Regulatory Contradictions: The Political Determinants of Labor Market Inequality in Korea and Japan

Growing labor market inequality in Korea and Japan is often blamed on increased trade competition with China, the information technology revolution, and aging populations. This study shows that labor market inequality is not simply driven by such structural changes but by the nature of the ways in which new labor market regulations were created and the resulting regulatory contradictions. Although its state-centric strategies designed new labor market regulation favoring marginal workers, the Korean government failed to resolve labor market inequality. This is because the government's new regulatory goal was not backed by sufficient policy resources or adequately coordinated with other policy areas. Conversely, Japanese authorities prioritized the employment stability of regular workers on the basis of consensus among labor and business groups and the government. However, this narrow goal continues to inhibit progress in closing the gap of labor market inequality.     

Social capital in the Japanese youth labor market: Labor market policy,schools, and norms

This paper develops the concept of institutional social capital and discusses its importance in the labor market. Institutional social capital is constituted by the resources inherent in an organization (such as a school) and thereby available to members of that organization. This is contrasted with the social capital available to individuals through their own personal networks. In the labor market context, an example of institutional social capital is the ties that schools have with employers who recruit a proportion of their new employees as they prepare to graduate. The paper examines how these ties and the norms governing the important labor market screening role played by the high school developed in post-WWII Japan. I also discuss an important positive externality – social control over students – generated by schools institutional social capital. Finally, I examine current challenges to Japanese high schools institutional social capital.     

Defending the organisation,not the members: Unions and the reform of job security legislation in Western Europe

European labour markets are often described as rigid with comparatively high levels of job protection that do not allow for the flexible adjustment of employment to economic fluctuations. This interpretation overlooks important sources of flexibility, however. Research has shown that recent labour market policy reforms have allowed for the creation of two‐tier labour markets consisting of insiders in standard employment relationships and outsiders in non‐standard employment. This outcome has typically been explained by pointing to the representational interests of unions or social‐democratic parties. It has been argued that rather than protecting all labour market participants, unions and social‐democratic parties focus on the interests of their members and their core constituency, respectively, most of whom are in standard employment relationships. In contrast, it is argued here that unions' institutional power resources are the crucial variable explaining this outcome. In difficult economic times, when unions are asked to make concessions, they will assent to labour market reforms, but only to those that do not fundamentally threaten to undermine their organisational interests. In the context of job security legislation, this means that unions defend the protection of permanent contracts while they compromise on the regulation of temporary employment. This ‘second best solution’ allows them to protect their organisational interests, both by retaining their institutional role in the administration of dismissals and by living up to their institutional role as one of the organisations responsible for the direction of labour market policy reform. Using fsQCA this article shows that unions' institutional power resources are more apt to explain the observed two‐tier reform pattern than the unions' or the social‐democratic parties' representational interests.     

Institutional competitiveness,social investment,and welfare regimes

Are the rather generous welfare regimes found in most European countries sustainable; that is, are they competitive in a globalizing economy? Or will they, on the contrary, be crowded out by the more austere and less expensive regimes generally found in liberal Anglo‐Saxon countries? We first discuss this issue conceptually, focusing on the notions of institutional competitiveness, social investment, and short‐term and long‐term productivity. We then briefly present the results of an empirical study of 50 social indicators of policies and outcomes in 20 Organization for Economic Co‐operation and Development (OECD) countries during the early 2000s. We conclude that welfare regimes have not been forced to converge through a “race to the bottom.” There remain three distinct ways to face the “trilemma” of job growth, income inequality, and fiscal restraint: Nordic countries achieve high labor market participation through high social investment; Anglo‐Saxon countries attain the same objective through minimal public intervention; while Continental European countries experience fiscal pressures because their social protection schemes are not promoting participation to the same extent.     

Immigration,Globalization, and Unemployment Benefits in Developed EU States

At a time of mounting concern about how traditional welfare states will react to globalization, there has been increasing interest in specifying how global economic forces affect welfare policies in industrialized states. Building on theories from the political economy and comparative institutional literatures, we analyze the influence of an important aspect of globalization—the flow of immigration. Focusing on states in the European Union, we present a theoretical model that illustrates the interactive relationships between immigration, EU labor market integration, and domestic institutions. Our findings highlight how immigration in conjunction with domestic political institutions affects unemployment provisions, while labor market integrative forces remain in the background. The story of immigration and unemployment compensation in the EU is less about the opening of borders and the market forces of integration and more about the domestic political pressures.     

