Many societies use labor market coordination to maximize economic growth and equality, yet employers' willing cooperation with government and labor is something of a mystery. The Political Construction of Business Interests recounts employers' struggles to define their collective social identities at turning points in capitalist development. Employers are most likely to support social investments in countries with strong peak business associations, that help members form collective preferences and realize policy goals in labor market negotiations. Politicians, with incentives shaped by governmental structures, took the initiative in association-building and those that created the strongest associations were motivated to evade labor radicalism and to preempt parliamentary democratization. Sweeping in its historical and cross-national reach, the book builds on original archival data, interviews and cross-national quantitative analyses. The research has important implications for the construction of business as a social class and powerful ramifications for equality, welfare state restructuring and social solidarity.

This article investigates the politics of change in coordinated market econo\mies, and explores why some countries (well known for their highly cooperative arrangements) manage to sustain coordination when adjusting to economic transformation, while others fail. The authors argue that the broad category of “coordinated market economies” subsumes different types of cooperative engagement: macrocorporatut forms of coordination are characterized by national-level institutions for fostering cooperation and feature a strong role for the state, while forms of coordination associated with enterprise cooperation more typically occur at the level of sector or regional institutions and are often privately controlled. Although these diverse forms of coordination once appeared quite similar and functioned as structural equivalents, they now have radically different capacities for self-adjustment.The role of the state is at the heart of the divergence among European coordinated countries. A large public sector affects the political dynamics behind collective outcomes, through its impact both on the state's construction of its own policy interests and on private actors' goals. Although a large public sector has typically been written off as an inevitable drag on the economy, it can provide state actors with a crucial political tool for shoring up coordination in a postindustrial economy. The authors use the cases of Denmark and Germany to illustrate how uncontroversially coordinated market economies have evolved along two sharply divergent paths in the past two decades and to reflect on broader questions of stability and change in coordinated market economies. The two countries diverge most acutely with respect to the balance of power between state and society; indeed, the Danish state—far from being a constraint on adjustment (a central truism in neoliberal thought)—plays the role of facilitator in economic adjustment, policy change, and continued coordination.

I shall explore the process by which firms develop their political preferences, using the case of national health reform. Although rising health costs have heavily burdened many companies, I argue that economic interests alone are unable to account for the variation in firm response to the national reform effort. Rather, institutional factors, shown elsewhere to shape government decision making, also influence corporate preferences. These are (1) the institutionalization of private policy expertise within the firm, (2) firm participation in policy groups, and (3) policy legacies. These findings challenge conventional views of business political mobilization that suggest largely autonomous agents acting on the basis of easily recognized self-interests. Preference formation and corporate mobilization transpire in collective settings as a new stratum of corporate policy managers search for solutions to social problems. The primacy of economic concerns is very real. But institutional analysis explains how these economic concerns are interpreted and acted upon.

D oes the organization of business matter for social policy development in the advanced capitalist democracies? Conventional welfare state analysis has given this significant question scant attention. We argue, however, that the representational power of business, coordination across business interest units, and integration of associations in corporatist policy-making forums, or what we call the social corporatist organization of business, should result in greater support and participation by employers in social policy formation and implementation. We test our arguments with models both of 1980-98 pooled time-series data on within-and across-country variation in spending on active labor market programs and of extensive firm-level survey data from Denmark and the United Kingdom. We find that the centralization and coordination of employers as well as the integration of employer organizations in corporatist policy-making forums are strongly associated with shares of national income devoted to active labor market policy. We find, moreover, that the degree of employer organization conditions active labor market policy responses to "de-industrialization" and increases in general unemployment. At the firm level, membership in an employer association has a significant positive effect on employer participation in active labor market programs in corporatist Denmark but not in the pluralist United Kingdom.

Denmark and Britain have adopted quite similar “active” social reforms in which employers play a major role in the programmatic delivery of services; however, the implementation of the programs has differed dramatically in the two countries. Danish firms, despite having had virtually no prior involvement in administering social programs, have participated in far greater numbers than British employers, who, by contrast, have long provided private, employment-based social benefits.Drawing from interviews with 107 randomly selected British and Danish corporations, this article seeks to explain why Danish employers have participated at higher rates than their British counterparts. Subtle programmatic differences that reflect each country's welfare regime have had profound feedback effects on firms' willingness to participate in the programs; these findings have implications for regimes' capacities both to correct for traps and to revise social protections to meet the needs of the new economy.