Hostname: page-component-cd9895bd7-jn8rn Total loading time: 0 Render date: 2024-12-27T10:13:06.787Z Has data issue: false hasContentIssue false
  • English
  • Français

Politics and the Structural Dependence of the State in Democratic Capitalist Nations

Published online by Cambridge University Press:  02 September 2013

Duane Swank
Duane Swank*
Affiliation:
Marquette University
Get access Rights & Permissions [Opens in a new window]

Abstract

I explore empirically a central claim of the structural dependence thesis, namely, that capitalists' ability to disinvest fundamentally conditions policy choices in democratic capitalist systems. Utilizing time-series data for 16 affluent democracies from 1965 to 1984, I find that, indeed, low rates of business investment are associated with reductions in corporate tax burdens and that these reductions are more pronounced in periods of economic crisis. Moreover, low rates of capital formation engender cuts in personal income taxes during periods of economic stress. However, I also find that the magnitude of responsiveness of taxation to low rates of investment is relatively small and that analyses of the political context of investment and taxation indicate that governments have choices. The responsiveness of corporate tax burdens to capital formation may, under some governments, be part of a policy mix designed to maintain adequate investment and to address the demands of core constituencies.

Type
Research Article
Information
American Political Science Review , Volume 86 , Issue 1 , March 1992 , pp. 38 - 54
Copyright
Copyright © American Political Science Association 1992 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Block, Fred. 1977. “The Ruling Class Does Not Rule: Notes on the Marxist Theory of the State.” Socialist Revolution 33:6–28.Google Scholar
Bosworth, Barry P. 1984. Tax Incentives and Economic Growth. Washington: Brookings.Google Scholar
Bruno, Michael, and Sachs, Jeffrey D.. 1985. Economics of Worldwide Stagflation. Cambridge: Harvard University Press.10.4159/harvard.9780674493049Google Scholar
Cameron, David R. 1978. “The Expansion of the Public Economy: A Comparative Analysis.” American Political Science Review 78:1243–61.10.2307/1954537Google Scholar
Cameron, David R. 1985. “Does Government Cause Inflation? Taxes, Spending, and Deficits.” In The Politics of Inflation and Economic Stagnation, ed. Lindberg, Leon and Maier, Charles. Washington: Brookings.Google Scholar
Castles, Francis G. 1982. The Impact of Parties. Beverley Hills: Sage.Google Scholar
Chouraqui, J. C., and Montador, B.. 1985. “Fiscal Policy in Small OECD Countries since the Early Seventies.” Schwiez Zeitschrift für Volkswirlschaft und Statistik 3:259–83.Google Scholar
Edsall, Thomas Byrne. 1984. The New Politics of Inequality. New York: W. W. Norton.Google Scholar
Elkin, Stephen. 1985. “Pluralism in Its Place: State and Regime in Liberal Democracy.” In The Democratic State, ed. Benjamin, Roger and Elkin, Stephen. Lawrence: University Press of Kansas.Google Scholar
Esping-Anderson, Gosta. 1985. Politics Against Markets: The Social Democratic Road to Power. Princeton: Princeton University Press.Google Scholar
Fazzari, Steven M., and Mott, Tracy L.. 1986–1987. “The Investment Theories of Kalecki and Keynes: An Empirical Study of Firm Data, 1970–1982.” Journal of Post-Keynesian Economics 9:171–87.10.1080/01603477.1986.11489611Google Scholar
Feldstein, Martin, ed. 1987. The Effects of Taxation on Capital Accumulation. Chicago: University of Chicago Press.10.7208/chicago/9780226241784.001.0001Google Scholar
Freeman, John R. 1989. Democracy and Markets: The Politics of Mixed Economies. Ithaca: Cornell University Press.Google Scholar
