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What Capital Wants: Business Interests and Labor Market Reform in Portugal and Spain

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Under what conditions are governments able to liberalize labor markets? I leverage the cases of Portugal and Spain, two countries hit by the Eurozone crisis and constrained in their policy options, that diverge in the key measure mandated by international creditors to recover – the decentralization of collective bargaining. Against the common assumption that the liberalization of labor is widely embraced by capital, I show that governments are only able to advance labor reforms when there is a leading industrial export sector that benefits from it and provides a powerful domestic social partner. I test this argument with in-depth qualitative data collected during twelve months of fieldwork in both countries, including 129 interviews with politicians, policy-makers, and members of business associations and labor confederations, among others.
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Keywords: BUSINESS; ECONOMIC CRISIS; LABOR MARKET REFORMS; POLITICAL ELITES

Document Type: Research Article

Publication date: July 1, 2021

This article was made available online on December 17, 2020 as a Fast Track article with title: "What Capital Wants: Business Interests and Labor Market Reform in Portugal and Spain".

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  • Comparative Politics is an international journal that publishes scholarly articles devoted to the comparative analysis of political institutions and behavior. It was founded in 1968 to further the development of comparative political theory and the application of comparative theoretical analysis to the empirical investigation of political issues. Comparative Politics communicates new ideas and research findings to social scientists, scholars, and students, and is valued by experts in research organizations, foundations, and consulates throughout the world.
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