Institutional competitiveness in the global economy: Denmark,the United States,and the varieties of capitalism

Despite high taxes, a large welfare state, and much economic regulation, Denmark competes successfully against other advanced capitalist economies. Denmark’s success is based in large part on its institutional competitiveness – its capacity to achieve socioeconomic success as a result of the competitive advantages that firms derive from operating within a particular set of institutions. The institutional basis for successfully coordinating labor markets and vocational training programs are examined for Denmark and the US – two countries that were very different institutionally but very successful in the 1990s and in the 2000s. We show that there is no one best way to achieve success in today’s global economy, except with respect to social inequality; that the mechanisms underlying institutional competitiveness are more complex than often recognized; that institutional hybrids can be as successful as purer political economic cases; and that high taxes and state spending can enhance socioeconomic performance. As such, this paper challenges both neoliberalism and the varieties of capitalism school of comparative political economy.     

The Politics of Social Welfare Reform in Urban China: Social Welfare Preferences and Reform Policies

China’s social welfare reform since the mid-1980s has been characterized as incremental and fragmented in three dimensions—social insurance, privatization, and targeting. This paper attempts to explore the micro-foundation of China’s urban social welfare reform by examining the diverse social welfare preferences and the cleavages among societal groups. It argues that the diversity of the societal groups’ preferences for social welfare has given rise to two lines of cleavage in urban China with respect to social welfare—between state sector and non-state sector employees and between labor market insiders and outsiders. The Chinese authoritarian regime’s political priority—economic growth with social stability—has induced the government to accommodate public social welfare preferences in social welfare policies. Therefore, the three dimensions of Chinese social welfare reform policies since the mid-1980s reflect and respond to the social cleavages derived from societal groups’ different preferences for social welfare.     

Institutional Reforms and Democratization in Korea: the Case of the Kim Young Sam Administration, 1993–1998

This article examines the nature of political and institutional reform initiatives that have been carried out under former president Kim Young Sam. How effective have they been in consolidating democracy in Korea? Specifically, we examine why the Kim Young Sam government's political reform campaigns have been limited, and explore the impact of this limitation on his institutional reform initiatives and the process of consolidation of democracy in Korea. We argue that Kim Young Sam's initial political reform campaigns have contributed to creating a favorable environment for his institutional reform efforts. However, limitations of these initial political reform campaigns such as political funding and bribery scandals have hampered institutional reforms. We also argue that these difficulties were intensified by public dissatisfaction with Korea's poor economic performance and International Monetary Fund (IMF) financial assistance. As a result, Kim Young Sam's moral legitimacy as a civilian and reform-oriented leader toward the public has totally evaporated. Therefore, experiences under the Kim Young Sam administration are just trials and errors of democratization that show another failure in presidential leadership in Korea. These experiences will negatively affect the consolidation process of democracy in Korea by increasing the public's distrust of government as a whole. As a result, democratic consolidation in Korea is being delayed.     

Two spheres of regulation: Balancing social and economic goals

Independent regulatory authorities hold comprehensive policy mandates that cover both economic and social goals. They take on various roles in market regulation, competition policy, consumer protection, and labor inspection. This article questions whether policymakers are driven by different rationales when delegating the realization of social, as opposed to economic goals, and analyzes how regulators accommodate their various roles in practice. The conceptual framework links the literature on delegation and organizational models. Comparative analysis of postal policy in France, Germany, and the United Kingdom covers a serious area of potential conflict between social and economic regulation. Variation in delegation points to the relevance of instrumental considerations, but also to the politics of institutional arrangements. Variation in regulatory practice shows that organizational models make a difference in accommodating conflict. The article makes a strong case that social and economic regulation need to be addressed as two distinct, yet interacting spheres. © 2017 John Wiley & Sons Australia, Ltd     

Public Spheres and Urban Space: A Critical Comparative Approach*

China's mounting unemployment in recent years is an unintended but predictable consequence of the economic reform with an open labor market. It has turned into a major political crisis in a "socialist state" where not only security but also sovereign dignity of labor remain central to the constitutional mandate and, however lingering, to popular expectation as well. This article traces the origins of the crisis, explores linkage between participation and recognition, explains mutual relevance of the EuroAmerican "future of work" debate and the Chinese experience, and argues for creative adaptation toward an alternative. It concludes with an observation that participatory activities beyond salaried jobs would require guaranteed social security; and only institutional innovations in public policy that enable democratic control by citizens over resources and management can forge a new social contract for overcoming unemployment.     

