Social Coalitions and Policy Regimes: Between Equilibrium and Crisis

Friday, 3 July 2015: 4:00 PM-5:30 PM
TW1.3.04 (Tower One)
Hideko Magara, Waseda University, Tokyo, Japan
Faced with a world-wide political economic impasse and an ever-increasing wealth inequality, social scientists often recur to the classics for guidance, only to realize, painfully, that the world has changed drastically and—no matter how relevant they were in the 20th century—the past prescriptions, including Keynesian policies, cannot be applied exactly to the present disorder.

The world has changed indeed. While the interests of working people are diverging even at the domestic level, the interests of a small number of economic elites are converging globally. Collective actions among workers are becoming increasingly difficult to implement in the domestic arena, but it is easier than ever for economic elites to achieve collective actions in both the domestic and the global dimension. Why is the numerically far-large popular class unable to outdo an ultra-minority comprising global financiers and multinational entrepreneurs? This is one of the biggest puzzles facing political scientists. Simple electoral analyses do not provide satisfactory answers. Because the multi-layered interest structures in advanced countries have become heavily nested, no analysis can solve the puzzle without examining various aspects of the domestic and global political economies simultaneously.

My paper focuses on the role of social coalitions that sustain political economic paradigms. Social coalitions maintain the political economic equilibrium. They support economic growth, but incur crises when they become weak.

I argue that the present political economic crisis faced by most developed countries could be regarded as an anomaly. In a normal situation, choices by political parties reflect the basic structure of political demands. They also express how these demands are integrated into party politics and implemented by the governing coalition. Therefore, the key element to be considered is precisely which political strategies will lead to a change in the economic model. According to Amable (2003), the institutional structure of an economy depends on whether a stable dominant social bloc comprising a coalition of various social political groups is formed. These groups can strategically compromise their mutually different interests to maintain a de facto coalition.

Under democracy, institutions must be supported by an influential political bloc that represents the shared interests of multiple social groups. Such coalitions are formed based on the existing institutional structure. Because politicians want to secure support from the dominant social bloc to remain in power, they attempt to actualize institutional changes favourable to the bloc and prevent adverse changes. Nevertheless, a policy regime change can occur through autonomous behaviour by the actors in an anomalous situation, or when the equilibrium breaks down. The costs and benefits of policy change affect various individuals differently, as a change in policy may threaten the interests of some groups within the dominant bloc. The fulfilment of demands for change depends on the balance of power between various social-political groups; groups that have a greater degree of political weight can promote a specific policy change more effectively. A new equilibrium is possible through the reshuffling of social-political coalitions. The resulting new dominant bloc has priorities that differ from those held by the former dominant bloc. Therefore, a new compromise will be based on a different set of issues from those undergirded by the old compromise (Amable 2003).

Political demands are not an automatic reflection of the voters’ objective economic interests. In fact, they depend on the demands perceived as legitimate by social political groups. Such perceptions and expressions of political demands are formed by the dominant ideology, or hegemony, which also affects how voters perceive their interests, how they form social groups and how they express their demands. Ideology defines voters’ social identity, makes them aware that they belong to certain kinds of groups and thereby urges them to become integrated into organizations. This process depends on the economy’s institutional structure.

In this context, it is important to observe how voters react to changes in the dominant ideology. I assume that a policy regime shift does not simply occur because the combination of members within the dominant coalition changes. Rather, it occurs when the distribution of voters as a whole moves in a new direction. In other words, the center of gravity among the entire body of voters moves. Thus, a hegemonic change that leads to a policy regime change involves a change in position among socio-economic groups in response to structural and contextual changes. As an example of this process, reflecting the more globalized world that emerged in the 1980s, the political axis turned to the upper right (Kitschelt 1993). Under neoliberal policy regime, voters in economically advantaged sectors moved to the upper right, leaving behind the popular class of voters, who have become more susceptible to xenophobic mobilization by the new right. Thus, the stability of the policy regime derives from a peculiar combination of support by a small number of voters in the most competitive international sector and by a large number of voters in the isolated popular sector.

In retrospect, one can see that the identity of the key actor in each historic paradigm has been changing. During the transition from authoritarianism to democracy, the bourgeoisie played the most important role (Moore 1967). After World War II, farmers played a crucial role in the formation of political coalitions that enabled economic growth in each country: farmers’ support to the industry resulted in a conservative growth model (Japan), whereas if they chose an alliance with the workers, economic growth was based on the social democratic model (Sweden).

Presently, the legitimacy of neoliberal policy regime is seriously questioned. Its economic performance has been incomparably abysmal. While some political elites attempt to move to a new policy regime, others prefer maintaining the status quo. In whose hand does the key to a new period of economic growth now rest?