Revisiting the Party Paradox of Finance Capitalism: Evidence from Switzerland, Sweden, and the Netherlands

Centre for Business Research, University of Cambridge, Working Paper No. 372

34 Pages Posted: 20 Mar 2009

See all articles by Gerhard Schnyder

Gerhard Schnyder

Loughborough University London - Institute for International Management; University of Cambridge - Centre for Business Research

Date Written: December 2008

Abstract

The 'party paradox' thesis claims that centre-left parties have a genuine interest in pro-shareholder corporate governance reforms, while centre-right parties oppose such reforms. Based on case studies of Switzerland, Sweden, and the Netherlands, I test the accuracy of this thesis and find that it does not apply to either of these cases: in Switzerland pro-shareholder reforms were made possible by centre-right not centre-left support; In Sweden and the Netherlands pro-shareholder reforms were marginal, because a broad coalition uniting centre-right and centre-left opposed them. My findings show therefore that the 'party paradox' is not a universal phenomenon and that most micro-level explanations of this phenomenon are inaccurate. In order to explain in which cases a party paradox will emerge, we need to add the nature of relations between employees and employers (cooperative vs. confrontational) as a determinant of centre-left preferences.

Suggested Citation

Schnyder, Gerhard, Revisiting the Party Paradox of Finance Capitalism: Evidence from Switzerland, Sweden, and the Netherlands (December 2008). Centre for Business Research, University of Cambridge, Working Paper No. 372, Available at SSRN: https://ssrn.com/abstract=1360706 or http://dx.doi.org/10.2139/ssrn.1360706

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