The Role of Ideas in Understanding Industrial Relations Policy Change in Liberal Market Economies

• Date: 01 October 2018
• Author: Colm McLaughlin,Chris F. Wright
• Published date: 01 October 2018
• DOI: http://doi.org/10.1111/irel.12218

The Role of Ideas in Understanding Industrial

Relations Policy Change in Liberal Market

Economies*

COLM MCLAUGHLIN and CHRIS F. WRIGHT

This paper analyzes the uneven processes underpinning industrial relations policy

liberalization in New Zealand, Australia, the UK, and Ireland. Drawing upon 140

elite interviews and building upon ideational comparative political theories, the

paper highlights the role of ideas in the policy change process. It identifies how

particular ideas can be used to construct policy problems, how these ideas can

gain legitimacy through battles with competing ideas, and how policy legacies

can influence whether ideas take root. The findings from the comparative case

analysis expose a critical difference between “positive legacies”and “negative

legacies”to account for different liberalization trajectories.

Introduction

The process of policy change is necessarily a political one involving the

struggle over different ideas. While this is acknowledged within comparative

politics and political economy scholarship (B

eland 2009; Carstensen and Sch-

midt 2016; Prasad 2006; Rodrik 2014), comparative industrial relations schol-

arship has tended to overlook the dynamic and ideational nature of the policy

process. Accounts utilizing the Varieties of Capitalism framework (e.g., Frege

and Godard 2014; Goergen et al. 2012; Wailes, Ramia, and Lansbury 2003),

which has been the dominant frame of reference in comparative industrial rela-

tions scholarship (Bamber et al. 2016; Gould, Barry, and Wilkinson 2016),

focus mainly on the roles of institutional legacies or competition between

*The authors’affiliations are University College Dublin, Dublin, Ireland. E-mail: colm.mclaughlin@ucd.ie;

and University of Sydney, Sydney, Australia. E-mail: chris.f.wright@sydney.edu.au. The authors are most

grateful to the two anonymous reviewers and to Bradon Ellem for very useful and constructive comments

on earlier versions of this article; to the Industrial Relations Editor-in-Chief Chris Riddell for his guidance;

and to participants who provided feedback at the AIRAANZ Conference, Auckland, February 2015, and the

SASE Conference, London, July 2015. Several of the interviews for the Australian and UK cases were car-

ried out for joint research with Russell Lansbury and Willy Brown—the authors thank them for allowing

these interviews to be drawn upon in this article.

INDUSTRIAL RELATIONS, DOI: 10.1111/irel.12218, Vol. 57, No. 4 (October 2018).

©2018 Regent s of the Univers ity of Calif ornia Published by Wiley Periodicals, Inc., 350 Main Street,

Malden, MA 02148, USA, and 9600 Garsington Road, Oxford, OX4 2DQ, UK.

568

actors representing different economically derived interests to explain certain

national-level policy trajectories. The purpose of this paper is to highlight the

role of ideas in explaining industrial relations policy change since the 1980s in

four liberal market economies, namely New Zealand, Australia, the UK, and

Ireland.

Several key contributions to comparative industrial relations scholarship

have identified labor-market liberalization and institutional decentralization

resulting in greater employer prerogative among virtually all advanced econo-

mies since the 1980s, particularly in the context of increased global competi-

tion (e.g., Baccaro and Howell 2017; Howell and Givan 2011; Streeck 2009).

Thelen (2014) provides a slightly different perspective in emphasizing distinct

“varieties of liberalization”across diverse national systems in the context of

this liberalizing trend. However, this debate largely centers on coordinated

market economies (CMEs), focusing on issues such as: how the shift toward

greater liberalization among CMEs has manifested, how the forms and func-

tions of industrial relations institutions in these countries have changed and

adapted during this process, and why these changes have occurred.

