1932

Abstract

The understanding of observable associations between institutions and inequality today requires a better grasp of the process driving the selection of economic institutions, in particular wage bargaining centralization agreements, as the outcome of a distributive conflict in which inequality itself plays a prominent role. Low levels of inequality facilitated the adoption of encompassing wage centralization agreements during the early twentieth century in Europe, thereby creating a long-term association between low inequality and high centralization that, for a large subset of cases, remained stable throughout the century. We develop a theoretical argument as to why inequality should lead to lower levels of coordination and test it against competing hypotheses on the basis of a database on 11 OECD nations between the 1910s and the 1950s.

Loading

Article metrics loading...

/content/journals/10.1146/annurev-polisci-032211-210535
2014-05-11
2024-04-17
Loading full text...

Full text loading...

/deliver/fulltext/polisci/17/1/annurev-polisci-032211-210535.html?itemId=/content/journals/10.1146/annurev-polisci-032211-210535&mimeType=html&fmt=ahah

Literature Cited

  1. Aaberge R, Atkinson AB. 2008. Top incomes in Norway. SSB Disc. Pap. No. 552. Statistics Norway, July 2008-07-16
  2. Acemoglu D, Pischke J-S. 1998. Why do firms train? Theory and evidence. Q. J. Econ. 113:179–119 [Google Scholar]
  3. Acemoglu D, Robinson J. 2006. Economic Origins of Democracy and Dictatorship New York: Cambridge Univ. Press
  4. Ahlquist JS. 2010. Building strategic capacity: the political underpinnings of coordinated wage bargaining. Am. Polit. Sci. Rev. 104:1171–88 [Google Scholar]
  5. Alvarez M, Garrett G, Lange P. 1991. Government partisanship, labor organization, and macroeconomic performance. Am. Polit. Sci. Rev. 85:2539–56 [Google Scholar]
  6. Atkinson AB. 2007. The distribution of top incomes in the United Kingdom, 1908–2000. See Atkinson & Piketty 2007 82–140
  7. Atkinson AB, Leigh A. 2007. The distribution of top incomes in Australia. See Atkinson & Piketty 2007 309–32
  8. Atkinson AB, Leigh A. 2005. The distribution of top incomes in New Zealand. Cent. Econ. Policy Res. Disc. Pap. 503
  9. Atkinson AB, Piketty T. 2007. Top Incomes Over the Twentieth Century: A Contrast Between Continental European and English-Speaking Countries Oxford, UK: Oxford Univ. Press
  10. Austen-Smith D. 2000. Redistributing income under proportional representation. J. Polit. Econ. 108:61235–69 [Google Scholar]
  11. Austen-Smith D, Banks J. 1988. Elections, coalitions and legislative outcomes. Am. Polit. Sci. Rev. 82:2405–22 [Google Scholar]
  12. Beck N, Katz J. 1995. What to do and not to do with time series cross-section data. Am. Polit. Sci. Rev. 89:634–47 [Google Scholar]
  13. Beramendi P. 2007. Inequality and the territorial fragmentation of solidarity. Int. Organ. 61:783–820 [Google Scholar]
  14. Beramendi P. 2012. The Political Geography of Inequality: Regions and Redistribution New York: Cambridge Univ. Press
  15. Beramendi P, Cusack TR. 2009. Diverse disparities: the politics and economics of wage, market, and disposable income inequalities. Polit. Res. Q. 62:257–75 [Google Scholar]
  16. Boix C. 1999. Setting the rules of the game: the choice of electoral systems in advanced democracies. Am. Polit. Sci. Rev. 93:3609–24 [Google Scholar]
  17. Boix C. 2003. Democracy and Redistribution Cambridge, UK: Cambridge Univ. Press
  18. Calmfors L, Driffill J. 1988. Centralization of wage bargaining. Econ. Policy 6:Apr.14–61 [Google Scholar]
  19. Cameron D. 1978. The expansion of the public economy: a comparative analysis. Am. Polit. Sci. Rev. 72:41243–61 [Google Scholar]
  20. Cameron D. 1984. Social democracy, corporatism, labor quiescence, and the representation of economic interest in advanced capitalist society. Order and Conflict in Contemporary Capitalism J Goldthorpe 143–78 New York: Oxford Univ. Press [Google Scholar]
  21. Cusack T, Beramendi P. 2006. Taxing work. Eur. J. Polit. Res. 45:143–75 [Google Scholar]
  22. Dahl R. 1971. Polyarchy, Participation, and Opposition New Haven, CT: Yale Univ. Press
  23. Dell F. 2007. Top incomes in Germany throughout the twentieth century: 1891–1998. See Atkinson & Piketty 2007 365–425
