Unlike the crises of the early twenties, and the seventies and eighties, the Great Depression caused the center of gravity of the political system to shift in a social democratic direction. Liberal, conservative, and Christian democratic parties alike came to accept, and often spearhead, the need for economic policy interventionism and the political correction of market outcomes. Initially, it seemed that Western European economies would travel sharply divergent trajectories. While Scandinavian social democrats came to establish political and ideological dominance, the Nazi dictatorship destroyed organized labor in Germany. In Britain and the Netherlands, the liberal regime seemed to have survived with only minor alterations. Yet, despite the vastly different political fate of social democratic parties in the thirties, the new policy regimes all shared a basic rejection of the “liberal” political economy of the twenties. As Peter Temin has argued, “The Depression ushered in an age of moderate socialism, albeit in many variations.” And after the defeat of the Nazi regime, political convergence was added to convergence in economic policies.

In the eyes of many contemporaries the thirties marked a change from a regime based on the trust in the forces of the free market to a regime that recognized the inherent deficiencies of markets and assigned the state the task of correcting market outcomes. That the goal of internal equilibrium instead of a fixed exchange rate now achieved priority seemed the logical, if somewhat belated, consequence of general suffrage.

This book began by outlining a number of hypotheses, generated from group theory, concerning the sort of associational order we might expect to see emerging from post-communist society. Group theory locates the origins of association in the issues and cleavages arising in economic life, with interest group configurations reflecting the structure of capital, employment relations and labour market dynamics. Post-communist societies in the early stages of market transition, it was suggested, were insufficiently differentiated to generate associational activity on pluralist lines. Whilst market transition could be expected to break up the monolithic structures of communist society, it was unlikely to generate the sharply defined cleavages and cohesive social formations that gave birth to associational activity in industrial society. Instead, I postulated a pervasive process of social dealignment and the emergence of rather fluid and atomized societies in which the conditions for interest group formation would be singularly unfavourable.

With politics and society in east/central Europe still in flux, the outline of associational order has yet to emerge in sharp relief. Nowhere have we found even the semblance of a stable, fully functioning interest group system. In some countries, of course, interest group formation is prejudiced by the economic instability and chaos accompanying market transition. Elsewhere it is retarded by the slow pace of political and economic transformation, which leaves society relatively undifferentiated, with an economic elite dominated by a reconstituted nomenklatura and a few successful commercial magnates coexisting uneasily with an impoverished mass.

In the introduction, we saw how systems of interest representation are embedded in employment and labour market relations. Corporatist systems emerge out of interaction between employer and employee, structured through stable networks of exchange between employers' associations and trade unions. As exchange transactions intensify, employment relations cease to be private economy arrangements, becoming institutionalized in the public domain (Crouch 1993: 30). Accordingly, organized interests broaden the scope of their activities. If they are able to enter the political arena, their interaction develops into a network of ‘generalised political exchange’ (Crouch 1993: 3, 53; Marin 1990b; Traxler 1990), facilitating their incorporation into the public policy process. Corporatism thus goes hand in hand with institutionalized employment relations entrenched either in law, as in Germany, or in mutual agreement between employers' associations and trade unions as in the Scandinavian countries.

Democratization and market transitions in east/central Europe coincide with a shift in the west away from institutionalized systems of employment relations. Economic globalization and technological change place a premium on company flexibility, with industrial relations subject to transitional tendencies towards decentralization and deregulation. The pace of change has been subject to considerable cross-national variation. The paradigm case of de-institutionalization is the United Kingdom, where single-employer bargaining is now endemic (Millward et al. 1992), whilst at the opposite end of the spectrum, in the corporatist heartland of Scandinavia, institutional entrenchment has proved resistant to wholesale change.

Interest organization exhibits a striking diversity of structural forms in different national contexts. The range of variation can be expressed in terms of a spectrum from the loose-jointed ‘pluralistic’ interest group system in the United States – ‘untidy, competitive … and very varied’ (Wilson 1993: 139), to the more formally structured, tightly integrated corporatist systems in some of the northern European countries. Cross-national heterogeneity can be explained by different patterns of economic development and corresponding differences in the class configurations from which organized interests emerge. It may also reflect differences in the institutional environment, which shapes the institutional design of the organizational landscape. The fragmentation of the American system, for instance, has been explained by the dispersal of power within the apparatus of the state (Salisbury 1979: 218–20). In short, ‘the characteristics of associational systems … are deeply influenced and determined by the socio-economic and political history of each single country’ (Lanzalaco 1992: 199–200).

