PARTIES/ASSOCIATIONS

The major interest associations run by the employers and business groups and the trade unions all propose practical, plausible policies. The main explanation for this is that there is a long history of involvement and policy consultation with most of the groups (business groups are closely allied with the Liberal Party, for example, farmers’ and rural groups with the National Party, and trade unions with the Labor Party).

Many elected representatives have, at some point in their career, been a member of one of these groups, further cementing relations with the interest groups. There are also considerable formal and informal networks linking the various groups to the major political parties, further consolidating the development of practical and coherent policies.

The major interest associations all propose practical, plausible policies. The Norwegian Confederation of Trade Unions and the Confederation of Norwegian Enterprise have for years been engaged in very close tripartite cooperation with the government. Through this process, these organizations – in combination with the government – have been able to prevent strikes, secure a moderate salary policy and ensure moderate inflation and interest rates.
At the same time, this cooperation has been regarded as important for promoting gradual governmental reforms in areas such as health insurance and pension plans. In their work, these interest organizations rely to a large extent on scholarly knowledge, and typically apply a long-term perspective.
In many other policy fields we see some of the same patterns of organized cooperation. Employers’ association groups have traditionally been allied with the conservative parties, farmers’ groups with the Center Party, and trade unions with the Labor Party. These ties are most explicit between the Labor Party and the labor unions, with the head of the labor union’s confederation sitting on the party’s executive committee. The unions and the employers’ association both have academics as advisors, and their proposals normally aim at consensus rather than pursuing social confrontation.

Sweden has a corporatist tradition, meaning that interest associations are more or less perennial players in the policy process. For this system to work it is essential that organized interests take some degree of responsibility both in terms of the quality of their proposals and supporting the implementation of public policy. While corporatism overall has been weakened during the 1990s and 2000s, the major interest associations in Sweden still participate regularly in the policy debate and have extensive contacts with central and subnational governments. Private business associations belong to this category of associations. They have a long history of being consulted on policy matters. It is difficult to assess their actual influence on policy decisions but it seems clear that governments of both the political left and right are open to major business associations.
That having been said, the key role of these associations is first and foremost to promote the interests of their members. Given the long history of corporatism they do have understand what policymaking and responsibility is about. Nevertheless, from time to time they present policy proposals which are more reflective of their constituency’s interests than the best interests of the country as a whole. A very similar pattern applies to the major unions, both blue-collar and white-collar. Nevertheless, for the period under review we can assess that most economic interest associations formulate reasonable policy alternatives.

Since 1945, the major economic interest groups (i.e., the three major chambers for labor, business and agriculture as well as the Austrian Trade Union Federation and the Association of Austrian Industrialists) have played a significant role in stabilizing the Austrian economy directly and Austrian democracy indirectly. They have been major partners in the Austrian version of “consociational democracy,” a system of permanent power-sharing which tends to play down the meaning of winner and loser, of majority and minority. The post-World War II political culture was dominated not only by the major parties but also by the social partners.
This success is attributed to the system’s high degree of representativeness. In the past, most Austrians not only belonged to but identified with one of the groups. The links of these groups to the two major parties prevented cleavages between party politics and interest group politics. There was also a broad acceptance of a “third way” between capitalism and socialism. Interest groups have therefore been able to produce much more consistent and coherent policy proposals.
In the 1980s, the conditions for this success story began to change. The concert of the economic interest groups – the social partnership – has lost some of its ability to speak for society. The rise of parties not traditionally linked to the social partners has complicated relations between parties and interest groups. With its traditional importance waning, this voice (sometimes called the “voice of reason”) has become less effective as a counterweight to populism. Though not dramatic, the palpable decline of the social partnership’s relevance in society implies that the expertise of the social partners has become less important for the government and the political system in general.