  24. Dell F, Piketty K, Saez E. 2007. Income and wealth concentration in Switzerland over the twentieth century. See Atkinson & Piketty 2007 472–500
  25. Gallagher M. 1991. Proportionality, disproportionality and electoral systems. Elect. Stud. 10:133–51 [Google Scholar]
  26. Gerschenkron A. 1962. Economic Backwardness in Historical Perspective Cambridge, MA: Harvard Univ. Press
  27. Golden M. 1993. The dynamics of trade unionism and national economic performance. Am. Polit. Sci. Rev. 87:439–54 [Google Scholar]
  28. Hall P. 1994. Central bank independence and coordinated wage bargaining: their interaction in Germany and Europe. Ger. Polit. Soc. 31:1–23 [Google Scholar]
  29. Hall P. 2010. Historical institutionalism in rationalist and sociological perspective. Explaining Institutional Change: Ambiguity, Agency and Power J Mahoney, K Thelen 204–24 New York: Cambridge Univ. Press [Google Scholar]
  30. Hall P, Soskice D. 2001. Varieties of Capitalism: The Institutional Foundations of Comparative Advantage Oxford, UK: Oxford Univ. Press
  31. Hernandez M, Rueda D. 2008. Taking exogeneity for granted: the political economy of coordination in industrialized democracies Unpublished manuscript, Dep. Polit. Int. Relat., Oxford Univ.
  32. Iversen T. 1999. Contested Economic Institutions: The Politics of Macroeconomics and Wage Bargaining in Advanced Democracies Cambridge, UK: Cambridge Univ. Press
  33. Iversen T, Soskice D. 2006. Electoral institutions and the politics of coalitions: why some democracies redistribute more than others. Am. Polit. Sci. Rev. 100:2165–81 [Google Scholar]
  34. Iversen T, Soskice D. 2009. Distribution and redistribution: the shadow of the XIX century. World Polit. 61:3438–86 [Google Scholar]
  35. Jaggers K, Gurr TR. 1996. POLITY III: Regime Change and Political Authority, 1800–1994 Ann Arbor, MI: Inter-Univ. Consort. Polit. Soc. Res.
  36. Katzenstein P. 1985. Small States in World Markets: Industrial Policy in Europe Ithaca, NY: Cornell Univ. Press
  37. Krishna V, Morgan J. 2001. A theory of expertise. Q. J. Econ. 116:747–75 [Google Scholar]
  38. Kurth JR. 1979. The political consequences of the product cycle: industrial history and political outcomes. Int. Organ. 33:11–34 [Google Scholar]
  39. Lange P. 1984. Unions, workers and wage regulation: the rational bases of consent. Order and Conflict in Contemporary Capitalism J Goldthorpe 98–123 New York: Clarendon [Google Scholar]
  40. Lee W, Roemer J. 2005. The rise and fall of unionised labour markets: a political economy approach. Econ. J. 115:Jan.1–40 [Google Scholar]
  41. Leigh A. 2007. How closely do top income shares track other measures of inequality?. Econ. J. 117:524F619–33 [Google Scholar]
  42. Lijphart A. 1984. Democracies New Haven, CT: Yale Univ. Press
  43. Mackie T, Rose R. 1974. The International Almanac of Electoral History New York: Free Press
  44. Maddison A. 1992. Monitoring the World Economy 1820–1992 Paris: OECD
  45. Mahoney J, Thelen K. 2010. A theory of gradual institutional change. Explaining Institutional Change: Ambiguity, Agency and Power J Mahoney, K Thelen 1–37 New York: Cambridge Univ. Press [Google Scholar]
  46. Mares I. 2003. The Politics of Social Risk: Business and Welfare State Development New York: Cambridge Univ. Press
  47. Mares I. 2006. Taxation, Wage Bargaining, and Unemployment New York: Cambridge Univ. Press
  48. Martin CJ, Swank D. 2012. The Political Construction of Business Interests: Coordination, Growth and Equality New York: Cambridge Univ. Press
  49. Martin CJ, Swank D. 2008. The political origins of coordinated capitalism: business organizations, party systems, and state structure in the age of innocence. Am. Polit. Sci. Rev. 102:181–98 [Google Scholar]
  50. Meltzer A, Richards S. 1981. A rational theory of the size of government. J. Polit. Econ. 89:914–27 [Google Scholar]
  51. Obinger H, Leibfried S, Castles FG. 2006. Federalism and the Welfare State Cambridge, UK: Cambridge Univ. Press
  52. Olson M. 1965. The Logic of Collective Action: Public Goods and the Theory of Groups Cambridge, MA: Harvard Univ. Press
  53. Piketty T. 2007. Income, wage and wealth inequality in France, 1901–1998. See Atkinson & Piketty 2007 43–81