The centralized, hierarchical design characteristic, as we have seen, of corporatist systems is unlikely to emerge spontaneously in the early stages of democratic transformations. Corporatist design is associated with sharply defined and cohesive class formations. With its social structures as yet ill defined, post-communist society is likely to generate a more fragmented spectrum of interests, reflected in interest group systems which approximate more closely the more untidy and varied pattern of the pluralist design.

In the introduction I located the source of associational activity in the issues and cleavages arising out of economic relations. Interest group configurations reflect patterns of social differentiation embedded in the underlying structure of capital ownership, and the ordering of employment relations and labour markets. For both employer and employee, the employment relationship is the source of the ‘categoric cleavage’ around which common interests form, and group formation is decisively shaped by the character of the relationship. Institutionalized employment relations and homogenous labour markets, it was argued, are the key to solidaristic forms of trade union mobilization. Employers also share common interests in labour market relations, but their interests are defined also in relation to their status as owners of capital. Business interests are thus shaped by the degree of capital concentration, the mix between national and international capital, and relations between large and small firms.

From this perspective, the attempt to identify emergent patterns of interest group activity in post-communist society should begin by examining the structures of capital ownership and employment accompanying market transition. In the early stages of transition, it has been argued, economic relations are insufficiently developed to generate the stable and clearly defined group interests and identities on which the associational order is based in group theory.

As we saw in the introduction, the pluralist model of the associational order implies autonomous organization based on the volunteer involvement of the participants, with a professional staff merely serving the function of organizational maintenance. This conception of group dynamics was contrasted with the model postulated by exchange theory, in which associational activity is conceived in terms of the relationship between the professional leadership of the group offering benefits to a clientele in return for membership. Group leaders are thus seen as political entrepreneurs, and association is reinterpreted as a type of business activity, its defining characteristic being the essentially commercial relations between the group and its members. If, as we saw in the previous chapter, the decision to subscribe to an interest group is governed by instrumental cost–benefit calculations, the willingness to participate in organizational activity is likely to be lower than where membership motivations revolve around the solidary incentives associated with group identification. Group dynamics are thus likely to be characterized by mass passivity and professional domination, taking the form of the loosely coupled exchange relationship of the entrepreneurial model rather than the pluralist ideal of autonomous associational activity.

Empirical studies of the internal life of interest groups in the post-communist societies of east/central Europe are scarce, but what evidence there is supports the expectations outlined above. Trade union activity is strongly marked by the syndrome of mass passivity and elite domination.

This chapter examines the behavioural dimension of associational activity. It is motivated by one central question: is the social and cultural composition of post-communist society conducive to group participation and collective action? The question can be approached from the three social science perspectives outlined in the introduction, each focusing on somewhat different aspects of the socio-economic makeup of society. First, from the social psychological perspective, participation is taken to be a property of the democratic personality, in which a sense of personal effectiveness engenders perceptions of efficacy in public life. Post-communist society, it will be argued in this chapter, is unlikely to foster the sense of material security which has been seen as one of the essential prerequisites of the democratic personality. With its combination of opportunities and threats, market transition is reflected in a dual psychological response: either economic individualism and the pursuit of private material objectives, or a sense of powerlessness and anomie in the face of unfamiliar market forces. Survey data will be used alongside interview findings to investigate the effects of east Germany's accelerated market transition on psychological orientations towards participation in the associational arena.

A second approach equates democratic participation with the accumulation of social capital. In Almond and Verba's formulation, the roots of a civic culture lie in mutual trust and co-operation in social life spilling over into the political sphere.

As we saw in the introduction, association was initially ascribed a key role in democratic transition. The rise of Solidarity alongside the crisis of the communist state in Poland in the 1980s and the emergence of undercurrents of opposition elsewhere in east/central Europe fostered a wide-spread belief in the potential of autonomous associational activity for hastening the demise of communism and creating the conditions for post-communist democracy. This belief was buttressed by changing perceptions of the power structure of the communist state, as the notion of totalitarianism gave way to a more pluralist conception of group interests jostling for influence within a more differentiated political system. Perceptions of oppositional activity as the seedbed of civil society were thus reinforced by a pluralist analysis of group mobilization in the internal dynamics of the regime, fuelling the belief in association as the mainspring of post-communist politics and society.

In retrospect, the belief in opposition movements as the foundation of post-communist civil society can be seen to have been greatly exaggerated. Whilst other revolutions have come about through the mobilization of new social formations, the democratic revolutions in east/central Europe were precipitated by the enfeeblement and collapse of regimes through economic sclerosis. In some countries, democratic revolution was not accompanied by mass mobilization; even where it occurred, it was rarely much more than a sideshow to the main event. The course which the revolutions took, and the outcome, was dictated much more by the interaction of elites.

