the disentanglement of interest politics

European Journal of Political Research37: 203–235, 2000.© 2000Kluwer Academic Publishers. Printed in the Netherlands.

203

The disentanglement of interest politics: Business associability,the parties and policy in Italy and Greece

ORAZIO LANZA1 & KOSTAS LAVDAS2

1University of Catania, Italy;2University of the West of England, UK

Abstract. The article explores changes in the politics of business associability in Italy andGreece, focusing in particular on a set of comparable domestic and European developmentsthat have played the roles of stimuli for the slow but unmistakable transformation of interestpolitics. Against a background of intense politicization, changes that are taking place sincethe 1980s suggest that organized interests become disentangled from the linkages which sus-tained party colonization and state dominance. Changes in interest politics were facilitatedby the transition to a majoritarian system (in Italy) and party alternation (in Greece). Thedisentanglement we refer to would be difficult under conditions of sharing-out government;conversely, alternating governments facilitate changes in the relationships between interests,parties and policy-making. Apart from the domestic sources of change, the article argues thatshifts in interest politics are the combined outcome of wider challenges and of the impactof Europeanization. On the basis of this analysis, we speculate that the disentanglement ofinterest politics may be conducive to national policy adjustment in two possible scenarios.Either by enabling intersectoral agreements over policy issues or by freeing national policy-making from the burden of oligopolistic coalitions – a social democratic and a neoliberalscenario respectively.

Introduction

Over the last twenty years or so, a good deal has been written about the‘partyness’ of interest politics in Italy and in Greece, the paramountcy ofparty-state relations in deciding the contents and the goals of policy, and thedependency of interest intermediation on a form of politics which is centredon the interactions of party machines and expansive state institutions. Ouraim here is to reconsider some of these linkages, and then to proceed to atentative exploration of more recent developments which, we suggest, mayindicate a relative autonomization of interest politics from party politics andfrom the influences which emanate from the links between party machinesand state structures.

Relations and boundaries between political parties and interest groupshave been areas of contestation in Southern European politics. Althoughthere is little published in terms of comparative studies of Southern Europeaninterest groups,1 the systems of interest intermediation in the Southern

204 ORAZIO LANZA & KOSTAS LAVDAS

European states have often been presented in the literature as being ex-cessively politicized and marked by clientelist politics and particularisticpractices. Especially the historical evolution of clientelist practices from theindividual (patron-client) to the collective level, involving party machinesand their control over the allocation of public resources, has strengthened theparties’ role and influence in policy (cf. Graziano 1973). An important aspectof politicization has been associated with the implications of party politicsfor functional interest representation and for the boundaries of parties andinterest groups. It has been argued that the weight of party politics has beenconsiderable, interest groups often being colonized by parties.2 In his seminalwork, in the early 1960s, LaPalombara (1964) attributed the ‘weakness ofthe Italian civil society’ largely to party interactions with and interferencein interest politics The literature on Greek politics confirmed this concernwith the ‘partyness’ of political processes and the dominant role of parties,3

although the earlier approaches underlined in particular the weight of thestate structures and of traditional clientelism. In this context, state dominationof interest politics was seen as a precondition for the later colonization ofinterests by established parties.4

In this paper we examine the interactions between interest politics andparty politics in the case of two Southern European business peak asso-ciations, Italy’s Confindustria (Italian General Confederation of Industry)and Greece’s SEV (Federation of Greek Industries). We discuss brieflythe evolution of relations between business associability and party politics,looking in particular at the impact of party government, the developmentof links with parties, interactions with state policies, the possibility of in-ternal factionalization of interests and the implications for inter-associationalrelations.

From the particular viewpoint of the present analysis, the main differencebetween the Italian and the Greek cases has been the existence, in Italy, ofa dominant party supported for a prolonged period by shifting coalitions,and, hence, of the possibility of intra-associational factionalization in somecases reproducing intra-party factionalization and inter-party balances.5 Eventaking into account this difference, however, there are similarities betweenConfindustria’s attempts to adjust to and interact with the transition to a ma-joritarian system, and SEV’s attempts to cope with a change in governmentthat indicated the need for the association to reconsider its linkages with thepreviously established political forces. Italy and Greece present a numberof significant similarities with regard to the politics of interest intermedi-ation, in general, and business interests in particular. The linkages betweeninterests, parties and the state have been conditioned by the extensive politi-cization of otherwise open economies, the roles of particularistic practices

THE DISENTANGLEMENT OF INTEREST POLITICS 205

and the concomitant difficulties for associational (membership) compliancewith agreements reached. In both countries, postwar interest intermediationhad been liberalized in its basic structural associational features and had littlein common with thesindicalismo verticalof the Iberian regimes. In bothcountries, the structures of interest intermediation, operating in parliamentarypolitical systems, proved persistent and resistant to change, even followingperiods of considerable discontinuities, such as the mid-1970s in Greece orthe early 1990s in Italy.

The Italian political system and organized business interests

The Italian political system is at present going through a period of changeinterpreted by many as the transition from a democratic regime of a con-sensual type to another democratic regime which appears to assume manymajoritarian characteristics.6 Irrespective of whether one agrees with the clas-sification of the Italian case (before the 1990s) as consensual in Lijphart’ssense, the transition from an electoral system of proportional representationto a majoritarian system has been crucial in facilitating the dramatic changesin the party system with the 1994 elections.7 The ongoing changes obviouslyaffect the role and position of organized interests. Until today, however, froma formal point of view at least, the system of interest intermediation hasnot experienced the problems which affected the party system. One of themost significant problems which the party system had to face has been thedisappearance or transformation of the established parties.