The comparative literature has tacitly assumed a convergence to a neoliberal

model amongst liberal market economies (LMEs), whose role in the literature

has essentially served as a comparator for analyzing the extent of change in

CMEs at various stages of liberalization. Colvin and Darbishire’s (2013) exami-

nation of changes in the industrial relations systems of six Anglo-American

countries supports this view in relation to LMEs. They argue that since the 1980s

these countries have moved away from distinct industrial relations systems and

converged around a single “Anglo-American”institutional model. In this model,

wage determination has been decentralized to the workplace level with relatively

minimal influence of wider institutional forces aside from basic statutory protec-

tions. Colvin and Darbishire (2013: 1072) propose various factors to explain this

convergence in these countries, including “policy learning”and “the spread of

neoliberal ideas.”However, the processes through which and the extent to which

these ideas were implemented, or resisted, are left unexplained.

This paper addresses this gap with reference to the following research ques-

tion: how have neoliberal ideas influenced national-level industrial relations

policy processes among the liberal market economies? While we agree that

there has indeed been a liberalization of industrial relations institutions (Bac-

caro and Howell 2017), including among LMEs (Colvin and Darbishire 2013),

the paper draws attention to the diversity in the nature and extent of liberaliza-

tion and particularly in the processes underpinning policy change among the

four LMEs examined. In highlighting the small but nonetheless significant dif-

ferences in the industrial relations of these countries, we argue that the pro-

cesses of liberalization have been uneven and contested, and demonstrate that

The Role of Ideas in Industrial Relations / 569

the agency of industrial relations actors seeking to marshal different ideas are

important factors explaining these outcomes.

Drawing attention to the significance of ideas for explaining the similarities

and differences identified across national systems challenges the tendency

within comparative industrial relations scholarship to focus on institutions and

interests. In a “state-of-the-art”contribution to this journal by Wilkinson and

Wood (2012) on trends in contemporary institutional analysis and industrial

relations, institutional and interest-based rational choice explanations featured

centrally while ideas and ideational processes were given limited attention.

Our analysis draws on theoretical developments in the comparative politics

and political economy literature that seek to complement institutionalist and

interest-based perspectives by focusing on ideas (e.g., B

eland 2009; Carstensen

and Schmidt 2016; Rodrik 2014; Schmidt 2002, 2008). As Hauptmeier and

Heery (2014: 2473) suggest, ideas have causal properties and are “a potent

force guiding the regulation of the employment relationship.”We adopt a

broad definition of ideas, one that includes policy proposals, paradigms, and

ideals; the ideology and normative beliefs underpinning them about the way

the world works; and the discourse—or “battle of ideas”—that is utilized to

legitimate or resist them (B

eland 2009; Hauptmeier and Heery 2014; Schmidt

2002). This approach does not deny the influence of institutions, nor the power

of markets and economic interests, but rather emphasizes the role of ideas and

how they contribute to the dynamism and contestation of the industrial rela-

tions policy process. Specifically, we highlight how “negative”policy legacies

were successfully marshaled in New Zealand and the UK to advocate for

neoliberal industrial relations reform, while more “positive”policy legacies

counteracted the case for extensive liberalization in Australia and Ireland.

The paper proceeds as follows. The next section reviews the different theo-

retical approaches to comparative industrial relations scholarship and the

emerging literature on the role of ideas in the policy process. The methodolog-

ical approach is then outlined. The case studies of industrial relations policy

change in New Zealand, Australia, the UK, and Ireland are then presented.

The Discussion section synthesizes our findings and the Conclusion explains

the main theoretical contributions.

Ideas and the Policy Process

Institutionalist perspectives provide the dominant lens for analyzing compar-

ative industrial relations (e.g., Gould, Barry, and Wilkinson 2016; Katz and

Darbishire 2000; Wilkinson and Wood 2012; Wright et al. 2017). Despite

advanced industrialized nations facing similar economic pressures, comparative

570 / COLM MCLAUGHLIN AND CHRIS F. WRIGHT