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Corporatism and Capital Accumulation: The Fate of the Social Corporatist Model

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  • Jonathan Perraton

    (Department of Economics, University of Sheffield, UK)

Abstract

An extensive literature has examined whether corporatist national wage bargaining systems can deliver superior economic performance, but this has mostly focused on short run indicators. Such systems of industrial relations could provide incentives for investment if organized labour can credibly pre-commit to wage moderation. This paper examines this, building on monopoly union models that indicate the response of corporatist wage bargaining arrangements to investment. The paper estimates the response of wage bargaining to capital investment, conditional on outside options, in six key economies widely characterized as having sustained corporatist bargaining arrangements over 1970-2017. The econometric approach allows changes in regimes to be determined endogenously; these shifts appear consistent with wider evidence on changes in bargaining arrangements and financial integration of these economies.

Suggested Citation

  • Jonathan Perraton, 2022. "Corporatism and Capital Accumulation: The Fate of the Social Corporatist Model," Working Papers 2022005, The University of Sheffield, Department of Economics.
    • Handle: RePEc:shf:wpaper:2022005
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    File URL: https://www.sheffield.ac.uk/economics/research/serps
    File Function: First version, March 2022
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    More about this item

    Keywords

    Social corporatism; Capital accumulation; Wage bargaining; Eichengreen hypothesis; Structural breaks;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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