Home » Building and using strategic capacity: Labor union confederations and economic policy. by John S. Ahlquist
Building and using strategic capacity: Labor union confederations and economic policy. John S. Ahlquist

Building and using strategic capacity: Labor union confederations and economic policy.

John S. Ahlquist

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ISBN : 9780549817178
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219 pages
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This project begins to explain how economic actors aggregate their interests and how these aggregates develop the capacity to influence national-level policy, with an empirical focus on national labor union confederations. The first part asks whyMoreThis project begins to explain how economic actors aggregate their interests and how these aggregates develop the capacity to influence national-level policy, with an empirical focus on national labor union confederations. The first part asks why labor unions form confederal organizations and what explains the variation in the confederal authority over affiliates. I devise a model of confederal organization in which unions have an incentive to cooperate in collective projects but vary in how much they value its output. To enable cooperation, unions can sign a contract that allocates decision rights over collective effort. Weaker affiliates have an incentive to yield decision rights to the stronger. Stronger unions will only permit confederal influence over wage bargaining when there are pronounced economies of scale and/or they are compensated in other ways. The model predicts a trade-off between the size of the confederation and the scope of activity. Subsequent chapters explore the model empirically. Chapter 3 is a historical study of the American Federation of Labor and the Knights of Labor. Chapter 4 presents the first econometric study of union confederal centralization. I find evidence for the size-scope trade-off and that political institutions affect the degree to which unions centralize membership and authority in confederal organizations.-The second half explores formal policy agreements between governments and unions. In chapter 6 I model these agreements as self-enforcing contracts that allow political parties to make policy promises credible to voters. The model implies that (1) pacts should follow the electoral cycle and (2) long-term linkages between unions officials and politicians provide incentives to negotiate and can make agreements self-enforcing in equilibrium. Chapter 7 is a survival analysis of pact onset using an original dataset of social pacts covering 20 OECD countries, 1974-2000. I find that pacts are influenced by the electoral cycle. In chapter 8 I apply the model to an empirical puzzle in the cases of Australia and New Zealand, 1982-1996. The organizational relationship between the union peak associations and the Labor parties were the critical differences that made intertemporal political transactions possible (and self-enforcing) in Australia but not in New Zealand.