Belgium is characterized by a high level of trade union membership, and by a strong tradition of social consensus. For instance, most of the proposals on wage regulation and employee protection are the result of routine negotiations between employers’ associations and trade unions. Proposals are validated by the government and translated into law. This continuous mechanism of cooperation forces these actors to present realistic and well-argued demands (i.e., budgeted, framed in legal terms), even if some bargaining (and bluffing) may occur. Both trade unions and employers’ organizations have their own well-developed study services with high technical (legal, budgetary and so on) expertise. Notice that, in contrast to political parties, employers’ associations and trade unions have structures on a national level.
However, there are some parts of Belgian social regulations that seem hardly open to debate due to some conservatism and the need to protect this social cooperation.

Many business associations, employers groups and trade unions develop policy proposals that identify problems’ causes, make use of scholarly research to support their analysis, propose technically feasible measures to attain policy objectives, take account of long-term interests and anticipate policy effects. Some of the most competent associations in this respect are the Council of Chief Canadian Executives, the Canadian Chamber of Commerce, the Canadian Manufacturers and Exporters Association, the Canadian Labor Congress, and the Canadian Auto Workers. Many of these associations have realized that they must identify their policy proposals with the overall societal interest, rather than solely the narrower interest of their members, if they are to gain traction with the public and policymakers. The most successful are those that have mastered this art.

Interest organizations play an important role in Danish politics. Policies proposed by the major interest organizations are of course “reasonable” as seen from the point of view of the group they represent. They may not be quite as reasonable, however, as seen from the point of view of society at large, or from the viewpoint of the collective interest. That is why the views of interest organizations must be aggregated by the government.

Given the corporatist tradition in Denmark, the major interest organizations are regularly involved in policy-making. This tends to educate them to moderate their policy proposals. Interest groups know they will lose influence if they propose policies that are seen as unreasonable. They realize that they have an interest in getting things to work. The trade unions also have learned at some point that demanding very high raises in salaries will produce inflation and be counterproductive. They too have a tradition of being quite responsible and negotiating in good faith.

The large market-sector organizations representing labor and management became involved in a series of comprehensive incomes policy agreements in 1968. These concerned not only wages and working conditions but also frequently social welfare programs and corresponding legislation. While this institutional arrangement for cooperation between government and associations has now eroded to a large extent, it created a framework for advancing responsible, considered and expert-based policy proposals on the part of large economic interest associations. Other mechanisms, not least the participation of associations as members and experts in the committee system, have worked in the same direction. As a consequence, this corporatist setting and the consensus style of policy-making have lead to reasonable policies.
With the process of European integration, a transformation to the system of European interest intermediation may be expected to emerge. However, due to institutional constraints, no real convergent system of European interest integration has emerged so far. Still, pressures toward transformation exist, and in these processes, the quality of policy proposals will develop.

As in previous governments, ministries and parliamentary committees take the proposals of interest groups into account. Rule 70 Paragraph 1 of the Rules of Procedure of the German Bundestag states that “(f)or the purpose of obtaining information on a subject under debate, a committee may hold public hearings of experts, representatives of interest groups and other persons who can furnish information.” This right is used extensively. The German ministerial administration does have a considerable impact on policy formulation. Within the process of formulation, the expertise of interest groups plays a key role in providing the in-depth information required by ministerial officials. The ministerial hearings are the main gateway of influence. Lobbyists sometimes even work in ministries, which is seen as a major problem. “The borders separating legitimate representation of interests from shady politics are fluid today” (Heinze 2009: 5). Since interests are sometimes mediated through institutionalized corporatist structures, interest associations are privileged. Economic interest associations also have an influential say in German politics since their mobilization capabilities and financial resources make them important for parties’ success at the ballot box. Furthermore, association members play an important role as members of German parties. “Natural alliances” between trade unions and Social Democrats on the one hand and Christian Democrats and employers associations on the other hand do exist, but have softened in recent decades as ideological cleavages have crumbled. With the SPD in opposition for the first time since October 1998, it seems that unions in particular have ended their verbal assaults against the party and returned to a more conventional line of argument in the media. Nevertheless, political priorities seem to be of greater importance than traditional affiliations when it comes to the formation of alliances between interest organizations and parties. Every German government has shown a high degree of interest representation and responsiveness, no matter which coalition had been in charge. That means that major economic interest groups are very well integrated into the policy-making process. This high level of integration ensures that associations are aware of the complexities of policy-making and of the positions of their political adversaries. In general, proposals made by important groups and associations are thus reasonable.

