Left Partisanship, Corporatism, and the Reorientation of the Knowledge Economy in Advanced Capitalist Societies

Abstract

While the progress of the knowledge economy is inexorable, this paper argues that partisan politics and labor market institutions can affect the direction in which the knowledge economy progresses. In particular, a combination of corporatist industrial relations systems and left partisanship tends to foster greater wage restraint, and such a wage outcome tends to encourage the greater adoption of communications technology than information-processing technology in the economy. This reorientation of the knowledge economy toward communications technology, in turn, has egalitarian distributive implications. In particular, the greater adoption of communications technology reduces wage inequality across the board in lower 90–10, 50–10, as well as 90–50 wage ratios. These arguments are tested using data across 15–21 OECD countries (1970–2015).