09.01 The Associative Order in the Netherlands: An Historical Analysis of its Development, Functioning and Well-being Effects

Aim of the project

This project has two aims. First, using a long-term historical approach, the project investigates the development and possible transitions of the associative order, sometimes also called corporatism, in the Netherlands. This coordination system, which operates based on cooperation between organized groups and associational organizations, has been very important throughout various periods in Dutch history. The project wants to assess the changes in this order, more specifically the shifts between inclusive, broad cooperation on the one hand to oligarchy on the other. Second, it aims to test the effects of such changes on the well-being of Dutch society. More specifically, it will be investigated how the associative order affected well-being during the three large (economic) crises that the Netherlands underwent during the twentieth century.

Theoretical Background

Economies can be coordinated in very different ways. Main coordination systems used to this end are the market, the state, and the associative order (Rajan, 2019; Streeck & Schmitter, 1985). They appear in different mixes and are employed in different compositions, with sometimes the state being the main coordination system (a state-led economy), sometimes the market (as in many present-day market economies), and sometimes, but less frequently so, the associative order being dominant in the coordination of the economy and the allocation of inputs. The associative order economies do not only have a variety of voluntary associations (unions, cooperatives, corporations, mutuals), as these may also be found in state-led or market-led economies, but have these as the most important economic actors, which controlled a major share of land and capital and employed a major share of labour. Rather than working on the basis of competition (as in the market) or hierarchical control (as in the state), the associative order operated on the basis of inter- and intra-organizational concertation, i.e. deliberation, consultation, cooperation and consensus (Streeck and Schmitter, 1985). This associative system, which is under-studied both in its functioning and its effects, forms the focus of this project.

The associative order was highly prominent, or perhaps even dominant, in the Netherlands, Germany, Switzerland and Austria in the decades after the Second World War. Among the cases of associative order, the Netherlands is a particularly interesting case as scarce evidence from qualitative historical case studies indicates substantial changes in the coordination of the Dutch economy over time. While the institutional literature often emphasizes persistence in coordination types over time (Hall and Thelen 2009), historical studies of the Dutch case hint to the dynamic nature of these coordination types (Sluyterman 2015). This offers possibilities for in-depth analyses of both the development of coordination systems and the impact of these changes over the long term. However, due to the lack of systematic time series data, sound analyses of whether and how the Dutch economy changed in coordination orders over time (i.e., shift between coordination types versus within associative order) and the societal impact of this change are largely missing.

While the variety in the coordination of economies and their consequences for economic outcomes have been subject to international scholarly debate (see Wood and Allen (2020) for a review on comparative capitalism literature), less attention has been paid to the internal dynamics and variations within each economic order. This is because empirical studies often rely on cross-country evidence comparing different economic orders, thereby overlooking the change and functioning within the economic orders. In addition, a consensus is yet to emerge on whether and how the associative order contributes to societal well-being (see Unger and van Waarden (1999) for discussion). To bridge these gaps, this project investigates the associative order in the Netherlands over the long run. In doing so, it pays particular attention to the internal cooperative dynamics and diversity of the associative order at the meso-level of society, and how these dynamics affect the macro-level of society as a whole.

Research Design

This project: (1) Reconstructs the importance and the development of the Dutch associative order over the period 1870-2020. (2) Investigates when and how transitions take place in the internal functioning of the associate order. (3) Tries to identify whether and under which conditions the associative order contributes to societal well-being outcomes. Our analysis will be a diachronic comparative history of the Dutch economy. Our long-time frame allows to test hypotheses both on the shifts between economic orders as well as within the associative order and the consequences of these changes for larger societal outcomes.

The project will, first, create a new database on different Dutch associations as well as the institutional characteristics of the associative order (e.g., at which level wage bargaining takes place, employment regulations, stakeholder vs. shareholder system, training system) using primary and secondary sources (e.g., van Waarden (1985) on Dutch business interest associations and Visser (2013) on labor unions). The dataset will then be used to analyze whether changes in the institutional indicators of the associative order resulted in a shift from the associative order to another economic order (e.g., market economy), or whether it influenced mainly the internal dynamics of the associative order. At the macro-level of analysis, we will use qualitative historical sources such as annual reports, newspapers, and minutes to investigate the bargaining process of different stakeholders, including organizations such as businesses and unions.

The second step will be to test whether the changes identified in the economic order resulted in more positive or negative societal well-being outcomes in the Dutch society since 1870, using regression analyses. To this end, the project will employ the new, broader index of societal well-being, which transcends economic measures and  encompasses also other domains like health or inequality (Philips et al., 2021). To distinguish the effect of change in economic order from other relevant drivers of well-being identified in the literature, we will control for indicators such as economic growth, technological advancement, and sectoral change in the regression analysis.

Literature

Hall, Peter A., and Kathleen Thelen. (2009). “Institutional Change in Varieties of Capitalism.” Socio-Economic Review 7: 7–34.

Philips, Robin, Bas van Bavel, Auke Rijpma & Jan Luiten van Zanden. (2021). “Reconstructie over twee eeuwen toont: brede welvaartsgroei blijft sinds 1950 achter bij de economische groei.’” ESB.

Rajan, Raghuram. (2019). The Third Pillar: How Markets and the State Leave the Community Behind. New York: Penguin Press.

Streeck, Wolfgang, and Philippe C. Schmitter. (1985). “Community, market, state – and associations? The prospective contribution of interest governance to social order”. European Sociological Review 1, 119-138.

Unger, Brigitte, and Frans van Waarden. (1999). “Interest associations and economic growth: a critique of Mancur Olson’s rise and decline of nations’, Review of International Political Economy 6, 425-467.

van Waarden, Frans (1985). ‘Regulering en belangenorganisaties van ondernemers’, in F. L. van Holthoon (ed.) De Nederlandse samenleving sinds 1815, Assen and Maastricht: Van Gorcum, pp. 227–60.

Visser, Jelle. (2013). “Data Base on Institutional Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts, 1960-2011 (ICTWSS).” https://ideas.repec.org/p/euf/ecopap/0488.html.

Wood, Geoffrey T, and Matthew MC Allen. (2020) “Comparing Capitalisms: Debates, Controversies and Future Directions.” Sociology 54 (3): 482–500.

 PhD

Chris Vlam 

Project initiators

prof. dr. Bas van Bavel (History)

dr. Selin Dilli (History)

prof. dr. Rafael Wittek (Sociology)

Location

Utrecht

Expertise

Economic & Social History, Sociology