By contrast, the framework of interest groups has remained almost un-changed. From an organizational point of view, for example, Confindustriahas suffered marginal repercussions. Many business groups have been in-volved in political corruption episodes, but until now the major businessassociations operating in this sector have been able to survive and to continueplaying their role. Reorganizations and new associations are under study,particularly in the small and very small business sector, but actual transform-ations are slower. It may be predicted, however, that changes will occur inthe medium and long term. The relations between business associations andpolitical parties of the so-calledfirst republicwere overly entangled and it canbe easily supposed that sooner or later the upheavals which have shaken upthe party system will also affect the interest intermediation system, includingthose interest groups that represent businesses. Of these latter groups, themost affected will be those which had closer links with specific politicalparties.

We must note from the start that research on the changing relationsbetween organized business interests and the parties is limited. That is why


the empirical categories ofclientela e parenteladevised during the 1960s andreferring to the particular relations among interest groups, political partiesand public administration which had become typical of the Italian system,have been used even when they were no longer adequate to describe laterprocesses. More recently, some empirical research and attempts at theoreticalelaboration have provided more appropriate categories for the study of theItalian case in comparative perspective.8 Thus, the Italian case has been in-terpreted from various perspectives, with elements of pluralist fragmentationintermingled with consociational partyism and sharing-out government.9 Thepresence of other significant examples of interactions between representativeorganizations and the political-institutional system has also been established,that is, policy networks and oligopolistic10 and neocorporatist concertationattempts. On the whole, similarly to what has happened in countries likeFrance or Britain, the advocacy role of business associations has graduallyprevailed, and like other organized large interest groups, they have mainlyacted as lobbying groups, influencing ‘from outside’ political and institutionalprocesses and decisions. In a political system characterized by the presenceof the strongest Communist Party in the Western world by ideological polar-ization, political party fragmentation, difficulties in alternating governments,weak executives, and precarious and quarrelsome coalition governments, lob-bying groups have encouraged outcomes which in the long run resulted in amodel of sharing-out party government.

As we noted, in Italy isolated but significant attempts of neocorporatistconcertation have taken place (particularly from the end of the 1970s), but onthe whole industrial policy gradually changed into a kind of policy arena setup as an autonomous sector. Here, social, business and Unions’ clients, battle-trained and provided with remarkable financial and organizational resource,were able to ‘capture’ public regulation organs, and in order to particip-ate in the making and application of allocation policies, managed to build‘iron triangles’ among politicians, bureaucrats and interest representatives.The first attempts at neo-corporatist agreements were made in 1978–1979,through the so-called ‘EUR-turn’. In this period, the Unions were particu-larly involved in the concertation of public policies, but differently from whathappened in other European countries, the degree of institutionalization ofthese co-operative relations remained very limited.

On the whole, however, the business representation system in Italy is un-til today marked by a high degree of fragmentation. The system is in factdivided along multiple intersecting differentiations (sectoral, dimensional,political, and juridical-institutional) leading to considerable fragmentation.The most remarkable aspect is the coexistence of differentpeak associationsrepresenting often overlapping interests. There have been and still exist more


than ten confederations grouping firms according to the sector in which theyoperate, the size of business, the juridical-institutional nature (private, public,cooperative, local administration company, etc.), and political affiliation ofentrepreneurs.

In the last fifty years, among the divisions characterizing Italy’s interestintermediation system, the political-ideological division generated by the di-verse party affiliations of the associations involved is particularly relevant.These affiliations were crucial for facing up the tight, selective mechanismswhich have marked the access to policy making channels. From this view-point, the categoriesclientela e parenteladevised by LaPalombara are agood summary of the phenomenon. In other words, policy making arenaswere not open to all types of interests, but only to some of them. Amongall the associations related to a given political market (national, regional,local, sectoral or other) only some had a privileged access to policy makingchannels, the others were excluded. Selection and exclusion mechanisms didnot operate according to institutional logics but they depended upon the dis-cretion of individual civil servants, members of Parliament, town or districtcouncillors, undersecretaries of the alderman in charge. What was importantfor an interest group was its ability to establish a special and privileged bondwith a party, a sector in the public administration, a branch of the executive,a politician or a civil servant. In this way, institutions became permeable;otherwise they remained totally impenetrable.

The type of interest intermediation and access described thus far resultedin considerable dependence on the party system. In other words, without thesupport of party political and institutional actors, business associations wouldhave been weaker and less influential than they actually were. Important dif-ferences certainly existed between Confindustria and associations linked topolitical subcultures. But even the Confederation had to face such a system,and in the long run compensated its organizational weaknesses vis-à-vis theparties by gaining legitimation and other resources from the political system.

