When conservative governments in Portugal and Spain attempted to further liberalize labor markets and decentralize collective bargaining, the majority of business in both countries opposed.
Only the automobile sector in Spain, export-oriented, supported this measure. This contradicts two long-held views about business’ responses to economic pressures: that the majority of business sectors prefer the liberalization of industrial relations, and that the sole advocate of coordination is the export sector. Instead, Jimena Valdez argues that business has heterogeneous, and context-specific, strategies to regain competitiveness. Jimena unpacks business’ preferences by identifying four distinct rationales that drive their strategies: competition within economic sector, prevention of industrial conflict and worker representatives at the workplace, collective bargaining’ transaction costs, and binding commitments to employers’ associations. Jimena tests this argument with in-depth qualitative data collected during 12 months of fieldwork in both countries, including 132 interviews with politicians, policymakers, and members of business associations and labor confederations, among others.
Jimena Valdez is Fellow in European Political Economy at LSE European Institute. Her research centers on how states are challenged by and respond to domestic and international capital, and how business’ power, strategies and preferences are shaped by economic and technological change. Jimena received her PhD in Government from Cornell University in 2020.
Angelo Martelli is Assistant Professor in European and International Political Economy at LSE European Institute.