joel Krieger, Reagan, Thatcher and the Politics of Decline (London: Polity Press, 1986).
18. For an analysis of the oceanic cases, see Francis Castles, Australian Public Policy and Economic Vulnerability: A Comparative and Historical Perspective (Boston: Allen & Unwin, 1988).
19. For analyses of Mitterrand's France, see Peter Hall, Governing the Economy (London: Polity Press, 1986);
20. Howard Machin and Vincent Wright, Economic Policy and Policy-Making Under the Mitterrand Presidency, 1981-84 (London: Francis Pinter, 1985);
21. Philip Cerny and Martin Schain, Socialism, the State and Public Policy in France (London: Francis Pinter, 1985).
22. See Andrew Martin, “The End of the ‘Swedish Model’?” mimeograph, Harvard University Center for European Studies, Cambridge, Mass., 1986;
23. Andrew Martin, “Sweden: Restoring the Social Democratic Distributive Regime,” Harvard University Center for European Studies, 1987;
24. Peter Walters, “Distributing Decline: Swedish Social Democracy and the Crisis of the Welfare State,” Government and Opposition 20 (Summer 1985), pp. 356-69;
25. Jonas Pontusson, “Austerity, Government Crisis, and Political Realignment in Sweden, 1989-1990,” paper presented at the annual meetings of the American Political Science Association, San Francisco, 1990.
26. See Mancur Olson, The Rise and Decline of Nations (New Haven, Conn.: Yale University Press, 1982).
27. See Andrew Shonfield, Modern Capitalism (New York: Oxford University Press, 1965).
28. For a more recent discussion, see Andrea Boltho, ed., The European Economy: Growth and Crisis (New York: Oxford University Press, 1982).
29. See Jeffry A. Frieden, “Invested Interests: The Politics of National Economic Policies in a World of Global Finance,” International Organization 45 (Autumn 1991);
30. Peter Katzenstein, Small States in World Markets (Ithaca, N.Y.: Cornell University Press, 1985);
31. Michael C. Webb, “International Economic Structures, Government Interests, and International Coordination of Macroeconomic Adjustment Policies,” International Organization 45 (Summer 1991), pp. 309-42.
32. This was arguably even the case when unemployment rates were higher than 10 percent in many countries in the early 1980s. Whereas the costs of unemployment are narrowly targeted, those of inflation are felt throughout the whole electorate. See Douglas Hibbs, The American Political Economy (Cambridge, Mass.: Harvard University Press, 1987). Furthermore, it seems that many in secure employment came to believe that their material prosperity or at least the control of inflation was contingent upon the existence of a relatively large pool of unemployed workers. On this, see Garrett, “Between Autonomy and Constraint.”
33. Bruno Frey and Friedrich Schneider, “A Politico-Economic Model of the UK,” Economic Journal 88 (June 1978), pp. 243-53.
34. The seminal aggregate level studies are C. A. E. Goodhart and R. J. Bhansali's “Political Economy,” Political Studies 18 (March 1970), pp. 43-106
35. Gerald Kramer's “Short-Term Fluctuations in US Voting Behavior, 1896-1964,” American Political Science Review 71 (March 1971), pp. 131-43.
36. These finding are also supported at the individual level. See Heinz Eulau and Michael Lewis-Beck, eds., Economic Conditions and Electoral Outcomes (New York: Agathon Press, 1985);
37. D. Roderick Kiewiet, Macroeconomics and Micropolitics (Chicago: University of Chicago Press, 1983);
38. Michael Lewis-Beck, Economics and Elections (Ann Arbor: University of Michigan Press, 1988).
39. See R. Michael Alvarez, Geoffrey Garrett, and Peter Lange, “Government Partisanship, Labor Organization and Macroeconomic Performance, 1967-1984,” American Political Science Review 85 (June 1991);
40. Geoffrey Garrett and Peter Lange, “Performance in a Hostile World: Domestic and International Determinants of Economic Growth in the Advanced Capitalist Democracies, 1974-1982,” World Politics 39 (July 1986), pp. 517-45.
41. David Cameron, “Social Democracy, Corporatism, Labor Quiescence, and the Representation of Economic Interest in Advanced Capitalist Society,” in John H. Goldthorpe, ed., Order and Conflict in Contemporary Capitalism (New York: Oxford University Press, 1984), pp. 143-78.
