INTRODUCTION

The rise of new parties on the right in the 1980s led to a great deal of controversy over how these parties are defined. Some authors argue that these parties share essential characteristics, while others point to the unique national features and circumstances of each party. Some see them as throwbacks to the fascist era, while others see them as mixing right-wing, liberal, and populist platforms to broaden their electoral appeal. The party ideologues themselves have argued that they cannot be placed on the left-to-right spectrum. In this chapter, I analyze the nature of radical right (RR) parties in France, Germany, and Austria. I argue that they can be considered in the same category due to their nationalism and positions on issues such as immigration and the European Union. These parties are aware of each other, so it is probable that they would emulate a similar party's success by evolving similar issue positions.

All of these parties also have experienced internal factionalism, which has threatened their success. As with many other types of parties, there are those within the party who would prefer to follow a more pragmatic path that might lead to greater electoral success, while other members are unwilling to change hard-line positions or pursue coalitions with other parties that might weaken ideological purity. In each case, conflicts between pragmatists and ideologues have led to major splits within the parties.

THE PUZZLE REVISITED

Given that all four countries face similar socioeconomic conditions, why is the radical right more successful at winning votes in Denmark, France, and Austria than in Germany? Why does the radical right gain more seats in Denmark and Austria than in France? This book has focused on the puzzle that is presented by the difference in the level of success of radical right parties. The results of this analysis imply that electoral rules and party systems play a crucial role in the development of new parties. Electoral results can be difficult to understand unless these rules and the strategies that parties pursue are included in the analysis. In general, the comparative study of political parties can benefit from an understanding of the strategies that voters and parties use to gain particular outcomes. Changes in the rules of the game can have a dramatic impact on party development and electoral success. To conclude the analysis, I summarize the findings of the previous chapters, discuss the implications of those findings, and identify areas for future research.

This analysis has emphasized the importance of electoral institutions, factionalism, and party strategy in explaining the difference in levels of success of radical right parties in Western Europe. In Chapter 1, I presented my main argument: that radical right parties will have difficulty attracting voters and winning seats in electoral systems that encourage strategic voting and/or strategic coordination by the mainstream parties.

INTRODUCTION

Many attempts have been made to explain the success of radical right parties by looking at the relationship of the radical right vote with unemployment and immigration. In the previous chapter, a relationship was found between socioeconomic variables and the radical right vote in France and Austria, but this relationship does not provide a causal mechanism to explain the difference in the level of success of radical right parties. Having similar levels of immigrants and unemployment does not lead to the same relationship in Germany. In this chapter, I move beyond previous explanations for the success of radical right parties by focusing on the role of electoral systems and coalition strategies.

The electoral system in a country plays an important role in determining the ability of a small party to gain votes. Electoral systems often are designed to make it difficult for small parties to compete. This is usually done by the imposition of barriers such as electoral thresholds or requiring a certain number of signatures to be eligible for an election. Another way in which small parties are discouraged is coordination by the mainstream parties that leads to strategic voting. Strategic voting occurs when voters choose to vote for a party other than their preferred party because they are afraid of wasting their vote, or they are afraid that their least-favored party will win if they vote for their preferred party.

In Chapter 3, peoples' preferences for social protection were explained as a function of the level and composition of human capital assets (i.e., as a function of income and skill specificity). Any theory that seeks to understand collective choice in democratic societies must begin with an account of individual preferences. But we know from the seminal works of Arrow, Olson, North, Shepsle, and Weingast that the aggregation of preferences into public policy is anything but straightforward. Indeed, preferences may never get translated into policies, even when a single (median) voter is decisive in electoral competition.

One fundamental problem in the provision of social protection arises because current pivotal voters choose policies that yield benefits to them only at some future point in time when these same voters are no longer pivotal. This poses a problem because current voters can only commit the government for one term at a time and because there is no way to bind future voters to the policy preferences of current voters (for a similar logic, see Franzese 2002, Ch. 2). This dilemma is referred to in this chapter as the time-inconsistency problem in social policy provision, and it is shown that it can lead to serious underprovision of social protection compared to the long-term preferences of voters. This is particularly true in specific skill systems because the underlying demand for protection is higher.