The politics of business associability

Throughout the period of the so-called first republic, the relation betweenConfindustria and political parties was marked by an early imbalance infavour of the parties. Those were the founders of the new regime, while Con-findustria was somehow linked to its authoritarian predecessor. Furthermore,the main political parties, the Christian Democrats„ the Communist Party andthe Socialist Party were in different ways the bearers of an anti-capitalistculture, whose referent social groups were the petty and middle bourgeoisieand employed workers, rather than the industrial bourgeoisie. After all, tra-ditionally, Italy was a predominantly agricultural country and its industrial


sector was a late developer, and was characterized by the prevalence of smallbusiness.

The Italian General Confederation of Industry (Confindustria) was foun-ded in April 1919 as the heir to an association (Italian Confederation ofIndustry), which was set up in 1910 but had not been able to spread beyondnarrow local limits.11 From the start, Confindustria enjoyed better fortunesthan its predecessor but the decisive impulse to the nationalization of repres-entative structures, and specifically Confindustria’s own institutionalization,was provided by the initiatives of the Fascist regime, in particular thoseconcerning its relations with the Unions. Within the corporatist organizationof the state Confindustria became for the first and last time in its history,the ‘representative’ of all Italian industries, irrespective of sector or firmsize: that goal was never to be reached again. Monopolized representationallowed Confindustria to represent all companies, although its members wereonly 60% of the total.12 On the whole, during the Fascist period, Confindus-tria reached sizeable proportions, and covered quite an extensive associativespace. After the fall of Fascism, the reconstruction of industrial representa-tion was faced with the fact that the authoritarian regime organization wasnot able to withstand the impact of the freedom of association: managers,artisans and landlords left Confindustria which they had been forced tojoin, and formed new autonomous associations (Confindustria was refoundedin September 1944, two months before the corporatist Unions system wasofficially abolished by decree).

The process of reconstruction was rather long and complex. We will focusonly on the main phases and the main associations (cf. Chiesi 1994: 197—80). The area where the fortunes of the industrial representation system wasdecided, and where the type of relations between groups ind the parties dom-inating the sector was designed, was that of small and very small businesses.These complained, rightly or wrongly, of having been weakly and badly rep-resented by a monopolistic association such as Confindustria, which appeareddominated by big business.

With the newly regained freedom of association, artisans withdraw fromthe tutorship of the large industrial association and started autonomous or-ganizations. This was a serious loss for Confindustria since a great deal ofrepresentation and coverage slipped from its hands. By the end of 1946, twonew interest organizations emerged within the artisan sector, Confartigianto(General Confederation of Italian Artisans) and CNA (National Confedera-tion of Artisans) (see Table 1). In both cases, however, the decisive impulsecame from the two parties which were to become the major mass parties, theChristian Democrats (DC) and the Communist Party (PCI). These were stillratherextraneousto Italian society and were eager to establish strong links


Table 1. Peak-level organization of business interests in Italy

Association Year founded Type and size of firms

Confindustria 1919 Large, medium and small

Confcooperative 1919 Cooperatives (DC)

Confartigianato 1946 Artisans (DC)

Conf. Naz. Artigianato 1946 Artisans (PCI, PSI)

Confapi 1947 Medium, small-vary small

Casa 1958 Artisans (DC, MSI)

Asap 1960 ENI public firms

Intersind 1960 IRI public firms

Associaz. generale coop. ital. 1962 Cooperatives (PSDI, PRI)

especially with independent middle classes: this was particularly true for theChristian Democrats. Thus, the formation of Confartigianato was patronizedby the Christian Democrats, while PCI and, to a lesser extent, the SocialistParty (PSI), supported the creation of CNA. Something similar happened inthe sector of Cooperatives, where post-war political and ideological divisionsconfirmed the pre-Fascist competing associations. The Confederation of Co-operatives was refounded in May 1945 under the auspices of Azione Cattolicaand the DC; shortly afterwards, Socialists and Communists revived the Legalof Cooperatives (see Manoukian 1968). In 1947 the Italian Confederation ofSmall and Medium Industry (Confapi) was set up. It was less influenced byparty politics, although its aim was to attract small businesses away from theConfindustria. But Confapi met with many difficulties in establishing itselfand being recognised. The whole process ended only in 1958–1960, whenan event destined to have deep and lasting effects within industrial relationsand in the relations between industry and political power occurred. In 1958,despite strong opposition from Confindustria, state-holding companies quitthe organization representing private employers, and in 1960 gave life to anew association, Intersind, which started to operate next to Confindustria asa representative of Italian industry.13 Intersind became colonized by the DC.

At the end of the 1950s, therefore, Confindustria had definitively lost itsbattle to be the sole representative of the whole industrial sector. Micro-businesses were firmly integrated in a circuit of public support and politicalprotection connected to the two prevailing political subcultures, the ChristianDemocrats and the Communists. Small and medium-sized enterprises (100to 500 employed) counted mainly on market activity and on a certain degreeof public support. Big businesses went their own way using both internal


and external hierarchical control mechanisms and direct access to decisionmaking centres. Meanwhile, the interests of entrepreneurs had undergonegreat differentiations due to the policy of the prevailing parties as well as theinternal dynamics of the rapid industrialization process. Such an increaseddifferentiation of interests intensified the problems of controlling diversitywithin associations. Confindustria suffered a further crisis, and one importantindicator of that crisis was the dramatical decrease in membership. By 1961Confindustria only represented one third of Italian firms, and less than half in-dustrial workers. In ten years Confederation membership diminished by 11%with respect to firms and up to 18% with respect to employed workers. Italianindustry had expanded rapidly, but Confindustria appeared to lag behind. Thedecline of the association continued throughout the 1960s, even if at a slowerpace. At the time of the industrial census of 1971, membership rate recordedfurther erosion of membership.