42. See Kerry Schott, Policy, Power and Order: The Persistence of Economic Problems in Capitalist States (New Haven, Conn.: Yale University Press, 1984);
43. Fritz Scharpf, “Economic and Institutional Constraints of Full-Employment Strategies: Sweden, Austria and West Germany, 1973-1982,” in Goldthorpe, Order and Conflict in Contemporary Capitalism, pp. 257-90.
44. Olson, The Rise and Decline of Nations.
45. It is important to note that these political-institutional arrangements are often hypothesized to affect the behavior of capital as well as that of labor. Coherent systems are argued to be more likely to foster relatively stable environments in which entrepreneurs can pursue long-term strategies based on confident expectations about future rates of return. The “fit” between the partisan preferences of dominant parties and union organization can be expected not only to generate consistencies in economic policies within individual governments but also to promote continuities between governments. In this climate, the expected return from domestic investments is likely to increase relative to other uses of capital, with salutary consequences for society over the medium term. See Geoffrey Garrett and Lloyd Gruber, “The Political Economy of Investment,” paper presented at the annual meetings of the Midwestern Political Science Association, Chicago, 1990.
46. See Robert Flanagan, David Soskice, and Lloyd Ulman, Unionism, Economic Stabilization, and Income Policies (Washington, D.C.: Brookings Institution, 1983);
47. Hugh Heclo and Henrik Madsen, Politics and Policy in Sweden (Philadelphia: Temple University Press, 1987);
48. Andrew Martin, “Trade Unions in Sweden: Strategic Responses to Change and Crisis,” in Peter Gourevitch et al., eds., Unions and Economic Crisis: Britain, West Germany and Sweden (Boston: Allen & Unwin, 1984), pp. 190-359.
49. See David Finegold and David Soskice, “The Failure of Training in Britain: Analysis and Prescription,” Oxford Review of Economic Policy 4 (Autumn 1988), pp. 21-43;
50. Michael Piore and Charles Sabel, The Second Industrial Divide (New York: Basic Books, 1984);
51. David Soskice, “The Institutional Infrastructure for International Competitiveness: A Comparative Analysis of the U.K. and Germany,” in Anthony Barnes Atkinson and Renato Brunetta, eds., The Economics of the New Europe (London: Macmillan, forthcoming);
52. Wolfgang Streeck, “Industrial Relations and Industrial Change in the Motor Industry,” mimeograph, Wissenschaftszentrum Berlin, 1985.
53. See the following works of Adam Przeworski and Michael Wallerstein: “The Structure of Class Conflict in Democratic Capitalist Societies,” American Political Science Review 76 (June 1982), pp. 215-38;
54. “Structural Dependence of the State on Capitalism,” American Political Science Review 82 (March 1988), pp. 11-29.
55. Shonfield, Modern Capitalism.
56. Adam Przeworski and Michael Wallerstein, “Democratic Capitalism at the Crossroads,” Democracy 2 (July 1982), pp. 52-68.
57. Mervyn King and Don Fullerton, The Taxation of Income from Capital: A Comparative Study of the US, UK, Sweden and West Germany (Chicago: University of Chicago Press, 1984).
58. Milton Friedman, Capitalism and Freedom (Chicago: University of Chicago Press, 1962).
59. This is well illustrated by the Thatcher government's extensive bailouts during the 1980-82 recession. See William Keegan, Mrs. Thatcher's Economic Experiment (London: Allen Lane, 1984);
60. Peter Riddell, The Thatcher Government (Oxford: Basil Blackwell, 1985).
61. Schott, Policy, Power and Order.
62. See Russell Dalton, Scott Flanagan, and Paul Allen Beck, Electoral Change in Advanced Industrial Democracies: Realignment or Dealignment? (Princeton, N.J.: Princeton University Press, 1984);
63. Ivor Crewe and David Denver, eds., Electoral Change in Western Democracies: Patterns and Sources of Electoral Volatility (New York: St. Martin's Press, 1985).
64. Our typology is similar to that found in other more qualitative evaluations of political economic regimes. See Gerhard Lehmbruch, “Liberal Corporatism and Party Government,” in Philippe Schmitter and Gerhard Lehmbruch, eds., Trends Toward Corporatist Intermediation (Beverly Hills, Calif.: Sage, 1979), pp. 147-83;
65. Gerhard Lehmbruch, “Introduction: New Corporatism in Comparative Perspective,” in Gerhard Lehmbruch and Philippe Schmitter, eds., Patterns of Corporatist Policy-Making (Beverly Hills, Calif.: Sage, 1982), pp. 1-28;
66. Philippe Schmitter, “Interest Intermediation and Regime Governability in Contemporary Western Europe and North America,” in Suzanne Berger, ed., Organizing Interests in Western Europe (New York: Cambridge University Press, 1981), pp. 285-327.
