The Dynamics of Trade Unionism and National Economic Performance

TLDR

Trade union influence on wage moderation is debated, with theories emphasizing either centralized labor movements or coordination under institutional conditions, and suggesting that monopoly among unions may be the key factor. The study tests two theories of trade union political processes, aiming to disentangle the separate effects of union centralization and monopoly on national economic performance and to reassess the conceptual basis of corporatism indices. Analysis of OECD data (1963–1985) confirms that union monopoly better predicts national economic performance than centralization or composite corporatism indices.

Abstract

I test two theories of the political processes of trade unions. The first argues that wage moderation depends on a centralized labor movement. The second contends that, institutional conditions permitting, unions' coordination of bargaining strategies is sufficient. Coordination is most likely to he achieved when there are small number of unions that do not compete for members, that is, when union monopoly is high. Important empirical anomalies may be resolved by analyzing the effects of union centralization and monopoly separately, rather than combining them into a composite index of corporatism. Reanalyzing comparative data from Organization of Economic Cooperation and Development countries between 1963 and 1985 largely corroborates the hypothesis that monopoly is more important than either centralization or composite indices of corporatism for national economic performance. The conceptual rationale underlying indices of corporatism should be reexamined.