Even in industrial relations Confindustria had lost ground in terms of boththe general political climate and the evolution of negotiations. On the onehand, leadership in negotiations was assumed by Intersind; on the other, ne-gotiation became so decentralized to individual firm level that it seriouslyweakened the role of the confederal centre.

The political and associational decline of Confindustria continued to theearly 1970s. At this stage a new strategy was adopted to give new strengthto the organization and regain authority in the political and Unions spheres.To this aim, Confindustria had to turn to the ‘charismatic’ leadership ofGiovanni Agnelli (1974–1976). At least in part that strategy was successful.Confindustria was able to regain a prominent position in industrial businessrepresentation and was able to re-establish fruitful relations with the govern-ment parties. Nevertheless, its political role remained rather weak,14 weakereven than during the post-war period, and particularly at the centre, therestill persisted a serious lack of autonomous associative legitimacy. Indeed,on the inter-organizational front, the 1970s saw a further, significant fall inmembership, though with contradictory turns. On the one hand, there was forthe first time a renewal of membership among firms. But very small busi-nesses quit the Confederationen masse. In practice, industrial restructuringprocesses which took place in the 1970s, and in particular the decentralizationof production and the development of small enterprises in the ‘third Italy’, hadthe effect of a further weakening of Confindustria among smaller enterprises.

In short, a highly fragmented system of business representation emerged,and competition among the various confederations intensified, particularlyat local level. Competition takes place both among associations represent-ing firms within the same sector as well as among associations representingcontiguous sectors. For example, small enterprises are ‘contended’ by Con-


findustria, Confapi and artisan associations alike. Similarly, the so-calledadvanced tertiary sector, consisting of firms and professional offices offeringservices to firms, (advertising agencies, research centres, etc.), is the objectof ‘contention’ between Confindustria and Confcommercio.

It is, on the whole, a system of associations with a low level of organiza-tional development. The single associations making up this system are weaklyinstitutionalized and still have little autonomy in defining their strategies. Inorganizational terms, the crisis of the political regime in the early 1990s set inmotion a slower process of associational change. Associations grouping pub-lic enterprises (Asap and Intersind), which were previously closely linked tothe governing parties, now acquire various forms of linkage to Confindustriaas public enterprises are transformed into joint-stock companies.

Towards multiparty appeal

In analyzing the links between interest groups and parties it is useful to distin-guish between inter-organizational and political-electoral relations. Lookingat inter-organizational relations it must be said thatcolonizationof groupsby the parties was more widespread thanpenetration of parties by thegroups. Parties were founding members of many interest groups and main-tained through the years a considerable power of appointment within thegroups themselves. Furthermore, the prevailing parties had promoted theirown internal bureaucracy which proved scarcely permeable to the attemptsof penetration from the groups. Only in very few cases, can the developmentof currents and factions within party organizations be attributed to successfulattempts of penetration by the groups. The best known instance is certainlythe one related to CISL, the catholic union, that managed to promote a unioncurrent, ‘Forze nuove’, within the DC. In the case of entrepreneurs, stateowned industry was certainly more successful than private industry. The‘Base’ current within the DC has in fact always been considered as beingclosely connected to state owned industry. Indeed, one of the main supportersof ‘Base’ was Enrico Mattei, founder of ENI (Ente Nazionale Idrocarburi),the giant of Italian state industry.

Things are different when we turn to the electoral arena. In the latter analmost pure proportional system together with large constituencies proveduseful and not too costly even for party bureaucracies, to champion in-terest group managers. Thanks to the possibility for the electorate to expressmore than one voting preference, the opportunity of gaining direct access todecision making arenas, and particularly to the Parliament, became very con-crete for such candidates. Thus, many groups managed to organize their ownrepresentatives and their own lobbying activity within the legislative body– particularly when party gatekeeping, that is, the ability to control direct


access of groups to decision making centres (Morlino 1991), weakened, andthe sharing-out system became a widespread practice.

Confindustria could traditionally count on a certain degree of organiza-tional autonomy from parties. This allowed Confindustria to operate with amuch higher degree of political independence than its competitors and theUnions, which were conditioned by party patronage. In a number of casesit attempted its own direct access15 but with little success, and more thanonce expressed dissatisfaction with the party system, but on the whole it triedto be on good terms with the ideologically neighbouring parties. In a polit-ical system which had the strongest Communist party of the Western worldbut not a strong ‘conservative’ party, and with no perspectives of alternat-ing governments, Confindustria had little choice. This materialized in formswhich have been defined as anecessary alliancewith the DC, the everlast-ing governing party, andconsonancerelations with the PLI (Italian LiberalParty),16 a small but ideologically close party which particularly welcomedConfindustria candidates on its lists.

The necessary alliancewas expressed in the privileged support Confin-dustria offered to the DC, the party Italian industrialists recognised as theonly party which could guarantee government coalitions able to facilitate theestablishment of the democratic regime and, therefore, a market economy.Thus, Confindustria support was determined by necessity rather than persua-sion, given that industrial and Christian Democratic elites had always beenculturally and ideologically distant.

