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Revisiting the Party Paradox of Finance Capitalism: Evidence from Switzerland, Sweden and the Netherlands

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  • Gerhard Schnyder

Abstract

The 'party paradox' thesis claims that centre-left parties have a genuine interest in pro-shareholder corporate governance reforms, while centre-right parties oppose such reforms. Based on case studies of Switzerland, Sweden, and the Netherlands, I test the accuracy of this thesis and find that it does not apply to either of these cases: in Switzerland pro-shareholder reforms were made possible by centre-right not centre-left support; In Sweden and the Netherlands pro-shareholder reforms were marginal, because a broad coalition uniting centre-right and centre-left opposed them. My findings show therefore that the 'party paradox' is not a universal phenomenon and that most micro-level explanations of this phenomenon are inaccurate. In order to explain in which cases a party paradox will emerge, we need to add the nature of relations between employees and employers (cooperative vs. confrontational) as a determinant of centre-left preferences.

Suggested Citation

  • Gerhard Schnyder, 2008. "Revisiting the Party Paradox of Finance Capitalism: Evidence from Switzerland, Sweden and the Netherlands," Working Papers wp372, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp372
    Note: PRO-2
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    JEL classification:

    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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