The emergence of interest group politics in post-communist society is one of the decisive issues of democratic transformation. Interest groups occupy a key position in pluralist democracy, aggregating private interests, representing those interests in the public policy process and thereby mediating between society and the state. The free association of individuals in groups formed to promote their common interests is thus an important tributary of the democratic process. Their emergence in the new states of east/central Europe is widely recognized as one of the main preconditions of democratic consolidation. Research suggests, however, that, whilst interest groups have proliferated across the region, they bear little resemblance to the pluralist model. Their predominant characteristics are continuity with the old regime, organizational instability and fragmentation, elite domination and mass passivity, and an outsider status in the public policy process. This book attempts to explain the hesitant emergence of associational activity in post-communist society, and to predict the sort of associational order we might expect to see in the future.

It approaches the question from the perspective of group theory. The theoretical core of the book is provided by the various strands of pluralist theory which identify the source of associational activity in particular patterns of social differentiation and stratification arising out of economic relations of modern society.

The general explanatory approach underpinning this analysis claims that empirical policy patterns in distinct policy areas may be accounted for by examining the goal-oriented, rational-strategic interactions of public and private corporate actors with a stake in that policy area. Actors' interactions are guided by considerations of self-interest in that they attempt to achieve their goals, such as maximising their resources, in a specific context of institutional rules. While systems of rules, as factors, may both restrain and facilitate actors' choices, they do not determine them. There is always space for the individual actor's decision-making, accounted for by specific preferences, belief systems and cultural traditions (Mayntz and Scharpf 1995).

Interaction in a policy field may be understood as a process of bargaining and conflict among ‘consequential’ actors who dispose of diverse, but mutually important, resources – material, legal, informational, expertise and networking-related – which are exchanged and bargained for in a particular institutional context so as to reach a policy decision (Lauman and Knoke 1987). All actors concerned share a primary interest in the policy area, but pursue different specific goals.

If European policy-making is understood as the interaction of public and private corporate actors in an area of common policy interest, then such policy processes cannot be interpreted solely in terms of the national preference-formation and power considerations of member-state governments prior to EU bargaining processes (Moravcsik 1993).

Redistributive policies convey resources to specific groups or individuals at the expense of other groups or individuals. This in turn gives rise to a basic economic cleavage which pitches those who finance policy measures against those who benefit from them – the ‘haves’ vs. the ‘have-nots’ – and makes the resolution of conflicts the chief problem facing European policy-makers in redistributive policy. The conflicting interests in regional and social policy, between those who finance a measure and those who benefit from it, vary according to scope and mode. In regional policy, for example, the European Union pursues redistributive objectives to narrow spatial disparities, and successive reforms have been passed enabling the Commission to target financial aid to the poorest regions within the EU (Mazey 1996). In European social policy, the question is whether benefits should be redistributed between classes and age groups, and in European labour-relations policy, to what extent workers should be granted rights such as access to information or co-decision-making vis-à-vis management.

Beyond this divide, disputes between European and national actors over competences are pronounced in both policy areas. Where the Commission works to secure rights enabling it to target resources, member-state governments defend those same rights vehemently precisely because the power to distribute funds – to regions and local authorities (regional policy), individuals or groups (social policy) – constitutes an important source of electoral legitimation.

Under which conditions and in what form do deadlock and development emerge in market-making policy? The goal of a European market-creating policy is to eliminate trade barriers so that individual actors may benefit from the exchange of goods, services, capital and labour. However, the large-scale gains obtained from the integration of national markets tend to be unevenly distributed across countries, sectors and groups. Hence, market creation evokes support from liberalisers who expect to benefit and opposition from pro-regulators who expect to lose. Exactly how diverse interests are reconciled by manoeuvring around decisional dead-locks is explored by taking a look at two examples of the European policy of service integration, transport, where I examine the abolition of trade barriers in road haulage, and telecommunications where I focus on the liberalisation of telecommunications services.

Road haulage policy

Articles 3(f) and 74 of the Treaty of Rome state, in general terms, that the Community should develop a common transport policy. For almost three decades, however, transport policy in Europe was considered to be a story of: ‘[f]alse starts, of politically inept Commission proposals, or persistent Council inaction, of divided government views’ (Lindberg and Scheingold 1970: 143). Nevertheless, a basic decision to harmonise was taken as far back as 1965 in order to resolve the competitive distortion between road, rail and inland waterway transport. As regards prices, in 1968 the Council agreed to a system of compulsory bracket tariffs for international road transport.