Community Research and Development Information Service - CORDIS



Project ID: 25777
Funded under: FP6-MOBILITY
Country: Ireland

Final Activity Report Summary - POLGLOBALSERV (Political Responses to Economic Change: De-Industrialization, Globalization and Service Sector Development)

Our goal in this project was to examine how countries manage the transition to services, and to assess the economic and political sustainability of alternative service sector development strategies. To this end, our research contained three components. First, we analysed the institutional underpinnings of a range of alternative service sector development strategies pursued in different countries (within the advanced industrial democracy OECD grouping). That is, we analysed the ways in which national institutions (and in particular the institutions of wage and skill formation and the welfare state) impact on rates of employment creation and growth in different types of service sector (knowledge intensive, internationally marketed service sectors, with a high capacity for productivity growth, for example, or non-traded service sectors which rely more heavily on face-to-face interaction, and in which the capacity for productivity growth is lower); and on the distributional outcomes with which service expansion is associated (that is, rates of inequality, and the distribution of employment across workers of different types - men and women, for example, of workers at different skill levels).

We found that variations in the institutional configurations of Liberal and coordinated economic regimes have important implications for patterns of service sector development - in the rate of service sector expansion, in the types of service sector jobs which are created, and in the distributional correlates of that expansion. We also identified a set of links between service sector development strategies and countries' experiences of the current financial crisis. Second, we analysed the impact of service sector development on politics in different countries. Specifically, we investigated the ways in which changes in the composition of labour markets (specifically changes in the distribution of employment by gender and skill level, changes in patterns of inequality and hours worked) affect political preferences - that is, first, the levels of support for different kinds of social and economic policies (for example, redistribution, or public spending) and, second, electoral outcomes.

Finally, we assessed the implications of our findings for the sustainability of alternative service sector development strategies. Our contention here is that in order for an economic strategy to be successful it must be sustainable not just in economic, but also in political terms - that is, it must achieve good economic results, but - in order to survive - it must distribute the benefits of good economic performance in ways that will be supported by a politically winning coalition. We therefore examined the implications of some of the political outcomes identified in section two for the stability of the economic development strategies identified in the first section, and ultimately for the stability of the important socio-economic regime types (Liberal, social democratic, and Christian democratic). Our research has therefore involved the development of a set of models of the institutional underpinnings of alternative service sector development trajectories; and of the impact of alternative service sector development strategies for politics; the assembly of a dataset incorporating data on key political and economic institutions, and economic, political and distributional outcomes associated with service sector development in up to eighteen of the most economically developed OECD democracies over thirty-five years (from 1970 to 2005); and testing our models using multiple research methodologies - that is, statistical analysis of economic and political data and comparative case study analysis comparing the three principal "varieties of capitalism" observed with the advanced industrial democracy grouping (Liberal, social democratic, and Christian democratic), and countries representative of these models.


Philip LANE
Tel.: +353-1-6082259
Fax: +353-1-6083939
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