Do business interests sustain the welfare state?

The Austrian case


Thomas Paster, Max Planck Institut für Gesellschaftsforschung (Germany)


In recent decades, business interests in many countries became more assertive in pushing for welfare retrenchment, arguing that high labor costs impede international competitiveness. Austria’s peak-level employers’ federation, the Wirtschaftskammer Österreich (WKÖ), stands out as an exception in this regard. The WKÖ takes relatively moderate positions on welfare state reform compared to employers’ federations in other European countries. In particular, as I show in the talk, the WKÖ opposed pension reform plans by the right-wing coalition government in the early 2000s. This talk discusses the reasons for this exceptionally moderate role of Austrian employers. I suggest that the institutional setup of interest representation in Austria explains this stance better than alternative explanations that focus on competitive advantages. These institutional features are compulsory membership, equal voting rights and encompassing organization. These features shaped the WKÖ’s social policy attitudes in two ways: first, by ensuring a strong role for small firms, and second, by reducing the vulnerability of the organization to discontented minorities among its members. The findings point to the importance of organizational structures in shaping associational policy preferences.

International Seminar


International seminar


European Centre