On more than one occasion Confindustria tried to condition the DC rightwing through supporting the electoral consolidation of the PLI, with which,as we noted, maintained a consonance relationship based on ideologicalaffinity, programme identity, mutually agreed initiatives and acceptance ofConfindustria elites within party electoral lists.

These types of relationships continued, despite oscillations, for a periodof thirty years. Then, with the first symptoms of crisis in the party system,Confindustria made several attempts at redefining its own role in the polit-ical system. We have already noted its neo-corporatist attempts. Regardingthe consonance relationship, this was progressively extended to include thePRI (Partito Repubblicano Italiano – Italian Republican Party), another smallparty granting a degree of similar views about the solutions for the economicand institutional problems of the country. Indeed,consonancebetween Con-findustria and the PRI matured during the 1980s and became even strongerafter 1990. After 1990 Confindustria decided to question its old alliances;there followed an independent but significantly convergent decision of thePRI to abandon the government coalition headed by the Christian DemocratGiulio Andreotti. Thus, at the general election of April 1992, the number of


industrialists running with the Republicans increased while it decreased inthe PLI electoral list.

By the end of the 1980s the anti-party protest of some internal componentsof Confindustria had grown (in particular from the ‘Young Entrepreneurs’,and small entrepreneurs of the north-eastern regions, who showed some sym-pathy to theLeghemovement), and the Communist threat was disappearing.As we will see, the fact that the end of the Cold War was combined withthe disintegration of the country’s party system meant that the impact ofinternationalization and Europeanization on interest politics would take newforms. The socalled first republic has been described as a ‘penetrated politicalsystem’ (Panebianco 1997), because of the significance of Cold-War real-ities and of the logic of bloc rivalry in the formation and operation of thecountry’s postwar political system. We saw that this logic became dominantalso in the area of interest intermediation and in structuring relations betweenassociations and the main parties.

After the late 1980s Confindustria sought to abandon its time-old, priv-ileged relationship with the DC. The latter was now increasingly consideredresponsible for the problems in the development of the Italian industrial sys-tem, for the lack of effective decision-making of the political system, and theexcessive growth of the public expense and tax burden. On many occasions,Confindustria expressed a political judgement about the DC adding that themisgovernment of the Catholic party and the PSI was the main cause for therise of Leghe. To the above parties Confindustria complained that the onlyanswer they could offer to the phenomenon of theLeghehad always been ahigher meridionalization of their leading bodies and/or their electorate (seeMattina 1993: 265–283).

The political election of 1992 thus became the occasion for the breakingof that necessary alliance which had after all permitted the industrialists tooperate in the economy of the country with profit, and had allowed the DCto gain substantial political and electoral advantages. On that occasion, Con-findustria replaced its privileged relationship with the DC with themultipartyappealto whomever agreed to support industrial proposals. In other words,Confindustria started to look around for political interlocutors interested ininstitutional reform and in improving the country’s economic structure, es-tablishing no privileged bonds with any party besides the above mentionedconsonant relationships. The multiparty appeal is a sign of a new politicalinitiative by Confindustria towards a highly relevant goal: the design of anew democratic regime allowing the business association to play a morerelevant political role. Thus, starting from 1992, Confindustria also tried toinfluence the debate on institutional reforms, maintaining the position of a


democracy based on a majority vote and an electoral system allowing forparty alternation and stable governments.

The elections of 1994 took place with a basically majoritarian electoralsystem, where only three political coalitions were competing.17 The winningcoalition was guided by a big name in the media, Berlusconi, who appealedfor support on the grounds of his being an industrialist, and also becausemany of the candidates of the party he founded were industrialists as well,especially medium and small – and in several instances they were youngindustrialists. Many small entrepreneurs were also candidates within the listof Lega Nord, a party which was an ally of Berlusconi in the electoral com-petition. The results are well known: a near disappearance of the traditionalallies of Confindustria (DC, PLI, PRI), and direct access to Parliament ofmany entrepreneurs mainly elected through the parties of Berlusconi and theLega (see Lanza 1995).

Faced with the opportunity of trying out new electoral strategies on thiselectoral occasion, Confindustria expressed diverging positions. The leadingbody of the Confederation and particularly the Executive board expressed anequidistant position between the three coalitions, but on the whole, duringthe electoral campaign of March 1994, industrialists gave an impression ofbeing unusually quarrelsome. This found its major expression in the contrastbetween Berlusconi and the Confindustria leadership, as well as between thelatter and the smaller industrialists. The fact which provoked such contrastswas the equidistant position assumed by the Confederal Giunta (Executiveboard), as noted above. As a matter of fact, the preferences of the Confindus-tria leaders, at least until the beginning of 1994, were in favour of the ‘PattoSegni’ (Segni Pact), whose leader, a former DC politician, was in the forefrontas a reformer of the institutions. However, during the electoral campaign,formal equidistance prevailed. The view of the Confindustria leadership wasthat, following the transition period, interest groups could also come out ofthe party affiliation stage, and be able to relate with governments and op-position only on grounds of policy contents. But Forza Italia, Berlusconi’sparty, which expected to be the natural home of Confindustria’s support, feltpolitically betrayed by this equidistant position (see Mattina 1994).