Friedrich, Robert. 1982. “In Defense of Multiplicative Terms in Multiple Regression Equations.” American Journal of Political Science 26:797–833.10.2307/2110973Google Scholar
Hibbs, Douglas A. Jr., 1987a. The American Political Economy: Macroeconomics and Electoral Politics in the United States. Cambridge: Harvard University Press.10.4159/9780674038639Google Scholar
Hibbs, Douglas A. Jr., 1987b. The Political Economy of Industrial Democracies. Cambridge: Harvard University Press.10.4159/harvard.9780674494046Google Scholar
Hicks, Alex. 1988. “Social Democratic Corporatism and Economic Growth.” Journal of Politics 50:677–704.10.2307/2131463Google Scholar
Hicks, Alex, and Swank, Duane. 1984a. “Government Redistribution in Rich Capitalist Democracies.” Policy Studies Journal 13:265–86.10.1111/j.1541-0072.1984.tb00339.xGoogle Scholar
Hicks, Alex, and Swank, Duane. 1984b. “On the Political Economy of Welfare Expansion.” Comparative Political Studies 17:81–119.10.1177/0010414084017001003Google Scholar
Hicks, Alex, and Swank, Duane. 1990. “Politics, Institutions, and Social Welfare Spending in the Industrialized Democracies, 1960–1982.” Emory University and Marquette University. Typescript.Google Scholar
Jackman, Robert. 1986. “Elections and the Democratic Class Struggle.” World Politics 39:123–46.10.2307/2010301Google Scholar
Jacobs, David. 1988. “Corporate Taxation and Corporate Economic Power.” American Journal of Sociology 93:852–81.10.1086/228827Google Scholar
Johnston, John.. 1984. Econometric Methods. 3d ed. New York: McGraw Hill.Google Scholar
Judge, George et al. 1985. The Theory and Practice of Econometrics. 2d ed. New York: Wiley.Google Scholar
Katzenstein, Peter. 1985. Small States in World Markets. Ithaca: Cornell University Press.Google Scholar
Kiewiet, D. Roderick. 1985. “The Effects of Economic Issues on Voting for President, 1956–1980.” In Political Economy in Western Democracies, ed. Vig, Norman and Schier, Stephen. New York: Holmes & Meier.Google Scholar
Kmenta, Jan. 1971. Elements of Econometrics. New York: Macmillan.Google Scholar
Lange, Peter, and Garrett, Geoffrey. 1985. “The Politics of Growth.” Journal of Politics 47:792–827.10.2307/2131212Google Scholar
Lewis-Beck, Michael. 1986. “Comparative Economic Voting: Britain, France, Germany, and Italy.” American Journal of Political Science 30:315–46.10.2307/2111099Google Scholar
Lindblom, Charles. 1977. Politics and Markets. New York: Basic Books.Google Scholar
Mackie, Thomas T., and Rose, Richard. 1974. International Almanac of Electoral History. New York: Free Press.Google Scholar
Marsh, David. 1983. “Interest Group Activity and Structural Power: Lindblom's Politics and Markets.” In Capital and Politics in Western Europe, ed. Marsh, David. London: Frank Cass.Google Scholar
Miliband, Ralph. 1969. The State in Capitalist Society. New York: Basic Books.Google Scholar
Morrissey, Oliver, and Steinmo, Sven. 1987. “The Influence of Party Competition on Postwar United Kingdom Tax Rates.” Policy and Politics 15:195–206.10.1332/030557387782455254Google Scholar
Muller, Edward. 1989. “Distribution of Income in Advanced Capitalist States: Political Parties, Labor Unions, and the International Economy.” European Journal of Political Research 17:367–400.10.1111/j.1475-6765.1989.tb00200.xGoogle Scholar
Nordhaus, William. 1975. “The Political Business Cycle.” Review of Economic Studies 42:162–90.10.2307/2296528Google Scholar
Offe, Claus. 1984. Contradictions of the Welfare State. Ed. Keane, John. London: Hutchinson.Google Scholar
Page, Benjamin. 1983. Who Gets What from Government. Beverly Hills: Sage.10.1525/9780520315495Google Scholar
Pampel, Fred C., and Stryker, Robin. 1989. “State Context and Welfare Development in Advanced Industrial Democracies, 1959–1980.” University of Iowa. Typescript.Google Scholar
