Transcript How Parties of Corporatist-Conservative Welfare States

How Parties of CorporatistConservative Welfare States
Respond to the International
Economy A Comparison of
Austria & Germany
Andrea B. Haupt
University of California Santa Barbara
Globalization and Political PartiesResearch Questions:
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How does rising international economic openness influence parties’
ideological positioning on economic issues? Do we observe policy
convergence? Divergence? Neither? A shift in policy regime?
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Have social democratic parties embraced neoliberalism in light of
systemic economic pressures? Has neoliberalism become their new
policy paradigm and is social democracy facing a crisis?
Do the neoliberal pressures associated with economic openness allow
Christian-democratic and/or mainstream conservative parties to shift
further to the right?
If parties change their ideological positioning, how does this affect
intra-party relations? Inter-party relations?
If parties are in government, how does this affect their policy
moves?
The Effect of Globalization on
the Welfare State:
Conflicting Predictions
Convergence
 globalization entails a loss of state power over markets because it
increase the influence of capital vis-à-vis labor, capital mobility
undermines politics of intervention, of redistribution and a large
public sector (e.g. Berger 2000; Glyn 2001; Rodrik 1997)
vs.
Divergence
 Empirical evidence of welfare state expenditure
 The role of institutions
 Popular demands for compensation
Globalization & Political Parties
Convergence
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Some believe that the pervasive influence of transnational actors
and financial flows undermines parties’ ability to satisfy local
interests, which in turn undermines party’s legitimacy (Mair 1995)
Partisan-decline thesis: based on the logic of convergence, it will
become inconsequential “whether the left or the right wins the
election, [as] the constraints of the internationalized economy will
oblige either party to follow the same monetary and fiscal policies”
(Berger 2000:51).
Globalization and Social
Democracy
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The future of social democracy has sparked especially wide interest
in the scholarly community (Callaghan 2003; Garrett 1998; Glyn 2001;
Kitschelt 1994; Kuhnle 2000; Ladrech 2000; Lordon 2001; Luther and
Müller-Rommel 2002; Mishra 1999; Notermans 2001; Pierson 1995,
1999; Przeworski 1985; Roder 2003; Scharpf 1999, 2001; Schmitt 2002;
Thompson 2000 )
Electoral dilemma: social democracy caught in a “catch-22:” they
must either scale down their commitments, or promise what they are
unable to deliver to their electorate (Heywood et.al. 2002)
Globalization and Mainstream
Rightwing Parties
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Christian democratic parties have played an important role in the
development of the welfare state (Kalyvas 1996). However, their
role in welfare state retrenchment or their reaction to globalization
has not been explored widely
Few theories to explain the behavior of Christian-democratic or
mainstream conservative parties to globalization (but see Kaiser and
Gehler 2004)
Convergence argument: implies that right-wing parties are more
static on the left-right ideological spectrum?
Partisan Decline
Is there evidence for convergence?
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Glyn (2001) finds that in the time period between 1980 and 2000,
numerous leftist governments accepted orthodox policies
Ladrech finds that following support for European integration,
European social democrats were faced with “the loss of a critical
area of programmatic distinction and identity from…. right of
center parties” (Ladrech 200:4).
Huber and Stephens (2001) confirm a decline of partisan political
effects, while the economic agenda “is by and large either a defense
or retrenchment of the welfare state. Expansion is off the agenda”
(2001:6)
Przeworski states “the major policy innovation of social democrats
was the very idea that capitalist economies can be regulated and
the effects of markets can be corrected” (Przworski, 2001, p. 327).
Przeworski concludes that “[t]he policy regimes are converging
again, this time to the right” (Przeworksi 2001:325).
Why Convergence might not be
as Likely as Predicted
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Social democratic parties have traditionally been more policy-seeking
than their conservative parties. Przeworski and Sprague (1986)
argue that socialist parties sought to transform society and shape
public opinion, which renders them ideologically less flexible than their
right-wing parties which typically defend the status quo
Organizational ties to unions arguably also contribute to ideological
inflexibility, as these ties uphold an association with the working
class even when social-democratic parties pursued cross-class
electoral strategies (Adams, Haupt, Stoll 2006, forthcoming).
public opinion has consistently supported existing national welfare
state structures and has arguably become disenchanted with
neoliberalism (Przeworksi 2001).
**Right-wing parties might have an incentive to shift further right
The Hypotheses

