Power resource theory revisited: The perils and promises for understanding contemporary labour politics

While their power is declining, unions and workers remain prominent actors in society. Therefore, there is a need to bring power resource theory back to the analytical forefront in the study of contemporary labour politics and labour market sociology. It provides the analytical perspectives necessary for a comprehensive and historical understanding of labour markets and labour politics. However, this article argues that the original theory developed by Korpi needs to be reassessed and further developed. Revisiting the original theory and reviewing common criticism, the authors argue that power resource theory should pay closer attention to how different types of power resources are mobilised and used and how actors’ interests are shaped during that process. The article seeks to address these issues and thus move power resource theory forward and pave the way for future theorisation.

Power Resources and Income Inequality in Switzerland and Singapore

This chapter endeavours to explain rising inequality in Singapore and Switzerland from a power-resource theory perspective which will be accompanied with the idea of trilemma between earnings equality, full employment, and budgetary restraint. Recent decade has observed rising inequality in two countries, and this chapter mainly argues that the limited role of labour in policymaking process seems to be one but critical explanatory variable in highly decentralised and centralised political context in Switzerland and Singapore, respectively. Besides the role of political institutions, distinct experiences with labour unions, historical evolution of social policies, the need for more integration with world economy, and ageing are also taken into account for a comprehensive understanding of forces behind rising inequality which is instrumented as the gap between top and lower income deciles. This chapter concludes that all forces interdependently play their respective roles; meaning it is difficult to separate one from another. Finally, it calls for being responsive to incessant changes in domestic arena with a focus on shifts in demography, labour demand, aspiration of the youth while maintaining soundness of fiscal capacity.

A comparative capitalism perspective on the privatization of governance: Business power, nonbusiness resistance and state enforcement in Germany, 2000–2010

The privatization of governance including the institution of nonbinding corporate social responsibility (CSR) frameworks to govern the social and economic conduct of large corporations is a controversial global process, which unfolds between and within nations. Studies of transnational private governance suggest that CSR frameworks reflect bargains between business and nonbusiness actors, reached on the background of the unfeasibility of intergovernmental binding regulation. But what explains the rise of such multi-stakeholder initiatives on the national level—and particularly in European coordinated market economies—where public forms of governance are historically well-institutionalized and more feasible? Based on our power resource theory (PRT)-informed study of Germany’s adoption of a national CSR framework, we argue that such settings motivate nonbusiness actors to resist, rather than engage in, business-driven processes of the privatization of governance. The struggle is decided by the state, which in Germany used its public power to enforce multi-stakeholder consensus around privatized forms. Our findings thus extend scholarly recognition of the role played by public authority in the privatization of governance. More generally, we promote a comparative capitalism perspective for the study of the politics of private governance.

What do workers want? Institutional complementarity as a mechanism of social change

This article presents a theory of social protection expansion in late-developing open economies based on actors’ perceptions of complementarity. Drawing on recent theories of institutional change and political economic theories of welfare regimes, the article explains why in late-developing open economies, processes of liberalization often result in social welfare expansion. The explanation is based on the existence of institutional complementarity between the production regime and the social welfare regime. The article offers an agent-based theory of change according to which actors – state or market actors – are likely to promote welfare expansion amid their expectations of higher payoffs and/or improved performance of the liberalized economy. This theory challenges the more conventional Power Resource Theory, according to which welfare regimes are shaped primarily by the balance of power between workers and employers. To test the theory, the article analyzes the enactment of the unemployment insurance law in Israel (1972).

Explaining Quebec's Social Economy Turn

Québec has been structuring and promoting a social economy sector since the mid-1990s. What explains this specificity of the Québec social model? Careful process tracing analysis reveals that the mobilization of Québec’s left in the mid-1990s, followed by coalition engineering during the 1996 economy and employment summit, account for Québec’s distinct trajectory. Consistent with power resource theory (PRT), at the agenda-setting stage, protagonists of Québec’s social economy policies were associated with the left. Contrary to what is assumed by PRT, however, at the decision stage, the right’s consent to social economy policies was not conditioned by a weak bargaining position or by a fear of antagonizing voters.RÉSUMÉLe Québec appuie et structure un secteur de l’économie sociale depuis le milieu des années 1990. Comment expliquer cette spécificité du modèle social québécois? Une analyse attentive du retraçage des processus révèle que la mobilisation de la gauche québécoise au milieu des années 1990, suivie d’une coalition autour de l’économie sociale formée au moment du Sommet sur l’économie et l’emploi en 1996, expliquent la trajectoire distincte du Québec. De façon cohérente avec la théorie des ressources de pouvoir (PRT), à l’étape de la mise à l’agenda, les protagonistes des politiques visant à appuyer l’économie sociale au Québec étaient associés à la gauche. Contrairement à ce qui est supposé par la PRT, cependant, à l’étape de la prise de décision, l’appui de la droite à ces politiques ne reposait pas nsur un faible rapport de force ou sur une crainte de s’aliéner les électeurs.

Politics, Institutions, and Diversified Business Groups

This chapter examines the effects of national level politics and institutions on the long-term evolution of diversified business groups. A central goal of this chapter is to connect the analysis of business groups to broader debates on the political economy of advanced capitalism, especially varieties of capitalism, power resource theory, legal families, and entrenchment. States (through regulations) and firms (via their corporate practices, especially concentrated ownership and cross-ownership) across much of continental Europe and Japan protected business groups by forestalling takeovers, while capital markets in liberal economies encouraged the formation of new kinds of business groups (especially private equity) by facilitating takeovers. Brief summaries of the evolution of business groups over the past century in Sweden and the United States illustrate these different dynamics in coordinated and liberal economies.

The future of the standard employment relationship: Labour law, new institutional economics and old power resource theory

This article addresses two questions about the standard employment relationship that have become prominent in labour law literature: Does it exacerbate inequality? Is its decline inevitable? The focus is on the second question and emphasizes the extent to which the standard employment relationship was both embedded in, and the outcome of, an institutional ensemble that was fashioned out of the post-war capital–labour compromise in industrialized democracies. The analysis proceeds in three steps. The first is conceptual and stresses the distinctive nature of labour as a fictive commodity, and the recurring regulatory dilemmas that arise in any attempt to institutionalize a labour market. The second step historicizes and contextualizes the employment relationship, emphasizing politics and conflict (power resource theory) over rational choice and coordination (new institutional economics) as the basis for its institutionalization. The emphasis on politics, power and labour leads to the third step, which focuses on how the broad process of financialization influences three key institutions – the large manufacturing firm, the democratic welfare state and autonomous trade unions – that have been crucial for the development of the standard employment relationship.

Inequality, Protests, and the Progressive Allocation of Cash Transfers in the Argentine Provinces

In the last 20 years, two broadly defined theories have sought to explain the relationship between economic inequality and redistribution. The well-known hypothesis set forth by Meltzer and Richard (1981) states that larger income differences between the median voter and the average income earner should increase redistributive pressures in democratic regimes. Power Resource Theory (PRT), by contrast, argues that income inequality breeds power inequality and should dampen redistribution. Critical to both theories is the translation of redistributive interest into policy signals. This article considers protests as signals that increase the salience of inequality among voters. Results provide evidence that protests facilitate more progressive cash transfers in highly unequal environments but have modest effects in more egalitarian ones.