Pechman, Joseph A. 1988. World Tax Reform: A Progress Report. Washington: Brookings.Google Scholar
Pechman, Joseph A. 1990. “The Future of the Income Tax.” American Economic Review 80(1):1–20.Google Scholar
Poirier, D. J. 1978. “The Effect of the First Observation in Regression Models with First-order Autoregressive Disturbances.” Applied Statistics 27:67–68.10.2307/2346228Google Scholar
Przeworski, Adam. 1990. The State and the Economy under Capitalism. New York: Harwood Academic.Google Scholar
Przeworski, Adam, and Wallerstein, Michael. 1982. “Democratic Capitalism at the Crossroads.” Democracy 2:52–68.Google Scholar
Przeworski, Adam, and Wallerstein, Michael. 1988. “Structural Dependence of the State on Capital.” American Political Science Review 82:11–30.10.2307/1958056Google Scholar
Quinn, Dennis. 1988. “Investment Incentives: A Five-Country Test of the Lindblom Hypothesis.” Research in Corporate Social Performance and Policy 10:87–111.Google Scholar
Quinn, Dennis. 1989. “Corporate Taxation and Corporate Economic Power: Testing Class Power and Business Confidence Models.” American Journal of Sociology 94:1419–26.10.1086/229160Google Scholar
Quinn, Dennis, and Shapiro, Robert. 1990. “An Inquiry into the Forms and Mechanisms of Business Political Power: Explaining Business Taxation.” Georgetown University School of Business. Typescript.Google Scholar
Rose, Richard, and Karran, Terence. 1987. Taxation by Political Inertia. London: Allen & Unwin.Google Scholar
Rueschemeyer, Dietrich, and Evans, Peter. 1985. “The State and Economic Transformation: Toward an Analysis of the Conditions Underlying Effective Intervention.” In Bringing the State Back In, ed. Evans, Peter, Rueschemeyer, Dietrich, and Skocpol, Theda. Cambridge: Cambridge University Press.Google Scholar
Sahling, Leonard, and Akhtar, M. A.. 1984–1985. “What Is behind the Capital Spending Boom?” Federal Reserve Bank of New York Quarterly Review (Winter) 9:19–30.Google Scholar
Schwerin, Don S. 1984. “Historic Compromise and Pluralist Decline? Profits and Capital in the Nordic Countries.” In Order and Conflict in Contemporary Capitalism, ed. Goldthorpe, John. Oxford: Clarendon.Google Scholar
Stephens, John. 1979. The Transition from Capitalism to Socialism. London: Macmillan.10.1007/978-1-349-16171-3Google Scholar
Stimson, James. 1985. “Regression in Space and Time: A Statistical Essay.” American Journal of Political Science 29:914–47.10.2307/2111187Google Scholar
Stone, Clarence. 1980. “Systemic Power in Community Decision Making.” American Political Science Review 74:978–90.10.2307/1954317Google Scholar
Swank, Duane. 1988. “The Political Economy of Government Domestic Expenditure in the Affluent Democracies, 1960–1980.” American Journal of Political Science 32:1120–50.10.2307/2111203Google Scholar
Swank, Duane. 1989. “Politics and U.S. Fiscal Policy from Eisenhower to Reagan.” Marquette University. Typescript.Google Scholar
Tsai, Hui-liang. 1989. Energy Shocks and the World Economy: Adjustment Policies and Problems. New York: Praeger.Google Scholar
Tufte, Edward. 1978. The Political Control of the Economy. Princeton: Princeton University Press.10.1515/9780691219417Google Scholar
Vogel, David. 1983. “The Power of Business in America: A Reappraisal.” British Journal of Political Science 13:19–43.10.1017/S0007123400003124Google Scholar
Vogel, David. 1989. Fluctuating Fortunes. New York: Basic.Google Scholar
Wallerstein, Michael. 1988. “The Structural Dependence of the State on Internationally Mobile Capital.” University of California, Los Angeles. Typescript.Google Scholar
Ward, Hugh. 1987. “Structural Power: A Contradiction in Terms?” Political Studies 35:593–610.10.1111/j.1467-9248.1987.tb00207.xGoogle Scholar
Submit a response

Comments

No Comments have been published for this article.