Gonna Party Like It's 1899: Party Systems and the Origins of Varieties of Coordination

Abstract

This article explores the origins of peak employers' associations to understand why countries produce highly centralized macrocorporatist groups, weaker national associations but stronger industry-level groups, or highly fragmented pluralist associations. The authors suggest that the structure of partisan competition played a vital causal role in the development and evolution of these peak associations. The leadership for peak employers' association development came from business-oriented party activists and bureaucrats, who sought both to advance industrial development policy and to solve specific problems of political control. Business-oriented party leaders and bureaucrats in both predemocratic and democratic regimes feared the rising tide of democracy and labor activism and viewed employer organization as a useful tool for political control, to secure parliamentary advantage, and to serve as a societal counterweight to working class activism. Because leadership for association building came from the state, the political rules of the game were crucial to outcomes. The structure of party competition and state centralization shaped incentives for strategic coordination for both political actors and employers. Dedicated business parties were more likely to develop in countries with multiparty systems and limited federal power sharing than in countries with two-party systems and federalism: in a multiparty context where no single party was likely to gain power, each party had an incentive to cooperate with other social groups. Moreover, business-oriented party leaders and bureaucrats in multiparty systems were motivated to delegate policy-making authority to coordinated societal channels for industrial relations, because they anticipated that employers would win more in these channels than in parliamentary settings where the center and left could form a coalition against the right. Again, centralized party systems were more likely than federal ones to develop a dedicated national business party that transcended regional cleavages and to retain a strong role for the state in the governance of industrial relations.