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Abstract
Who decides within the firm still differs across advanced industrialized democracies. Will stakeholder and shareholder capitalism continue to coexist, or will economic integration cause convergence on the latter? I approach this question by investigating why governments supported different corporate governance systems in the past. For more than three decades, the European Commission has been trying in vain to harmonize company law across EU member states. Why did Germany, France and Britain always want different rules regardless of who was in power, and why did they all want "coherent" combinations of rules, favoring either stakeholders or shareholders on all relevant issues?
Most researchers take coherence for granted because they assume that the separate rules forming coherent models of capitalism are chosen by a single set of actors. They disagree only on whose interests systematically prevail and why. For power resource scholars, the identity of the dominant social bloc depends on the relative strengths of capital and labor. Varieties of Capitalism scholars view employers as structurally privileged everywhere. To test hypotheses on cleavages and winning coalitions derived from these perspectives, I map and examine the positions of German, French and British unions, employers and political parties on EU directives regarding takeovers and worker participation from 1970 to 2003.
I find that cleavages and winning coalitions vary across issues, partly because the transnational scope of regulation enters actors' preference formation calculus. Apart from deciding whether they are better or worse off if an EU directive applies in their own country, actors assess how it affects them that the same directive will apply abroad. This externality effect, which may be positive or negative, can influence alignment patterns: Where it pulls in the same direction as the direct distributional effect, class cleavages are reinforced. Where it pulls in the opposite direction, cross-class coalitions become more attractive.
My findings imply that the separate rules forming coherent corporate governance systems are less tightly coupled than is generally assumed. The clash of capitalisms in the European political arena may therefore produce neither deadlock nor knock-out of the stakeholder or shareholder model, but incoherent hybrids combining elements of both.