The main interest organizations in Iceland have had and still have considerable influence on public policy, and a long history of involvement with the political parties. The Confederation of Icelandic Employers (Samtök atvinnulífsins) has in modern times been closely, albeit not formally, associated with the right-wing Independence Party. Likewise, the Icelandic Confederation of Labor (AlþýðusambandÍslands, ASI) has a long history of close links to the parties on the left, although its formal ties to the Social Democratic Party were severed in 1942. Until its breakup in the 1990s, the cooperative movement, with its strong ties to the agricultural sector, was closely linked to the Progressive Party (Framsóknarflokkurinn), which has its origins in the farmers’ movement. All major interest organizations in Iceland have long maintained a staff of highly qualified employees, and use research to form policy proposals that are usually well grounded, coherent and in line with organizational goals. After the 2008 economic collapse, both the employers’ organization and the employees’ organizations signed an agreement with the government and the Federation of Municipalities aimed at securing economic stability (Stöðugleikasáttmáli). The agreement deals with the restructuring of the economy by keeping wages and prices down, among other issues. The Chamber of Commerce has been vocal in recent years, dispensing advice to the government on a regular basis. One of their recommendations, a few months before the crash of 2008, was the following: “The Chamber of Commerce recommends that Iceland stop comparing itself with other Nordic countries because we are superior to them in most respects.”

The main Irish interest associations are the trade unions and the employers’ and farmers’ associations. These have clear lobbying roles, and try to influence policy to the benefit of their members. They are also aware of the need to gain credibility in the public’s mind, and of the skepticism with which many of their proposals are received by the media. On the other hand, these associations are now well staffed by economists and other experts who conduct detailed background research and prepare careful – if selective – arguments in support of the policies they advocate. Some use is made of scholarly research, although usually on a selective basis or through specially commissioned studies. All the main associations make detailed submissions prior to the annual budgets. Among these submissions are typically many advocating tax breaks for particular sectors of the economy, or in the case of the drinks, tobacco and car industries, for example, arguments against increased taxation.
Many of these associations have played a constructive role in clarifying technical issues and the repercussions of proposed legislative or budgetary measures. However, they have also exerted considerable and successful pressure on governments in favor of particular policies that have not been in the national interest. In this context, the pressure exerted by the construction industry (broadly defined) has been notable. It played a role in skewing fiscal incentives during the bubble years to favor the construction industry. This accentuated the effects of the availability of cheap and easy credit on this sector. This lobbying played little attention to the broader repercussions of the policies that were advocated.

Employers’ associations, business associations and trade unions are involved through the aforementioned neo-corporatist institutions in policy-making, namely the Economic and Social Council (Conseil économique et social, CES), which regularly publishes studies of great interest, for instance a yearly report on the economic, social and financial evolution of the country. The government commissioned the CES, alongside the Council for Sustainable Development (Conseil supérieur pour un développement durable, CSDD), to study an alternative measure of wealth and well-being independent of GNP (inspired by the Stiglitz Commission on the Measurement of Economic Performance and Social Progress).

In the Netherlands, since the consultation approach to policy-making is of paramount importance, the question of association competence is relevant only to a limited extent. There is no lobbying culture in the Netherlands in the usual sense. These processes have become institutionalized. For instance, there are tripartite negotiations in which employers, employees and the Crown are fixed discussion partners in the early stages of decision-making regarding labor issues. The same takes place for regular negotiations with economic interest associations.

Employers’ organizations and trade unions in Switzerland are pragmatic and avoid ideological undertones. Of course the major interest organizations have their ideologies, but this does not prevent them from entering rational discussions with other organizations and political parties. Furthermore, interest organizations in general have more professional resources, often have a more appropriate view of problems, and despite the defense of their own interests, provide better policy proposals than political parties.