As noted in Chapter 1, human capital rivals physical capital as a source of personal and national wealth, and it is the single most important determinant of personal income in advanced industrialized countries. Viewing human capital as an investment or asset, this chapter asks how the character of that investment affects workers' preferences for social protection. The fundamental idea is that investment in skills that are specific to a particular firm, industry, or occupation exposes their owners to risks for which they will seek nonmarket protection, whereas skills that are portable, by contrast, do not require extensive nonmarket protection.

The asset theory of preferences does not necessarily contradict a long tradition in the study of the welfare state that emphasizes redistribution as a key political motive behind the welfare state (e.g., Korpi 1983; Esping-Andersen 1990). Indeed, Meltzer and Richard's (1981) influential median voter result for government spending, which focuses on the redistributive aspect of social protection, emerges as a special case in the model. Given a particular composition of skills, workers with higher incomes are likely to demand less social protection than workers with lower incomes. The asset model parts ways with the Meltzer-Richard model, however, because it explicitly recognizes that social protection also has an insurance aspect (Sinn 1995; Moene and Wallerstein 2001) and that demand for insurance varies between workers according to their degree of exposure to labor market risks (Baldwin 1990).

This chapter applies the welfare production regime argument to the case of service employment and tests its economic and political implications. Because job growth in high-skilled, better-paid services is limited by the size of the domestic market, whereas growth in low-skilled, low-paid service jobs is hampered by wage compression and high social costs, the transition toward a more sheltered postindustrial economy has produced a difficult tradeoff between equality and employment, mediated only by the willingness of the government to increase public employment or subsidize private employment at a cost to tax payers.

As Anne Wren and I have argued (Iversen and Wren 1998), governments initially responded to this “trilemma” in a manner that clearly reflected partisan preferences and broader institutional conditions. Thus, right governments in liberal market economies sought to further deregulate labor markets, whereas governments in coordinated market economies embarked on policies to either ration work (primarily in countries with independent central banks and strong Christian democratic parties) or to increase spending on public employment (primarily in countries with highly centralized wage bargaining and strong social democratic parties). The division between varieties of capitalism described in Part I has thus been overlaid by new divisions that are the result of different political responses to deindustrialization.

One of the most remarkable facts about welfare spending in advanced democracies is its rapid and almost uninterrupted expansion since the 1950s. Figure 5.1 illustrates this expansion for two broad categories of spending: government consumption of services and government transfers, both expressed as shares of GDP. Although the very rapid expansion beginning in the mid-1960s slowed down in the 1980s, and the fiscal retrenchment associated with the reining in of public deficits in the late 1980s seems to have caused a temporary reduction in public consumption, there are no signs of any broad-scale retrenchment. This continued growth of the welfare state presents an intriguing puzzle for political economy since the traditional blue-collar working class, the supposed pillar of the welfare state, has everywhere declined during the past four decades (cf. Piven 1991).

One of the solutions to this puzzle proposed in the literature is that growing exposure to the international economy has increased labor market insecurities and propelled demands for social protection. Thus, Cameron (1978) and Katzenstein (1985), and more recently Garrett (1998) and Rodrik (1998), argue that even though integration into the international economy promises large potential welfare gains, such integration comes at the cost of exposure to the ups and downs of global markets and reduced capacity for governments to counteract these cycles. The way governments solve this dilemma, so the argument goes, is to accept high trade exposure while simultaneously adopting comprehensive social programs to compensate people for increased levels of risk (see also Ruggie 1983).

The introductory chapter outlined a broad theoretical approach to the study of social protection and hypothesized close linkages between social protection, skills, firm strategies, and the political-institutional foundations of the welfare state. This chapter ties national and international developments to the emergence of a few national institutional equilibria or ideal types. Although the chapter will discuss causal mechanisms, the main purpose is to put some empirical meat on the conceptual bones presented in Chapter 1. I will provide the reader with a range of background information, and I will show some striking interconnections between skill systems, social protection, and political institutions that cry out for explanation. Building on a joint paper with Barry Eichengreen, I argue that these interconnections metamorphosed into very distinct regime clusters in response to the challenges of postwar reconstruction and international economic integration, and each cluster is associated with distinct economic advantages that are reinforced through the international division of labor. Relative advantages have been shifting over time, however, and I discuss these forces of change with a view to developing the themes that are explored in greater depth, and with a sharper analytical knife, in subsequent chapters.

Much of the political-institutional divergence that occurred during the postwar period, I argue, reflects the structural-institutional potential for postwar growth in particular countries, the strength of organized labor and capital, and the inherited capacity for centralized collective action.