67. Our typology differs in some respects, however, from that found in studies focusing on the processes of government or firm decision making, rather than on the constellation of political power and organizational conditions. According to these studies, France and Japan are examples of “corporatism without labor” or can be considered “coordinated market economies.” See T. J. Pempel and Keiichi Tsunekawa, “Corporatism Without Labor? The Japanese Anomaly,” in Schmitter and Lehmbruch, Trends Toward Corporatist Intermediation, pp. 231-70;
68. David Soskice, “Providing the Infrastructure for International Competitiveness: A Comparative Institutional Perspective,” mimeograph, Wissenschaftszentrum fur Sozialforschung, Berlin, October 1990.
69. For detailed discussions of the economic effects of oil wealth, see Garrett and Lange, “Performance in a Hostile World”;
70. James Alt, “Crude Politics: Oil and the Political Economy of Unemployment in Britain and Norway, 1970-1985,” British Journal of Political Science 17 (April 1987), pp. 149-99.
71. This type of model is most appropriate for the analysis of time series data. Nonetheless, controls for the effects of aggregate economic conditions are still significant in the context of the aggregated time periods used in this article. For a detailed discussion of political economic reaction models, see James Alt and K. Alec Chrystal, Political Economics (Berkeley: University of California Press, 1983), chap. 6.
72. See David Cameron, “The Expansion of the Political Economy,” American Political Science Review 72 (December 1978), pp. 1243-61;
73. Katzenstein, Small States in World Markets.
74. Furthermore, the results may also reflect the historical relationships between open political economies and the power of labor in both politics and the markets. See Cameron, “The Expansion of the Political Economy.”
75. See Robert Reich, The Next American Frontier (New York: Times Books, 1983);
76. John Zysman and Laura Tyson, American Industry in International Competition (Ithaca, N.Y.: Cornell University Press, 1983).
77. Helen Milner, Resisting Protectionism: Global Industries and the Politics of International Trade (Princeton, N.J.: Princeton University Press, 1988).
78. It is also important to note that while Japan was the least interventionist case on most supply-side indicators, investment by government was greater in Japan than in any other country. For discussions of the role of government planning in the Japanese economy, see Chalmers Johnson, MITI and the Japanese Miracle (Stanford, Calif.: Stanford University Press, 1982);
79. Daniel Okimoto, Between MITI and the Market (Stanford, Calif.: Stanford University Press, 1989).
80. This is consistent with the work of others on the effects of the strength of christian democratic parties on welfare provisions. See Alexander Hicks and Duane Swank, “On the Political Economy of Welfare Expansion,” Comparative Political Studies 17 (April 1984), pp. 81-118;
81. Harold Wilensky, “Leftism, Catholicism and Democratic Corporatism: The Role of Political Parties in Recent Welfare State Development,” in Peter Flora and Arnold Heidenheimer, eds., The Development of Welfare States in Europe and America (New Brunswick, N.J.: Transaction Books, 1981), pp. 345-82.
82. The evidence is much more mixed with respect to the effects of integration into the international economy. On some policy indicators, openness was negatively associated with the extent of government intervention. But on many others, the relationships were positive. These data do not allow for definitive conclusions with respect to the historical and functional effects of economic integration on domestic strategies. For a theoretical analysis of these relationships, see Frieden, “Invested Interests.”
83. See Cameron, “The Expansion of the Political Economy”;
84. Walter Korpi and Gøsta Esping-Andersen, “Social Policy as Class Politics in Post-War Capitalism: Scandinavia, Austria, and Germany,” in Goldthorpe, Order and Conflict in Contemporary Capitalism, pp. 179-208.
85. See Hicks and Swank, “On the Political Economy of Welfare Expansion”;
86. Wilensky, “Leftism, Catholicism and Democratic Corporatism.”
87. See Przeworski and Wallerstein, “Structural Dependence of the State on Capitalism” and “Democratic Capitalism at the Crossroads.”
88. Pontusson, “Austerity, Government Crisis, and Political Realignment in Sweden, 1989-1990.”