The major business associations propose practical policy solutions, rooted in a realistic assessment of the circumstances they will be carried out in. Since polarization between the major parties has been reduced substantially over the last two decades (especially in the field of socioeconomic policy matters), there is little incentive for business associations to engage in wishful thinking if they want to be taken seriously in the national policy discourse. However, some economic interests do propose relatively more provocative ideas.

The main employers’ union and the main trade union center both have considerable resources and expertise with which to develop coherent policies. Trade unions have considerable competence with regard to labor relations and economic policy more generally, and have the ability to lobby ministries and parliament and to influence government directly through the tripartite consultation structures. Employers also have access to considerable resources, but have a slightly different agenda, favoring a less regulated labor market and lower business taxes. The two found common ground during the economic global crisis, when the economic interest associations became important partners for the government as it sought solutions which would ensure economic prosperity and societal cohesion.

Japan´s leading business and labor organizations regularly prepare topical policy proposals designed to stir public debate and influence government policy-making. Specifically, the business federations Nippon Keidanren and Doyukai, the national organization of the Japanese Chamber of Industry and Commerce, and the leading trade union federation Rengo should be mentioned in this context. Such organizations can make their impact felt not only by publishing policy papers, but also through their membership in government advisory committees. As the financial support of political parties by business has declined, particularly with respect to the demise of the traditional “iron triangle” linking large businesses with the LDP and the bureaucracy, politicians have also become less willing to consider the views of these interest groups seriously. Some competition between the organizations has helped to raise the quality of their proposals. While there is an obvious scramble for influence between Rengo and the business organizations, sometimes leading to explicit statements criticizing each other´s views, there is also growing competition among business organizations themselves. For instance, Nippon Keidanren is dominated by large enterprise groups, and has been somewhat slow in demanding a further opening of the economy. The Doyukai is more characterized by strong independent companies, and is outspoken in demanding a more open business environment.

Mexico has a relatively small number of very large and efficient businesses, which contribute a high proportion of Mexico’s export income and have international linkages of various kinds. Big business has substantial influence, and its policy proposals are entirely rational from its own standpoint. Smaller businesses have their own representative organizations, but tend to lack resources. However, the government has made efforts to integrate them into the policy process. Business-related policy advice is in the process of becoming more sophisticated.

There are few well-organized and well-staffed interest groups in New Zealand. The only large ones are the New Zealand Council of Trade Unions and Business New Zealand. Both generally propose reasonable policies. However, there is an underlying asymmetry. Business New Zealand additionally relies on the work of the New Zealand Business Roundtable, an organization of chief executives of major business firms.

The two most important Spanish trade unions (UGT and CCOO) and the largest employers’ association (CEOE) tend to propose reasonable, relatively moderate and feasible policies, although they obviously have partial and rather ideologically infused viewpoints about the reforms needed to deal with the post-2008 crisis. This was demonstrated during the difficult negotiations with the central government over labor market reforms and the best strategy to reduce the staggering unemployment level.
Unions and business groups have improved their substantive competence in the last years through specialized research, contacts with scholars, and their own training centers and foundations that help them to identify the causes of problems and analyze policy effects while taking long-term interests into account. Nevertheless, they find difficulty in proposing strategic and structural socioeconomic reforms. UGT is associated with the Fundación Francisco Largo Caballero, CCOO with the Fundación 1 de Mayo, while employers, apart from the training centers linked to the CEOE, have recourse to the Círculo de Empresarios and the Círculo de Economía (based in Catalonia) think tanks. The chambers of Commerce and Industry also promote training at all levels within business (for example, through the Business Training Institute IFE).
Other economic private groups include some farmer’s associations (such as COAG and ASAJA), the national federation of fishermen’s associations, some consumers’ associations (CEACCU and UCE) and the Spanish confederation of cooperative business. Most of these are too small and sectoral (or in some cases do not enjoy enough autonomy vis-à-vis the political parties) to have competence on their own to propose reasonable policies. However, they are sometimes able to make high quality and independent diagnoses, appraisals or proposals.

