ABSTRACT
This chapter examines the viability of social corporatism as exemplified by post-war Nordic economies. It provides a critical analysis of such claims, arguing that they are effectively based on mainstream non-accelerating inflation rate of unemployment (NAIRU) analysis and focus exclusively on adjustment in the labour market. The chapter argues that such claims are not supported by the evidence; rather than supply-side developments worsening the underlying performance of Nordic economies, much of the evolution of their unemployment rates can be explained in terms of aggregate demand factors. Further, in contrast to earlier literature on social corporatism, these accounts neglect the capital side of social corporatism. A complementary critique of Nordic models has also been advanced from a political economy of social democracy, derived from the varieties of capitalism approach. Financial liberalization and integration, by increasing the exit possibilities for capital, has acted to weaken the social bargain underwriting this investment effort.
