Is Corporatism Feasible?

21 Pages Posted: 30 Jan 2006

See all articles by Giovanni Di Bartolomeo

Giovanni Di Bartolomeo

Sapienza University of Rome, Department of Economics and Law

Nicola Acocella

University of Rome I - Department of Methods and Models for Economics, Territory and Finance (MEMOTEF)

Multiple version iconThere are 2 versions of this paper

Date Written: February 2005

Abstract

This paper investigates the effects of cooperation (corporatism) on macroeconomic performance by considering a rather standard policy game between the government and a monopoly union. We stress the shortcomings of the traditional way used to model cooperation in policy games (the maximization of the weighted sum of players' preferences), which only approximates the Nash product solution. We find that it is difficult to implement corporatism, although it generally increases social welfare, since it often reduces the union's utility. In particular, we show that an inflation-neutral union will never find it profitable to cooperate with the government, unless side-payments are considered. The study of this issue is however beyond the scope of this paper.

Keywords: Employment, inflation, trade unions, government, corporatism, policy game, feasibility

JEL Classification: E24, E61, E31, E58, J51

Suggested Citation

Di Bartolomeo, Giovanni and Acocella, Nicola, Is Corporatism Feasible? (February 2005). Available at SSRN: https://ssrn.com/abstract=879293 or http://dx.doi.org/10.2139/ssrn.879293

Giovanni Di Bartolomeo (Contact Author)

Sapienza University of Rome, Department of Economics and Law ( email )

via Castro del Laurenziano 9
Roma, 00191
Italy

Nicola Acocella

University of Rome I - Department of Methods and Models for Economics, Territory and Finance (MEMOTEF) ( email )

Via del Castro Laurenziano 9
Roma, Roma 00161
Italy
+390649766359 (Phone)

HOME PAGE: http://www.memotef.uniroma1.it/newdip/utenti/acocellanicola/

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