Based on the assumption that parties simultaneously seek votes,
office and policies (Müller and Strom 1999) , I argue that neoliberal
convergence is not an inevitable outcome of economic openness
(Hypothesis 1).
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First, though leftist parties are pressured to adopt “third ways,” their
traditional policy-seeking orientations, their quest to shape public
opinion, as well as their organizational links to unions limit their
ideological flexibility and their responses to neoliberal pressures (SubHypothesis 1a).
By contrast, rightist parties are expected to benefit from economic
openness, as market oriented policies complement their economic
policy approach. While rightist parties face incentives to move further
to the right, they continue to be office seekers and, thus, move to the right
only if this move is electorally advantageous (Sub-Hypothesis 1b).
Building on hypothesis, I argue that the whether social democratic
parties are in government or in opposition should influence the
severity of their “electoral dilemma.” Thus, social democratic parties
in office should be more responsive to neoliberalism than social
democratic parties in opposition (Hypothesis 2).
Methodology
My analysis of the parties’ economic policy evolution
 is primarily based on qualitative research (e.g. interviews with
policy actors) conducted during field work
 the study of parties’ programs
 the extant literature on Austria’s and Germany’s parties
 data published by the Comparative Manifesto Research Group
Austria’s vs. Germany’s Social
Democrats
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‘Alive and well’ vs. ‘divided and in a crisis’
both parties embraced neoliberalism – the
Austrian Social Democrats (SPÖ) temporarily
during the 1990s, the German Social Democrats
half-heartedly since 1998
both parties embraced the market while in
government
Austria’s vs. Germany’s Christian
Democrats
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‘alive and well’ vs. in a crisis
both parties have oriented themselves toward
the market, the Austrian ÖVP to a greater degree
than the German CDU
the Austrian ÖVP has aggressively pursued
welfare state reform while in office since 2000
Convergence, Divergence or
Neither?
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Austria: divergence/polarization and important
break in consensus-oriented politics
Germany: no convergence, some polarization.
both parties internally divided
Comparison of Germany & Austria
Austria
Germany
Social Democracy
Christian Democracy/
Conservative
1970s:
in government,
+ Keynesianism
1970s:
in opposition,
+ Keynesianism
1980-90s:
in government,
+ market
1980-1990s:
in government,
+ market
2000-2006:
in opposition,
- market, + Keynesianism
2000:
in government,
+ market
1970s:
in government,
+ Keynesianism then – Keynesianism
1970s:
in opposition,
social-market economy with some
Keynesianism
1980-98:
in opposition:
disorientation, Keynesianism
1998-2005:
in government, + market
1982-1998:
in government: + market (EU),
1998-2005:
in opposition,
+market
The Argument
Based on a study of Austria’s and Germany’s catch-all parties, I present
three central findings:
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1. Systemic constraints stemming from the internationalization of the
economy have entailed an upsurge of market-oriented policies however, this has NOT led to neoliberal policy convergence nor is
there sufficient evidence to claim that neoliberalism has become
dominant policy regime
2. Economic openness entailed increased policy divergence, as
economic openness has opened a window of opportunity for
conservative parties to pursue market-oriented structural reforms,
while social democratic parties remain reluctant to commit to ‘third
ways.’ Along with divergence, a rise in both intra-party and interparty tensions can be observed.
3. The degree of polarization is less if social democratic parties have
been in office; lending support to arguments about social democratic
parties’ electoral dilemmas
Austria’s Parties on Economic Policies
Figure 1: Comparison of Social Democrat’s and People’s Party Shifts on Economic Policy
Proposals and Reference to the European Union
Comparison of Social Democrats' and People's Party's Shifts of Economic and
EU Policies
40.00
30.00
10.00
SPÖ Left-Right Shifts
ÖVP Left-Right Shifts
0.00
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49
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51
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61
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20
01
CMP Scale -100 to 100
20.00
-10.00
-20.00
-30.00
Election Years 1949 to 2002
Austria’s Parties on Social Justice
Figure 2: Comparison of Austrian Social Democrat’s and People’s Party References to Social
Justice
Comparison of SPÖ's and ÖVP's Emphases of "Social Justice"
20.00
18.00
16.00
12.00
SPÖ Emphasis Social Justice
10.00
ÖVP Emphasis Social Justice
8.00
6.00
4.00
2.00
0.00
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52
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55
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20
00
Salience of Issue
14.00
Election Years 1949-2002
Germany’s Parties on Economic Policies
Figure 3: Comparison of Social Democrats’ and Christian Democrats’ Shift on Economic and
EU Policy

Comparison of Social Democrats' and Christian Democrats' Shifts on Economic and
EU Policies
20.00
20
00
19
97
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94
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91
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52
0.00
19
49
CMP Scale -100 to 100
10.00
CDU Left-Right Shifts
-10.00
SPD Left-Right Shifts
-20.00
-30.00
-40.00
Elections 1949-2002
Germany’s Parties on Social Justice
Comparison of CDU's and SPD's Emphases of "Social Justice"
10.00
9.00
8.00
6.00
CDU Emphasis Social Justice
5.00
SPD Emphasis Social Justice
4.00
3.00
2.00
1.00
Election Years 1949-2002
20
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0.00
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49
Salience of Issue
7.00
CMP Left--Right Measure for Position
on Economy
A. Rightist Position
B. Leftist Position
per108 EU Reference positive
Per110 EU Reference Negative
per401 Free Enterprise
per403 Market Regulation
per402 Incentives
per404 Economic Planning
per407 Protection Negative
per 405Corporatism
per414 Econ Orthodoxy
per406 Protec Positive
per505 Welfare Limitation
per409 Keynesian Demand Management
Right-Left Index Economy (A-B)
per412Controlled Econ
per413Nationalization
per 415 Marxist Analysis
per416 Anti Growth
per504 Welfare State Expansion
per702 Labour Groups negative
per701 Labour Groups positive
Sum of Column B subtracted form
sum of Column B = Left_Right
Index for Economy
Austria Economic Openness
Figure 1: Austria Economic Openness
Austria Economic Opennss
120
100
Exports as % of GDP
Imports as % of GDP
Trade as % of GDP
Capital Flows as % of GDP
FDI as % of GDP
60
40
20
1968-2001
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
19
78
19
76
19
74
19
72
19
70
0
19
68
% of GDP
80
Germany Economic Openness
Germany Economic Openness
80
70
60
Export as % of GDP
Import as % of GDP
Trade as % of GDP
Capital Flows as % of GDP
FDI as % of GDP
40
30
20
10
1971-2001
1
9
20
0
19
9
7
19
9
95
19
93
19
91
19
9
19
8
87
5
19
3
19
8
19
8
81
19
7
79
19
19
7
5
19
7
73
19
71
0
19
% of GDP
50
Contribution
The findings
 call arguments about neoliberal convergence
into question
 point to the importance of right-wing parties for
the globalization research agenda
 facilitate a better understanding of the policy
dynamics underlying ideological change and
constancy
Remaining Questions
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The role of institutions
Under what conditions – if at all, will we
observe neoliberal convergence?