中国劳动力市场演化与政府行为

劳动力市场培育是中国改革的核心问题之一.中国经济改革是在城乡隔绝的特殊背景下展开的.旧体制下,城市国有部门人浮于事,大锅饭、铁饭碗造成效率低下;农村劳动力被禁锢在土地上,隔离在国家工业化进程之外,大量农村剩余劳动力不能及时转移到非农产业,造成极大浪费和损失.劳动力市场改革基于城市"治懒"、农村"治贫"的目标展开.逐步把国有部门职工推向市场,同时逐步改善农村劳动力的配置效率,渐进式改革、逐步释放被压抑的生产力,这是中国经济持续高速增长的根本动力.劳动力市场培育也是城乡劳动者权利的双向调整和逐步接近的过程.改革已取得了很大进展,但城乡劳动者的平等权利尚未实现.名义权利与实际权利的差异是当前最突出的问题.这种权利差异对经济社会协调发展造成威胁.增长、稳定、公平是左右政府改革行为的三大变量.劳动力市场上的权利不平等已成为经济持续增长和社会稳定的巨大障碍.贯彻新发展观,构建和谐社会正在使政策导向发生改变.     

Institutional development in the era of economic policy reform: Concerns,contradictions and illustrations from Malawi

The article argues that the essence of economic policy reform programmes—both their substance and their pace—runs counter to the central notions of sound institutional development. Attention is first given to some fundamental concerns about the relationship between the two processes, in particular focusing on questions of culture, speed of change and the political environment. The article then provides some illustrations from Malawi, looking in turn at collateral institutional damage, the new generation of semiautonomous organizations, confusing incentives systems in the areas of salaries, housing and training, and lack of serious concern for the sustainability of the reforms. The conclusion calls for returning ‘part-ownership’ of the reform programme to the local officials, and trying to reduce some of the institutional unreality, which seems to adhere to the implementation of the reforms.     

The politics of Artificial Intelligence regulation and governance reform in the European Union

This paper explores political drivers and policy process of the reform of the framework for Artificial Intelligence regulation and governance in the European Union (EU). Since 2017, the EU has been developing an integrated policy to tighten control and to ensure consumer protection and fundamental rights. This policy reform is theoretically interesting, raising the question of which conceptual approaches better explain it, and it is also empirically relevant, addressing the link between risk regulation and digital market integration in Europe. This paper explores the policy reform mainly by using two case study methods—process tracing and congruence procedure—using a variety of primary and secondary sources. It evaluates the analytical leverage of three theoretical frameworks and a set of derived testable hypotheses concerning the co-evolution of global economic competition, institutional structure, and policy preferences of domestic actors in shaping incremental approach to AI regulation in the EU. It is argued that all three are key drivers shaping the reform and explain the various stages of the policymaking process, namely problem definition, agenda-setting, and decision-making, as well as the main features of the outcome.

     

Coordination as a Political Problem in Coordinated Market Economies

The purpose of this article is to explore the political dynamics of employer coordination in three well‐known “coordinated market economies.” We examine differences in how employer coordination has been organized in Sweden, Germany, and Japan in the area of industrial relations, and we examine the extent to which such coordination represents a self‐sustaining equilibrium, as some of the most influential treatments suggest. To preview the findings, we argue that precisely the intensification of cooperation between labor and management in some firms and industries (that the “varieties of capitalism” literature correctly emphasizes) has paradoxically had deeply destabilizing collateral effects that have undermined or are undermining these systems as they were traditionally constituted. All three cases are characterized not so much by a full‐blown breakdown of coordination so much as a very significant reconfiguration of the terms and scope of such coordination. Specifically, all three countries feature the emergence of new or intensified forms of dualism—different in each case based on different starting points—in which continued coordination within a smaller core has in some ways been underwritten through the breaking off of other, more peripheral, firms and workers.     

Bureaucracies,Neoliberal Ideas,and Tax Reform in New Zealand and Ireland

Why did New Zealand adopt one of the most neoliberal tax systems in the world, whereas Ireland pursued a heterodox tax policy of low rates, deep deductions, and distortionary tax incentives? The diverging tax policy trajectories of these two small liberal market economies since 1980 are not well accounted for by conventional ideational, partisan, or political‐institutional explanations. The article argues that the varying degree of neoliberal reform is better understood as the result of differences in the institutionalization of economic knowledge within the state. Distinct administrative institutions in New Zealand and Ireland gave rise to profound differences in the identities, expertise, economic ideas, and policy advice approach of tax policy bureaucrats, which had a major impact on tax policymaking in the two countries.     