Although they do not always argue for the same economic policies, both the Istanbul-centered Turkish Industrialists’ and Entrepreneurs’ Association (TÜSİAD) and the Anatolian-centered Independent Industrialists’ and Entrepreneurs’ Association (MÜSİAD) pursue reasonable policies. Both associations advocate not only for privatization, development of the market economy and the integration of Turkey into the world economy, but also for liberal reforms, human rights, democratization, reform of the Turkish ethnic-nationalist concept of citizenship, and the establishment of the rule of law. From time to time, these groups issue reports, proposals and positions on certain issues such as education, health, security and constitutional reform, but a few organizations are responsible for the majority of such opinions. It is also questionable to what extent the government considers these reports.
When it comes to social and labor rights, both organizations appear to be more skeptical, but they do not oppose unionism as such. It is of particular interest that TÜSİAD, which had always been close to the secularist state elite and the state ideology, today also takes the cultural rights of the more conservative majority of the population into account. It has managed, for the first time, to establish dialogue and cooperation with MÜSİAD, which is regarded as the mouthpiece of the more religiously conservative entrepreneurs of Anatolia.
Among the labor unions, the ideological split between secularist unions like KESK and DİSK and the more Muslim conservative Hak-İş still tends to prevent common action, leading to a waste of energy that might better be spent in advocacy of the social and economic rights of the working class. Additionally, Turkish unions tend to concentrate on symbolic struggles such as the fight for the right to demonstrate at a particular square in Istanbul on May 1, instead of for social and economic policies holding the potential for direct benefit to their members.

Interest groups advocate policies that promote their members’ or constituencies economic and other interests. Such policies may or may not also have credible claims to benefit broader interests of the public. When they do have such claims, it is a major advantage for a group’s prospects for getting its policies adopted. For example, pharmaceutical companies can oppose almost any effort to reduce the costs of prescription medicines on the plausible grounds that large profits earned by a relatively few highly successful products provide funds to support further medical innovation. Interest groups have a stake, therefore, in identifying the best policies from the standpoint of serving their own interests while also providing benefits, or at least minimizing costs, for the general public. They also have a stake in presenting these policies in the most persuasive manner.

The big interest associations (employers associations and trade unions) have developed research units which regularly use experts and rely upon scholarly knowledge. Their proposals are often detailed and based upon substantive policy know-how. However, it must be noted that trade unions generally have a rather conservative outlook, and are reluctant to adopt innovative policies in the areas of labor relations or pensions. Employers associations in general adopt a more innovative perspective, and are less defensive of the status quo. Their policies are more prudent on issues associated with increasing competitiveness or reducing government subsidies. In recent years, two of the largest trade unions (CISL and UIL) have shown a somewhat greater willingness to negotiate with the government and employers associations over measures designed to increase the flexibility of labor relations.
Employers association Confindustria is well known for its studies, and functions as a efficient pressure group in Italian politics. But as mentioned above, the Italian landscape of economic interest associations seems to be a closed shop, where the idea of protectionism rather than competition prevails on both the employers’ and employees’ side.

Poland has a relatively developed sector of interest associations. Business associations and trade unions have become more professional over time, and the Tusk government has taken them more seriously than its predecessor. The trade unions have largely taken an obstructive approach towards government reforms, most notably in the case of early retirement and health care. In contrast, some business associations, such as Lewiatan (PKPP) or the Business Center Club (BCC), Club) have the expertise and the resources research and formulate elaborate reform proposals.

The policy competence of trade unions and business associations differs. Trade unions’ ability to produce solid analytical output has been limited. Unions have suffered from weak leadership and have largely relied on their contacts to the governing Smer-SD party. Business associations are in a better position to provide full-blown policy proposals, in part because they have more resources, and some of them even run or support think tanks or rely on independent experts. However, some business associations pursue narrow-minded interests. The best example of this might be the construction companies (i.e., the “concrete lobby”), which were extremely successful in lobbying for a costly expansion of highways.

