Direct and Indirect Effects of Corporatism on Economic Growth

Emma Galli and Fabio Padovano

Rivista di Politica Economica, 2001, vol. 91, issue 5, 5-32

Abstract: We investigate whether corporatist governance negatively affects growth: a) directly through higher transaction costs involved in the policy decision making process; b) indirectly, yielding growth retarding policy decisions. We construct a more accurate data set for 18 OECD countries in the 1960-1993 interval and improve the specification and estimation of the model. We find that corporatist governance and left wing governments do not directly reduce growth, but there are a robust correlations between growth, union pervasiveness and other policy regressors. On average, corporatist (decentralized) countries adopt growth retarding (enhancing) policies, consistently with the hypothesis that corporatism exerts an indirect negative effect on growth.

JEL-codes: J51 P41 (search for similar items in EconPapers)
Date: 2001
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