At the grass roots level, however, among the members of Confindustria,there was a certain activism in favour of Berlusconi, but with no directinvolvement of the Confederation itself. Afterwards, in the wake of thefavourable electoral results obtained by Berlusconi’s coalition (Il Polo), ten-sions emerged among the Confindustria leadership, small industrialists andyoung entrepreneurs. The multiparty appeal of the association, coupled witha degree of multiparty dispersion of the vote of its members, was confirmedin the elections of 1996. At the same time, the industrialists’ direct access


to parliament after 1996 has beer weaker than in 1994.18 The same tendencytowards multiparty appeal and increased autonomy from party politics, can begauged from the election of Luigi Fossa as Confindustria president in 1996.Unlike his immediate predecessor, Luigi Abete, Fossa did not register anyparticular party influence (Abete was close to the DC). Like his immediatepredecessor, however, Fossa belongs to the small entrepreneur wing in theconfederation.

The Greek political system and organized business interests

From the perspective of Lijphart’s distinction between consensual and ma-joritarian types of democratic government, post-1974 Greece would clearlyrepresent a majoritarian case. To account for the changing position of organ-ized business interests in the political system, however, we need to examinethe interactions between the development of interest intermediation, thepolicy-making patterns and the features of party and the wider political sys-tem. The Greek patterns of interest intermediation and policy-making havebeen characterized by adisjointed corporatism(Lavdas 1997), whose frag-mented and asymmetric functioning constrained the liberal elements in theeconomic system while at the same time making it difficult to broker socialpacts and intersectoral agreements beyond wage negotiation. While inher-ited state corporatist elements have occasionally been present at the sectorallevel,19 we will see that the prevailing institutional culture at system levelcannot be characterized as state corporatist. In fact, sectoral state corporat-ism has been stronger in sectors (such as shipping) in which business powervis-à-vis the state has been more pronounced.

But when we look at the systemic level, we realize that various plur-alist elements evolved in Greek interest in intermediation after the 1940sand, despite an interruption in 1967–1974, were strengthened since the mid-1970s. Some of these concern the existence of associational activity whichevolved in relative autonomy from state domination and party colonization.As we will see, the organization of business interests evolved in such a way.Other elements characterize the structures of interest intermediation and theforms of associational linkages. Crucially, in contrast with developments inthe Iberian world, in which the syndicalist tradition was reinforced by thestate, Greek modernizing liberals broke with the syndicalist mode of interestorganization at an early stage. Law 281/1914 prohibited the existence of syn-dicates combining labour and management in a single organisation. Whilein the Iberian cases state corporatism was the established system of interestintermediation for a prolonged period, regime discontinuities in Greece res-ulted in a complex amalgam of sectoral interest intermediation patterns and


the gradual emergence of a disjointed corporatist culture prevailing at systemlevel, gradually transformed since the mid-1970s and particularly after 1990with the introduction of various liberalizing measures.20

At the same time, the difficulty to engage in collective decision-makingand social pacts beyond wage negotiation throughout the 1970s and the 1980sindicates that the existence of interest confederations does not suffice for con-certatist policy-making. The difficulties in achieving concertation in policyhave been linked in a reciprocal manner to the prevailing confrontationalstyle at the political party level. The two civil wars of this century and thelack of a culture of elite accommodation and of conciliatory party leader-ships deprived Greek political development of a critical background factorfor the consolidation of long-term societal corporatist arrangements capableof negotiating social pacts.21 On the other hand, in contrast to Italy, the lackof a dominant party with strong internal factions weakened the possibility ofextensive factionalization developing within business associations and, giventhat the processes of regime change in the mid-1970s did not disturb thestructures of interest intermediation, the new democratic regime inheritedbusiness associations that had variable influence over policy but were notprone to extensive internal factionalization. By contrast, trade unions sufferedfrom political factionalization which was particularly strong within the tradeunion confederation (GSEE). The state dependency of the trade unions andthe internal factionalization along party lines of the peak confederations oftenled analysts into more general conclusions on associability.22 In fact, the pat-terns of development of the organization of business interests have allowed adegree of autonomy from party influences and state control.

The politics of business associability

The emergence of bourgeois interest politics in Greece took place in twowaves. First in the 1860s–1880s, with the political emergence of commercialand industrial groups in a context marked by the dominance of a liberal mod-ernizing party and the establishment of adult male suffrage and parliamentaryrule. The second wave came in the first decade of the 20th century. Whilethe first wave was characterized by the predominance of political forms ofliberalism and an attempt to introduce liberal reforms often in the absence ofa robust liberal social basis, the second wave was associated with the gradualstrengthening of commercial and, at a later stage, of industrial capital.

The Federation of Greek Industrialists (SEV) was established in 1907 in acontext that was characterized by the emergence of a number of civil group-ings, societies and voluntarist associations (see Vaxevanoglou 1994; Lavdas1997).23 Business interests more generally were first articulated with the me-diation of state intervention in chambers. The first chambers of commerce


Table 2. Peak-level organization of business interests in Greece

Association Year founded Type and size of firms

SEV 1907 Large, medium, small-very small

EEE 1916 Shipping firms

GSEVE 1919 Artisans

EET 1928 Banking interests

EE 1946 Artisans, handicrafts

SSESE 1961 Commercial interests

EESE (in place of SSESE) 1987 Commercial interests

GSEVEE (in place of GSEVE) 1988 Artisans

and industry were established by the state in 1836. But when the further legalcodification of chambers came in the 1910s, the distinction between chambersand associations had become clear through the emergence and evolution ofthe independent associations of industrialists and merchants (see Table 2).It became part of these associations’ ideology often to exaggerate both theirindependence from and influence over state agencies. The SEV changed itsname to Federation of Greek Industries in 1979, in belated recognition ofthe gradual change of its membership basis, which originally included as-sociations, firms and individuals. Unlike pure peak associations like Italy’sConfindustria or Austria’s BWK, the SEV (like the British CBI) remains amixed association with both associations and firms (but not individuals) asmembers (cf. Coleman & Grant 1988).

