Party Politics and the Default Move from Coordination to Liberalism

Abstract

This article delves into the origins of the first national multi-sector employers' associations in Denmark and the United Kingdom to understand why some countries produce highly-centralized, unitary national business associations, which develop labor market coordination with unions and the state. In contrast, other countries conclude their experiment with coordination by ultimately falling back on laissez-faire liberalism. In particular, I explore how the structure of party competition works to augment or to diminish coordination among employers. I argue that the interplay of party politics in the policy-making process influenced the incentives of opposing parties to block the legislation sought by employers, informed the incentives of the business-oriented right parties to delegate policy-making authority to private business and labor organizations, and shaped the capacities of employers to get what they wanted from the state.