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Performance in a Hostile World: Economic Growth in Capitalist Democracies, 1974–1982

Published online by Cambridge University Press:  13 June 2011

Geoffrey Garrett  and
Peter Lange
Geoffrey Garrett
Affiliation:
Nuffield College, Oxford
Peter Lange
Affiliation:
Department of Political Science, Duke University
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Abstract

Many recent studies argue that labor organization and government partisanship were important determinants of the economic performance of the advanced industrial democracies during stagflation. They do not, however, take into account the potential impact on performance of position in the international economy; the relationships reported may therefore be largely spurious. Even when the strong effects of international position, most notably the extent of dependence on imported sources of oil, were controlled for, domestic political structures remained powerful determinants of economic performance during stagflation. “Corporatist” political economies dominated by leftist governments in which labor movements were densely and centrally organized, and “market” political economies in which labor was much weaker and rightist governments were predominant, performed significantly better than the less coherent cases in which the power of labor was distributed asymmetrically between politics and the market.

Type
Research Article
Information
World Politics , Volume 38 , Issue 4 , July 1986 , pp. 517 - 545
Copyright
Copyright © Trustees of Princeton University 1986

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References

1 David R. Cameron, “Social Democracy, Corporatism, and Labor Quiescence: The Representation of Economic Interests in Advanced Capitalist Society,” and Scharpf, Fritz, “Economic and Institutional Constraints of Full-Employment Policies,” both in Goldthorpe, John H., ed., Order and Conflict in Contemporary Capitalism (New York: Oxford University Press, 1984)Google Scholar. See also Bruno, Michael and Sachs, Jeffrey, Economics and Worldwide Stagflation (Cambridge: Harvard University Press, 1985)CrossRefGoogle Scholar; Lange, Peter and Garrett, Geoffrey, “The Politics of Growth,” Journal of Politics 47 (August 1985), 792–827CrossRefGoogle Scholar; Schmidt, Manfred, “The Role of Parties in Shaping Macro-Economic Policy,” in Castles, Francis, ed., The Impact of a Parties (Beverly Hills, CA: Sage, 1982)Google Scholar; Schmidt, Manfred, “The Welfare State and the Economy in Periods of Crisis,” European Journal of Political Research 11 (No. 1, 1983), 1–26CrossRefGoogle Scholar; Whiteley, Paul, “The Political Economy of Economic Growth,” European Journal of Political Research 11 (No. 2, 1983), 197–213CrossRefGoogle Scholar.

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29 See Cameron (fn. 1), and Schmidt (fn. 1, 1982 and 1983). The specific performance indicators vary across these and other studies.

30 Lange and Garrett (fn. 1). See also Colin Crouch, “Conditions for Trade Union Wage Restraint,” and Charles S. Maier and Leon N. Lindberg, “Alternatives for Future Crises,” both in Maier and Lindberg (fn. 26).

31 Lange and Garrett (fn. i), 794–801.

32 For an analysis of a series of conditional regression models concerning the relationship between domestic political structures and economic growth, see Lange and Garrett (fn. 1), 811–20. After completion of the present manuscript, we received some thoughtful comments on these results by an anonymous reader. They suggest possible improvements in the statistical techniques employed by using ridge regression to reduce further the multicollinearity inherent in interaction models and develop a more extensive model of the political determinants of economic growth. They do not, however, affect the results with respect to the domestic political structures variable employed in the present analysis in ways that would lead us to question the arguments we develop here regarding the relative explanatory importance of the domestic and international variables examined. For a critique of and response to the methodology and results of our original article, see Robert W. Jackman, “The Politics of Economic Growth in the Industrial Democracies: Leftist Strength or North Sea Oil?” and Peter Lange and Geoffrey Garrett, “The Politics of Growth Reconsidered,” both in Journal of Politics, forthcoming.

33 Cameron (fn. 1); Crouch (fn. 30).

34 Keohane (fn. 3).

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41 Ibid., 1257.

42 Ruggie (fn. 13); Katzenstein (fn. 16).

43 Cameron (fn. 1); Schmidt (fn. 1); Bruno and Sachs (fn. 1); Lange and Garrett (fn. 1).

44 Zysman and Tyson (fn. 11), 27.