When politics gets in the way: domestic coalitions and the making of skill systems

Examining the recent evolution of public skill institutions and the diverging trajectories of institutional change, this paper focuses on skill certification systems, empirically drawing from two middle-income countries (MICs), Mexico and Turkey. Building on the argument that small and medium-sized enterprises (SMEs) prefer public skill systems to generate a technically skilled workforce more than large firms do, it puts forward that governments supporting and being supported by SMEs will be more willing to endorse skill certification systems for their distributional consequences. It argues that public skill institutions are embraced to varying degrees based on cost-benefit calculations of domestic elites; and only adopted effectively if they are in concord with key actors’ interests. Therefore, this paper contributes to the emerging literature on skill politics in the MICs by examining the dynamics of domestic political coalitions that support or prevent the development of skill institutions based on extensive empirical analysis, and it agrees with the arguments emphasizing the importance of SMEs’ presence in political coalitions for skill reforms. Furthermore, it provides important evidence against the arguments on institutional convergence in the age of globalization by showing the varying outcomes of similar external pressures in the MICs.