By Geoffrey Garrett
This e-book discusses the way forward for the countryside in a global of worldwide markets. not like such a lot reports announcing that worldwide markets dominate nationwide politics, this ebook argues that international locations nonetheless own significant autonomy over coverage offerings. in addition, voters' calls for for presidency defense from marketplace forces (economic lack of confidence) are emerging, whereas international locations with powerful exchange union routine that may restrain the salary calls for of staff (corporatism) are beautiful to traders. consequently, there's nonetheless a potential leftist substitute to the loose industry within the worldwide financial system.
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Additional info for Partisan Politics in the Global Economy
Example text
POLITICS, POLICY, AND PERFORMANCE T his chapter establishes the theoretical foundations of my argument about the effects of domestic political and organizational conditions on economic policy and macroeconomic performance in the global economy. The first three sections of the chapter develop a closed economy understanding of the political economy of capitalist democracy that can be used as a baseline against which to compare the case where countries are deeply integrated into global markets. 1 argues that governments of the left and right can be expected to pursue partisan economic policies consistently - based, respectively, on the reform or acceptance of market allocations of wealth and social risk - only when these are consistent with strong macroeconomic outcomes.
In a series of papers with Michael Alvarez and Peter Lange, I have developed an approach that synthesizes these two propositions by arguing that the strategic behaviors of governments and actors in the labor market are mutually contingent (Alvarez, Garrett and Lange 1991; Garrett and Lange 1986; Lange and Garrett 1985). Because labor market institutions affect the macroeconomy, one should expect that governments will take into account labor market reactions to different types of economic policies.
This is not the case where labor is essentially unorganized. The deck is clearly stacked against the Keynesian welfare state where labor market institutions are very weak. Even governments dominated by left-wing parties can be expected over time to move toward more P O L I T I C S , POLICY, AND PERFORMANCE 37 free market-oriented policies, in an effort to improve macroeconomic outcomes. Whether this strategy will ultimately prove electorally successful is not certain, however, since a heavy price must be paid for a buoyant macroeconomy - the abandonment of partisan redistribution.
