Partisan politics and the varieties of employment relations and HRM

Abstract

This paper addresses the extent to which cross-national variation in institutions in the labour market is influenced by the role of the state. It examines the impact of the partisan political complexion of a country's government over time, measured on a left–right scale. Countries which have experienced more right-wing governments have lower trade union density, more decentralised bargaining, lower collective bargaining coverage and less encompassing initial apprentice-type training programmes. Right-wing governments are also negatively associated with the extent of employee voice. This paper challenges two central contentions of varieties of capitalism theorists. First, left governments are more important than employer coordination in sustaining collective industrial relations systems. Second, national culture is a better predictor of skill formation and job tenure than employer coordination.

Keywords:

• employment relations
• HRM
• national culture
• political partisanship
• varieties of capitalism

Acknowledgements

The author acknowledges the collaboration of Howard Gospel and Andrew Pendleton in assembling the data base on which this paper was based. He thanks Howard Gospel for comments on an early draft of the paper. The author is solely responsible for the content of this paper.

Notes

1. Hofstede's PDI is defined as ‘The extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally’. His UAI is defined as ‘the extent to which members of a culture feel threatened by uncertain or unknown situations’ (2001, pp. 98, 161). When the Left–right politics variable is regressed on Hofstede's national cultural variables MAS, PDI and UAI, the coefficients on all variables are statistically significant. The adjusted r ² is 0.62, indicating that the cultural variables are together associated with two-thirds of the variation in the Left–right politics variable.

2. It is not clear what the underlying source of employer coordination is, but 31% of the variance in the scores for employer coordination (Layard, Nickell and Jackman 1991) is accounted for by Hofstede's three cultural variables MAS, PDI and UAI.

3. Some of the assertions of the ‘coordinated employers’ model were challenged in Black (1994).

4. Since this latter grouping will include only France and Italy in our sample (see Table 1), we cannot model this cluster effect precisely.

5. Hofstede's IDV index measures the degree to which people in a country prefer to act as individuals rather than as members of primary groups (201: 225). The opposite of individualism can be called collectivism (low IDV).

6. There is also a statistically significant positive association between the IDV index and the CEO/manual pay ratio. Pay dispersion at firm level is more dispersed in more individualist societies. Inclusion of the IDV variable in the regression results in the coefficient on the employer coordination variable becoming less significant (at the 0.10 level).

7. For most of our comparative employee voice and HRM variables, time series data do not exist.