  54. Piketty T, Saez E. 2007. Income and wage inequality in the United States, 1913–2002. See Atkinson & Piketty 2007 141–225
  55. Pontusson J, Rueda D. 2010. The politics of inequality: voter mobilization and Left parties in advanced industrial states. Comp. Polit. Stud. 43:June675–705 [Google Scholar]
  56. Przeworski A. 2007. Is the science of comparative politics possible?. Handbook of Comparative Politics C Boix, S Stokes 147–72 Oxford, UK: Oxford Univ. Press [Google Scholar]
  57. Przeworski A, Wallerstein M. 1982. The structure of class conflict in democratic capitalist societies. Am. Polit. Sci. Rev. 76:2215–38 [Google Scholar]
  58. Przeworski A, Wallerstein M. 1988. Structural dependence of the state on capital. Am. Polit. Sci. Rev. 82:111–29 [Google Scholar]
  59. Roine J, Waldenström D. 2006. Top incomes in Sweden over the twentieth century. Res. Inst. Indust. Econ. Work. Pap. 667, Stockholm, Sweden
  60. Rogowski R, MacRae D. 2008. Inequality and institutions: what theory, history, and (some) data tell us. Democracy, Inequality, and Representation P Beramendi, C Anderson 354–86 New York: Russell Sage Found. [Google Scholar]
  61. Rueda D. 2008. Left government, policy, and corporatism: explaining the influence of partisanship on inequality. World Polit. 60:3349–89 [Google Scholar]
  62. Rueda D, Pontusson J. 2000. Wage inequality and varieties of capitalism. World Polit. 52:3350–83 [Google Scholar]
  63. Saez E, Veall M. 2005. The evolution of high incomes in northern America: lessons from Canadian evidence. Am. Econ. Rev. 95:3831–49 [Google Scholar]
  64. Salverda W, Atkinson AB. 2007. Top incomes in the Netherlands over the twentieth century. See Atkinson & Piketty 2007 426–71
  65. Schattschneider EE. 1960. The Semisovereign People: A Realist's View of Democracy in America Hinsdale, IL: Dryden
  66. Schumpeter JA. 1975 (1942). Capitalism, Socialism, and Democracy New York: HarperCollins
  67. Soskice D. 1990. Wage determination: the changing role of institutions in advanced industrialized countries. Oxf. Rev. Econ. Policy 6:436–61 [Google Scholar]
  68. Stasavage D, Scheve K. 2009. Institutions, partisanship, and inequality in the long run. World Polit. 61:2215–53 [Google Scholar]
  69. Stephens JD. 1980. The Transition from Capitalism to Socialism Atlantic Highlands, NJ: Humanities
  70. Streeck W, Thelen K. 2005. Introduction: institutional change in advanced political economies. Beyond Continuity: Institutional Change in Advanced Political Economies W Streeck, K Thelen 1–39 Oxford, UK: Oxford Univ. Press [Google Scholar]
  71. Swenson P. 1991. Bringing capital back in, or social democracy reconsidered: employer power, cross-class alliances, and centralization of industrial relations in Denmark and Sweden. World Polit. 43:4513–44 [Google Scholar]
  72. Swenson P. 2002. Capitalists against Markets: The Making of Labor Markets and Welfare States in the United States and Sweden Oxford, UK: Oxford Univ. Press
  73. Thelen K. 2004. How Institutions Evolve: The Political Economy of Skills in Germany, Britain, the United States, and Japan New York: Cambridge Univ. Press
  74. Ticchi D, Vindigni A. 2010. Endogenous constitutions. Econ. J. 120:5431–39 [Google Scholar]
  75. Wallerstein M. 1989. Union organization in advanced industrial democracies. Am. Polit. Sci. Rev. 83:2481–501 [Google Scholar]
  76. Wallerstein M. 1990. Centralized bargaining and wage restraint. Am. J. Polit. Sci. 34:982–1004 [Google Scholar]
  77. Wallerstein M. 1999. Wage-setting institutions and pay inequality in advanced industrial societies. Am. J. Polit. Sci. 43:3649–80 [Google Scholar]
  78. Western B. 1997. Between Class and Market: Post-War Unionization in the Capitalist Democracy Princeton, NJ: Princeton Univ. Press
  79. Wilensky H. 2002. Rich Democracies: Political Economy, Public Policy, and Performance Berkeley: Univ. Calif. Press
  80. Windmuller JP, Gladstone A. 1984. Employers Associations and Industrial Relations: A Comparative Study Oxford, UK: Clarendon
/content/journals/10.1146/annurev-polisci-032211-210535
Loading
/content/journals/10.1146/annurev-polisci-032211-210535
Loading

Data & Media loading...

  • Article Type: Review Article
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error