Why Did Austrian Business Oppose Welfare Cuts? How the Organization of Interests Shapes Business Attitudes Toward Social Partnership
Comparative Political Studies, Vol. 47, no.7 (June 2014)
Posted: 3 Jul 2013 Last revised: 14 May 2014
Date Written: June 25, 2013
In recent decades, business interests became protagonists of welfare retrenchment in many countries. In contrast, Austria’s national business organization, the WKÖ (Wirtschaftskammer Österreich), defended welfare programs and social partnership against government initiatives to dismantle them. Drawing on interviews and media reports, this article analyzes the reasons for this deviation, focusing on reforms in two fields: (a) public pensions and (b) social insurance administration. The article suggests that the institutional setup of interest representation in Austria explains this stance better than alternative explanations that focus on competitive advantages. The article identifies compulsory membership, equal voting rights, and encompassing organization as the relevant features of the institutional setup. These features shaped the WKÖ’s social policy attitudes in two ways: first, by ensuring a strong role for small firms, and second, by reducing the vulnerability of the organization to discontented minorities. The findings point to the importance of organizational structures in shaping associational policy preferences.
Keywords: business interest associations, employers, social policy, pensions, corporatism, social partnership, institutional change
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