The business associations (the Korean Employers Federation (KEF) and the Federation of Korean Industries (FKI)) and labor-union umbrella groups (the Federation of Korean Trade Unions (FKTU) and the Korean Confederation of Trade Unions (KCTU)) have some expertise in developing policy proposals. They are supported by think tanks that provide scholarly advice. However, all these groups are relatively weak compared to the influence of individual businesses and company-level trade unions. Some individual businesses, such as Samsung, LG and Hyundai, have their own think tanks that produce high-quality research and are able to analyze and provide alternatives to government policies.

Most interest associations are very narrow-minded and lack solid expert support. Trade unions in particular have not made many innovative proposals for crisis management. Business associations have been more active. The Reform Alliance (Reformszövetség), an expert group sponsored by National Alliance of Entrepreneurs (Vállalkozók Országos Szövetsége, VOSZ), provided the blueprint for the fiscal reform package of the Bajnai government.

There are a number of associations that make policy proposals, notably trade unions and employers’ associations. These groups’ proposals are generally reactive to government measures, rather than being innovative in themselves. The influence of the CIP employers’ association was evident with regard to the location of the future Lisbon airport; indeed, its study of alternative sites helped generate momentum that ultimately forced the government to change the airport’s planned location (see Alternative Options). The study carried the argument based on technical and economic arguments by the specialists who did the study. However, these groups’ influence is generally low.

Proposals by economic interest groups are not necessarily and not always short-sighted or unsustainable, but tend to be partial and largely guided by their narrow interests. Exceptions to this rule of thumb do occur.

Associations do not play a major part in the formulation of policy proposals in France. In general, they have limited organizational, analytical or expertise power, which would allow them to influence the debate in this respect. Only in some cases are more specialized associations in the social or environmental field (or the agricultural associations) able to mobilize their specific experience in the form of policy proposals that may be adopted or taken into consideration by parliament and government. But, in general, the French political culture and tradition means that governments tend to have “arms-length” relationships toward associations, seen as “lobbies” proclaiming egoistic interest, opposed to government and parliament which are legitimized to express the “general will.” This has led to a rather fragmented, weakly organized, sometimes split (e.g., the trade unions) association system, which remains confined to a secondary role in the process of policy formulation dominated by executive power and very often “statist” expertise. In consequence, associations may prefer public protest, polarization and lobbying instead of using specialized expertise.

Major interest associations such as the General Confederation of Workers of Greece (GSEE) and the Association of Greek Industrialists (SEV) formulate policy proposals on major issues such as income policy, taxation and pensions. These associations rely on think tanks they have founded with the purpose of obtaining technical and policy advice. For example, the Foundation of Economic and Industrial Research (IOVE) is loosely related to SEV, while the Institute of Labor (INE) is closely associated with GSEE and the Confederation of Civil Servants’ Unions (ADEDY). The think tanks are staffed by part-time academics who have full-time appointments in Greek universities, as well as by younger researchers.
Interest associations prepare policy proposals based on reports prepared by these think tanks. However, interest associations and their think tanks do not have the administrative and scientific capacity to comment on all major policy initiatives taken by the government. They periodically produce concrete proposals (e.g., SEV’s reports on Greece’s national action plans for employment and social inclusion, 2003 – 2005) which are not regularly updated. Interest associations often put forward vague statements of opinions, such as values or guidelines meant to inform policies, rather than concrete policy proposals. Even when interest associations agree on the significance and basic parameters of a policy problem (e.g., pension reform), they often arrive at diametrically opposed, less-than-reasonable solutions, which reflect the history of polarized party and interest competition, the prevailing distrust toward political institutions, and the absence of established channels of consultation among social partners.
At times, policy proposals are not technically feasible, but express an unrealistic, polemical attitude on distributional issues. An example is GSEE’s periodic demand that the state budget provide additional funding to the pension system, even at a time of fiscal crisis (2008 – 2010), and during a period in which the state’s capacity to raise tax revenue actually fell (2007 – 2009).