The need for protection of industry was a constant theme of the SEV sinceits establishment in 1907, but the lack of a consistent policy of protectionismand the prevalence of patchyad hocarrangements reflected and also rein-forced the Federation’s weak authority over its members, which often foundthat particularistic practices and individual firm lobbying were more effective.Throughout the SEV’s history, its governing bodies have been dominated by(comparatively) large firms in machine tools and machinery, cement and con-struction, chemicals, textiles, electrical equipment. In an economy dominatedby small business, this constrained the capacity of the SEV to claim represent-ation of industry as a whole. Yet as the most prestigious business association,the SEV has been able to manipulate issues in increasing its salience forother business groups. Such stimuli have been the governments’ policies onindustry, especially post-1974, and the phases in the process of European-ization. The impact of the latter, apart from the increased openness of theGreek economy, can be examined in organizational terms as the Federation’s


attempt to enhance its position in policy-making and policy implementationwhile increasing its authority over its members and prospective members. It isprobably correct to argue that the Association Agreement with and eventualmembership of the EC (1962 and 1981 respectively) did at least as muchin terms of modernization of business interests intermediation as it did interms of industrial structures modernization through tariff disarmament, thegradual extension of European regulatory policies and legal harmonization.The European issue provided powerful stimuli for business interests bothas concerns lobbying and with regard to broader publicity endeavours (seeLavdas 1997).

In structural terms, the Federation’s dual character as an employers’ and atrade association increased its salience for business. Part of the Federation’sauthority is derived from the collective agreements on wages it signs withthe GSEE. State-sanctioned collective bargaining for wages became the rulein the 1950s and 1960s, based on a 1955 law. The system has been changinggradually since 1974, with a number of new elements beginning to take shaperegarding the level of bargaining and its scope. Especially following Law1876/1990 the system moved decisively in the direction of free collective bar-gaining with voluntary dispute settlement24 practices. Although the system isin transition, the first indications are that both the SEV and the GSEE areadapting well. In 1991 they signed the first-ever two-year wage agreement,which also covered a number of institutional issues beyond pay.

In a politicized economy with an extensive public sector, the impact ofclientelism and particularistic practices in credit allocation, subsidies andpublic procurement have often undermined the SEV’s role.25 In such areas,government-business relations faced a new policy environment after theregime change in 1974.26 At the same time, close relationships between gov-ernment and business interests did not result in a formal pattern of businessinclusion in a system of state corporatism.27 Elements of state corporatismhave marked interest intermediation and policy-making at thesectorallevel,associated with traditions of compulsory unions and repressive state practicesaiming to assist, not discipline or direct, business interests in a given sector.State corporatist characteristics have been present in sectors in which businesspower has been considerable.28

That close relations between business and the government have not ac-quired the formal characteristics of corporatist inclusion can be seen invarious areas. Despite its critical role, the area of public procurement hasresisted the development of corporatist institutions. In what was an indicationboth of the Federation’s domination by big firms and of the pluralist elementsin state-business relations, the SEV was careful to negotiate the form of insti-tutionalized cooperation with the state in the area. The Federation’s power to


nominate members to public bodies and government committees became anissue in this regard. In 1962, the conservative (ERE) government, followingintense SEV lobbying, decided to revitalise the state’s Committee on PublicProcurement but insisted on fixed membership, including the president andvicepresident of the Federation. The SEV made its participation conditionalupon its power to choose the members to be nominated to the sessions ofthe state procurement committee, and appealed to the Council of State on thecomposition of the committee. Council of State ruling 682/1963 acceptedthe Federation’s view that its freedom of representation was curtailed bythe government’s decision on the composition of the committee, and thatthe government’s plans constituted indirect governmental interference in theassociation. On the one hand, the SEV’s position was in line with the pref-erences of most large firms, which wished the association to remain in thebackground and designate its representation on the basis of informalad hocagreements among firms. On the other hand, the SEV’s position reflected alsothe pluralist line within the Federation, which has insisted that any advancedformal relationship between itself and the state would be detrimental to theassociation’s independence and image.29

While the SEV did retain a degree of independent involvement in policy(in contrast to the incorporation assumed by state corporatist analyses), its in-fluence over its membership has suffered partly as a result of its own historicaldevelopment and partly as a consequence of the prevailing practices of statebureaucracy. Such weaknesses were more pronounced at the regional level.Greek industrial interests have been organized at the national, local, regionaland sectoral levels. Most sectoral industrial associations are SEV members:45 are members out of a total of 75 associations.

