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Lucio Baccaro

Until a few years ago, the received wisdom about corporatism was that although it had once been an important institutional alternative to liberal capitalism, it was crumbling everywhere due to the combined effects of globalization, European integration, technological change, and a generalized employer offensive. Against this backdrop, this paper argues that corporatism survived as an institutional structure (at least in European countries), but became pointedly less egalitarian. Essentially, it became a policy process by which governments that were unable or unwilling to engage in unilateral reform (for example, due to parliamentary weakness or fear of electoral retribution) managed to implement policy changes whose fundamental orientation was neoliberal. Perhaps surprisingly, the new corporatism also became more internally participatory and democratic than in the old days. This change compensated for the disappearance of the political exchange traditionally associated with classic corporatism. Because unions were no longer rewarded for bargaining moderation through more generous social protection programs or other side payments, they began to pay more attention to issues of procedural democracy in order to legitimize centrally negotiated agreements. The evidence buttressing these claims comes from quantitative data for 16 OECD countries between 1974 and 2005 and case study evidence of Ireland and Italy.