The Political Consequences of Labor Law Regimes: the Contractualist and Corporatist Models Compared

Tamara Lothian

Columbia University - Center for Law and Economic Studies


Cardozo Law Review, Vol. 7, No. 1001, 1985-1986
Columbia Law and Economics Working Paper No. 392

This piece develops, in the form of a discussion of alternative labor-law regimes, a thesis about the importance of enlarging the existing repertory of institutional arrangements for the organization of different areas of social life. Law and legal analysis form the terrain on which such innovation should take place: they alone deal with institutional alternatives at the requisite level of detail.
Two major labor-law regimes have been established since the decade of the 1930s. One is the contractualist type, exemplified by American labor law: workers choose to unionize or not, and the union structure is wholly independent of government. The other is the corporatist type, exemplified by the labor laws of the major Latin Americans countries that established their basic labor-law regimes (sometimes under fascist influence) before the Second World War: all workers are automatically unionized, and the unions fall under institutionalized governmental tutelage.

It is widely but mistakenly believed that the contractualist type of labor-law regime is the only one suited to the conditions of a contemporary democratic market economy.

This piece compares the legal logic and the practical consequences of each of these regimes. It argues that it is neither necessary nor desirable to choose between them. Across a wide range of present-day circumstances, the preferable regime would be one that combines the contractualist principle of union independence from government with the corporatist principle of automatic and universal unionization. Such a regime, suggested in varying degree in many different contemporary political economies, would help shift the focus of labor militancy from the effort to unionize to the use of union power, and favor a focus on institutional issues, not merely economic advantage.

The broader theoretical and programmatic point lies in the recognition of the transformative effect that the creation of new institutional types may have on our sense of political possibility. Comparative law contributes to the broadening of democratic debate by increasing our awareness of existing and possible forms of social organization in different areas of social life.

Number of Pages in PDF File: 75

Keywords: Institutions, Institutional Change, Market-oriented Reform, Labor Law, Comparative Law, Law and Development, Law and Economics, Varieties of Capitalism, Contract Law, Collective Bargaining, Democracy, Welfare State

JEL Classification: B41, D02, J00, J01, J08, K0, K23, K31, N30, N32, N33, N24, N26, O10, 025, 038, P50, P51, P52

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Date posted: January 19, 2011  

Suggested Citation

Lothian, Tamara, The Political Consequences of Labor Law Regimes: the Contractualist and Corporatist Models Compared (1985-1986). Cardozo Law Review, Vol. 7, No. 1001, 1985-1986; Columbia Law and Economics Working Paper No. 392. Available at SSRN: http://ssrn.com/abstract=1743134 or http://dx.doi.org/10.2139/ssrn.1743134

Contact Information

Tamara Lothian (Contact Author)
Columbia University - Center for Law and Economic Studies ( email )
435 W. 116th Street Box A-22A
New York, NY 10027
United States
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