Coordination in Transition

The Netherlands and the World Economy, 1950–2010


This book analyzes the evolution of the institutional structure of the Dutch political economy since 1950. It sketches in broad strokes the origin and economic role of coordination in the Netherlands. The Dutch economy is compared with other OECD countries by using the ‘varieties of capitalism’ theory and distinguishing between coordinated and liberal market economies. The author focuses on the constant adaptation of deliberative institutions in the business system, in labor relations, and in welfare policy.
The complex institutional setting did not prevent the economy from participating in the globalization of markets and capital that took place since ca. 1980. The book is located at the intersection of two quite different literatures: modern economic history and the political science literature on ‘varieties of capitalism’.

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Jeroen Touwen teaches economic and social history at Leiden University. He obtained his Ph.D. in 1997, with the book Extremes in the archipelago: Trade and economic development in the Outer Islands of Indonesia, 1900-1942 (Leiden: KITLV Press, 2001) and since then has published a range of articles on Dutch economic history.
[...] [A]n impressive and voluminous book of which the principal title, Coordination in Transition, neatly captures the key theme [...]. One of the new contributions of this book is that it also analyzes recent economic history of the Netherlands, in contrast with most other Dutch studies that only treat the twentieth century.
Also readers with no particular interest in the Dutch case (or those who think they already know the country, for that matter) will find this book worthwhile to read, as each chapter sets out with a broader treatment of theoretical considerations before analyzing the Netherlands, each time accompanied by a comparison with several other western OECD countries; and as the author makes relevant statements about (developments of) LMEs and CMEs in general. [...] The large number of interesting footnotes and references underline the thoroughness and dedication with which the book was written.
Annette van den Berg (Utrecht University School of Economics), EH.Net, Book Review (August 2015).
Acknowledgments ... vii
List of Tables and Figures .. viii
List of Abbreviations ... xii

1 Introduction: A Tension between Coordination and Competition? ... 1
Coordination in the Netherlands ... 1
Traditions of Approaching Institutions ... 10
Capitalisms Compared ... 17

2 Growth and Structural Change in the Netherlands and Other OECD Economies ... 33
Have 50 Years of Structural Change Lessened the Degree of Coordination? ... 33
Economic Growth in the Netherlands after World War II ... 35
The ‘Convergence Club’ of Dissimilar OECD Economies ... 44
Alternative Indicators of Economic Development ... 52
Structural Economic Change and Technological Change ... 62
Effects of Technological Change on the Typology of ‘Varieties of Capitalism’ ... 78
Conclusion: More Market, not Less Coordination ... 86

3 At Ease with the Market: Coordination in the Dutch Business System ... 88
Characteristics of the Dutch Business System ... 88
Business Systems, Culture, Family Firms ... 89
The Composition of the Private Sector ... 100
Cooperation among Firms ... 104
Interlocking Directorates and Other Aspects of Corporate Governance ... 116
Eager Globalizer: The Openness of the Dutch Economy ... 123
Conclusion: Worldwide Developments and Local Adjustments ... 135

4 Corporatism and Pragmatism: Coordination in Labor Relations ... 142
Where Did Dutch Coordination Come from and Where Will It Go? ... 142
Specific Aspects of Coordination in Labor Relations ... 143
The Evolution of the Dutch Consultative System ... 148
From Postwar Consensus to Polarization ... 166
Institutional Change after the Wassenaar Agreement of 1982 ... 172
The Central Position of the SER and the Failure of the Green Polder Model ... 184
Labor in a Changing World: The Netherlands in a European Context ... 190
Conclusion: A Pragmatist Tradition of Consultation ... 201

5 Coordination and Trust: The Dutch Welfare State ... 205
Coordination and the Welfare State ... 205
The Peculiar Path of the Dutch Welfare State ... 209
Monitoring the Levels of Social Spending ... 227
Effects of Coordination on the Development of the Dutch Welfare State ... 240
Conclusion: Coordinated Interest in Social Protection ... 248

6 Economic Policy: In Search of Shared Economic Responsibility ... 250
Reconciling Different Agendas ... 250
Economic and Social Goals of Dutch Postwar Policy ... 255
Changing Policy Priorities During the 1980s and 1990s ... 262
Towards a New Type of Capitalism: Privatization, Liberalization, and Reregulation ... 276
Effects of Coordination on Government Policy ... 291
Conclusion: Coordinated Neoliberal Capitalism ... 312

7 Changing Context, Changing Framework ... 316
General Conclusions on Coordination ... 316
Non-market Coordination in the Netherlands ... 323
Towards the Future ... 337

Bibliography ... 343
Index ... 369
Scholars and students (economic and social historians, political scientists) interested in the Netherlands, and in political economy, comparative capitalism, economic change, institutional change, labor relations, welfare state, business systems and economic policy.