The international competitiveness of the small European state in the 1980s : Denmark, Ireland, Sweden and Switzerland
This thesis tests the hypothesis that the degree of international competitiveness of the small European state in the 1980s resulted from its unique internal process of interaction derived from its industrial culture, developed from state priorities and societal values. Small European states, because of their position as international price takers, controlling relatively few product markets, were forced to rely on various forms of domestic intervention, such as monetary, labour market, and industrial policies, to stimulate international competitiveness. A systematised dialogue and communication process among internal economic actors due to geographic proximity and consequent actor familiarity was the small European state's competitive advantage necessary to compete for world markets against larger states possessing both natural and human resource advantages. The more systematised the internal interactive process was, however, the more flexible the internationally vulnerable small European state would be to respond to changing global political and economic conditions. In cases such as Sweden and Switzerland, the small European state was able to fashion this process of interaction into a system, where peak associations were able to communicate effectively to preserve a flexible industrial environment and where the principal actor maintained a key role in directing the national economy. The economic success of Sweden throughout the 1980s was facilitated by the trade unions, while in Switzerland the economy was guided by its financial institutions. Because of these principal actors, both states were highly independent, having developed oligopolised, high technology oriented industrial structures that featured powerful multinational corporations. However, during the 1980s, in small European states such as Denmark and Ireland, with weak industrial structures, high levels of international dependence on the European Community, and poor economic performances, confused consultation processes bred incoherent policy-making that resulted in low levels of international competitiveness. In both states, the State as the principal actor attempted to facilitate industrial adjustment, aspiring to modernise their relatively weak indigenous industrial structures. The thesis examines actor relations and policy-making in three functional areas: finance-industry relations and monetary policies; trade union-industry relations and supportive labour market policies; and state-industry relations and industrial policies. Given the myriad of policies that small state policy-makers employed during the 1980s, the thesis argues and illustrates that small European state interventionism was both state-specific and necessary because of the pressures of the world market.