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The Political Origins of Coordinated Capitalism

'The Political Origins of Coordinated Capitalism'
American Political Science ReviewVol. 102, No. 2May 2008 doi:10.1017/S0003055408080155 The Political Origins of Coordinated Capitalism: Business Organizations, Party Systems, and State Structure in the Age of Innocence CATHIE JO MARTINBoston University DUANE SWANKMarquette University T hispaperinvestigatesthepoliticaldeterminantsofcorporatistandpluralistemployers’associations and refl ects on the origins of the varieties of capitalism in the early decades of the 20th century. We hypothesize that proportional, multiparty systems tend to enable employers’ associations to developintosocialcorporatistorganizations,whereasnonproportional,two-partysystemsareconducive to the formation of pluralist associations. Moreover, we suggest that federalism tends to reinforce incen- tives for pluralist organization. We assess our hypotheses through quantitative analysis of data from 1900 to the 1930s from 16 nations and case studies of the origins of peak employers’ associations in Denmark and the United States. Our statistical analysis suggests that proportional, multiparty systems foster, and federalism works against, social corporatist business organization; employers’ organization is also greater where the mobilization of labor, traditions of coordination, and economic development are higher. These factors also largely explain pre-World War II patterns of national coordination of capitalism. Case histories of the origins of employers’ associations in Denmark and the United States further confi rm the causal importance of political factors. Although Danish and American employers had similar interests in creating cooperative national industrial policies, trajectories of associational development were constrained by the structure of party competition, as well as by preindustrial traditions for coordination. A good deal more than the English Channel sep- arates the coordinated market economies of continental Europe from their liberal cousins to the west; yet, scholars remain puzzled about the origins of these divergent economic models. How, for example,dothe“virtuouscircles”ofcoordinationman- age to take hold in many European nation states, whereas the Tocquevillian patterns of cooperation fail to thrive beyond American communities? At the dawn of the 20th century, employers and their government supporters across the Western world sought to de- velop peak business associations to nurture develop- mental capitalism; yet, these experiments in nonmar- ket coordination ultimately resulted in quite different organizational forms. Some countries produced frag- mented or “pluralist” associations, whereas others de- Cathie Jo Martin is Professor of Political Science, Boston University, 232 Bay State Road, Boston, MA 02215 (cjmartin@bu.edu). Duane Swank is Professor of Political Science, Marquette Univer- sity, PO Box 1881, Milwaukee, WI (duane.swank@marquette.edu). We thank Emanuel Coman for exceptional research assistance; Alex Hicks for methodological advice; and Jonat
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