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Does the Logic of Collective Action Explain the Logic of Corporatism?

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  • Wallerstein, Michael

    (Northwestern University 633 Clark Street Evanston, IL 60208 Evanston)

  • Moene, Karl O.

    (Dept. of Economics, University of Oslo)

Abstract

Mancur Olson's Logic of Collective Action has provided the dominant framework for understanding the impact of encompassing unions and employers confederations on wage-setting in Western Europe. In particular, scholars have drawn upon Olson's writing to descripe corporatism as a means for attaining the collective goods of low unemployment and low inflation in highly unionized labor markets. The strongest impact of corporatist institutions in the labor market, however, was to generate greater wage equality rather than superior macroeconomic performance. To understand the most important impact of corporatist institutions, a new framework that emphasizes the effect of wage-setting institutions on the distribution of wages and salaries is needed. In this paper, we present one component of such a framework with a model that illustrates how both employers and unions might gain by central agreements that reduce wage inequality relative to the equilibrium wage distribution with decentralized wage-setting.

Suggested Citation

  • Wallerstein, Michael & Moene, Karl O., 2002. "Does the Logic of Collective Action Explain the Logic of Corporatism?," Memorandum 15/2003, Oslo University, Department of Economics.
    • Handle: RePEc:hhs:osloec:2003_015
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    File URL: http://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2003/Memo-15-2003.pdf
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    References listed on IDEAS

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    Cited by:

    1. Moene, Karl O. & Wallerstein, Michael, 2002. "Social Democracy as a Development Strategy," Memorandum 35/2003, Oslo University, Department of Economics.
    2. Barbara Vis & Jaap Woldendorp & Hans Keman, 2013. "Examining variation in economic performance using fuzzy-sets," Quality & Quantity: International Journal of Methodology, Springer, vol. 47(4), pages 1971-1989, June.

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    More about this item

    Keywords

    Wage setting; unions and employers confederations; corporatist institutions;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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