Politicization,Bureaucratic Legalism,and Innovative Attitudes in the Public Sector

Previous studies have identified institutional, organizational, and individual factors that promote innovation in public organizations. Yet they have overlooked how the type of public administration—and the type of administrators—is associated with innovative attitudes. Using two large, unique comparative data sets on public bureaucracies and public managers, this article examines how bureaucratic politicization and legalistic features are associated with senior public managers’ attitudes toward innovation in 19 European countries. Results of multilevel analysis indicate that the bureaucratic politicization of an administration and the law background of public managers matter. Public managers working in politicized administrations and those whose education includes a law degree exhibit lower pro-innovation attitudes (i.e., receptiveness to new ideas and creative solutions and change orientation).     

Clinton and volunteerism: The poverty of American social policy at the end of the century

Abstract

Volunteerism has resurfaced in late 20th century America as an alternative to comprehensive state social policies. The impression given is that voluntary involvement—“human contact”—is the answer to the vast social problems facing the millions of America's poor today and to the growing class inequalities and social polarization. The present article argues that the shift to volunteerism is prompted by fiscal constraints, the radical shift in the balance of power between capital and labor, and the conversion of the state into an instrument of overseas expansion for the interests of financial capital and the multinationals. Its authors advance the claim that the philosophy of volunteerism is a great deception—an ideology of the rich and powerful that aims to deny that social problems are structural and related to the capitalist system and thereby to disguise the exploitation of the poor and the inequality of classes.     

Governing the Chinese Economy: Regulatory Reform in the Service of the State

Pursuant to its extensive program of market reforms, China’s government tried to restructure itself to support a market‐dominated economy. Reform efforts have included elements that are familiar to scholars of public administration: streamlining government, strengthening bureaucratic capacity, distancing government from firms, and establishing independent regulators. But how deep have these reforms been, and with what ultimate goals? This article examines a crucial segment of the economy—China’s so‐called lifeline industries—to show how reforms to China’s economic governance system have been mapped onto an existing system characterized by extreme institutional fragmentation and an inability to imbue new governmental bodies with authority. Moreover, for these key industrial sectors, the Chinese party‐state’s strong interests in ownership, revenues, and social policy dictate that it use a variety of tools to protect these interests.     

Is South Korea as Leftist as It Gets? Labour Market Policy Reforms under the Moon Presidency

Considering its conservative past, South Korea is undergoing an unprecedented turn to the left. Since priority was given to economic growth from the 1960s until the beginning of the 1990s, a close alliance between big business and government has characterised the country's labour market. Since the 1997 financial crisis, however, two decades of liberal and conservative governments have pushed a neoliberal agenda of labour market flexibilisation, which has resulted in growing inequality in a dualised labour market and left the trade unions in a marginal role. Following a rapid turn of events that led to the impeachment of conservative president Park Geun‐hye, left‐leaning President Moon Jae‐in seems determined to roll back this legacy of labour oppression with the strong support of trade unions and young voters. His administration is pushing for policy change with a series of expansionary active labour market policies aimed at promoting stability and full‐time employment. This article highlights the social‐democratic character of these reforms and the constraints in implementing them.     

Prisoners and escapees: improving the institutional responsibility square in Bangladesh

The article argues that explanations of problematic governance are institutional rather than organizational and have their roots in the deep structures of society. Bangladesh is used as an exemplar for such analysis, deploying the notion of the institutional responsibility square comprising four institutional domains of state, market, community and household. A prior or ‘total institution’ metaphor is used to describe the ways in which different classes are obliged to pursue their livelihoods, entrapped within the problematic social embeddedness of these four institutional domains. The article develops this argument via three themes: permeability between these domains (i.e., blurred moral boundaries between public and private behaviour); problem of legitimation of public institutions, given this permeability; and the incorporated rather than independent characteristics of civil society, thus limiting optimism about its potential to create reform. Nevertheless the article offers a strategic agenda of institutional improvement (i.e., escape from the prison) based on the principles of shifting people's rights from the problematic, uncertain informal sphere towards the formal realm. Copyright © 2000 John Wiley & Sons, Ltd.