By contrast, less than half of the regional associations are SEV members.To schematize, the emergence of national, regional and local organizationscame more as a response to political problems, including especially inter-actions with the developing labour movement and relations with the state,while sectoral organizations developed mainly in response to intra-industrydivisions and transformations. The persistent significance of regional associ-ations and the degree of autonomy of some of them is linked to a combinationof historical and institutional factors. The historical dimension of the phe-nomenon results in a situation resembling what Coleman and Jacek call‘market reinforcing’ role of associations vis-à-vis a political-economic con-figuration of ‘centralized state-balkanized markets’ (Coleman & Jacek 1989:7–9). A degree of ‘market balkanization’ resulted from the gradualism of thehistorical territorial formation of the modern Greek state after the 1820s. Newregions often retained for decades a degree of market segmentation or (as inthe case of the Greek part of the geographical territory of Macedonia) cer-


tain particular trade linkages. Facing a centralized administrative apparatus,business interests in such regions often opted to retain autonomy from theAthens-based national associations.

Party alternation, business adjustment and policy shifts

The relatively secure position of the SEV as a leading business interest organ-ization in the 1950s and the 1960s and its ability to enjoy privileged relationswith the parties in power (Moussis 1969: 31) concealed its weaknesses inorganizational coherence and coverage. These weaknesses were exposed afterthe regime change in 1974, when processes of democratization pushed labourcosts up while organized business interests faced a hostile political envir-onment and a drop in public support and legitimacy, owing to perceivedidentification with the authoritarian regime.30

In the 1950s the SEV enjoyed cordial relations with the governing conser-vative parties, first the Greek Rally of Field Marshal Papagos and, from 1956,the ERE of K. Karamanlis. Things became more complicated with the forma-tion in 1961 of the Centre Union as a liberal alternative. In political terms, the1958 elections in which the left (EDA) achieved second place with 24%, hadunderlined the ERE’s significance for business interests, while at the sametime indicating that the articulation of a bourgeois electoral alternative wasbecoming necessary. In economic terms, the limited Keynesianism of theCentre Union and its attempts to expand the domestic market found strongsupporters among the industrial elites, particularly those whose productionwas geared to the needs of the domestic consumer-goods market. Thereforethe cordial relations between the SEV as an organisation and the govern-ment did not change when the ERE was succeeded by the Centre Unionfor a brief period in 1963–1965. The Centre Union government sought toassuage the fears of domestic industry that the Association Agreement withthe EEC (1962) and the whole tenor of policy were linked to a strategy ofattracting foreign investment as a prime goal. The years of the Centre Uniongovernment saw the emergence of the first significant intra-SEV politicaldivisions as the government appeared to favour the more inward-lookingbusiness groups and took measures that tended to confirm the closed nationalcharacter of procurement practices.

The military coup of 1967, apparently aiming to block the possibility ofa centre-left governing coalition, changed the parameters of government-business relations. As a result of the coup, the confrontation between thepolitical and military establishment (which had defeated the Communist-led bloc in the civil war of the 1940s) and the left was maintained and thepossibility for a coalitional development was excluded. An examination ofthe role and position of business interests in the developments which led to


the authoritarian regime in 1967 would be beyond the scope of this paper.31

Still, we should note that the SEV was often at odds with the regime asthe policy of generous but politically highly selective allocation of grantsand subsidies followed by the latter exacerbated intra-business conflicts. Inaddition, the authoritarian regime’s close relations with the Shipowners’ Fed-eration (EEE) and the EEE’s imperial behaviour in this period were seen bythe SEV leadership as endangering areas of its domain of representation.

The complex challenges which the SEV faced in the post-authoritarian erawere defined by three parameters: the exigencies of the process of democratictransition; the challenge presented by the socialist (PASOK) government in1981–1989; and the challenge of full EC membership since 1981. Unlike theEEE, for which the regime change brought about the collapse of the pro-juntaleadership group under Andreades and the advent of a new leadership withlinks to the diaspora Greek shipping capital, no significant internal changestook place in 1974 in the SEV. But the impact of regime change on the Feder-ation’s environment was profound. Apart from its political implications, theregime change meant that a number of factors and parameters influencing theoperation of Greek political economy were changing32 Rising labour costs,the opening of negotiations for full EC membership and the first oil shockbecame issues that dominated the agenda of exchanges between the SEVand post-authoritarian governments. The shift to liberalism of the main con-servative party, Karamanlis’s New Democracy, helped reestablish the right’srapport with organized business at a new level, but the ND governments’efforts to build coalitions that would facilitate democratic consolidation whilestrengthening the party’s grip over the public sector resulted in scuffles withbusiness associations. The SEV was under pressure by industrial interestswith stakes in the Andreades banking, shipping and industrial group, whichwas nationalized by the government, to adopt a hard line, but the internalbalances in the association remained in favour of good relations with theND and concentrated on demands for a pro-active role for the Federationin policy-making.

Government-business relations were above all determined by PASOK be-ing in power in the first years of EC membership. A party that representeda challenge for business was in office the years when government-businessinteraction was bound to be intense. The tensions and the difficulties ingovernment-business relations in the 1980s should be interpreted as symp-toms of the adjustment to a change in government in a political system inwhich business interests had learned, albeit not without difficulties, to workwith the established political forces of the right. The PASOK government in1981 provoked internal shifts in the Federation’s leading organs, as the newleadership team taking over a year later had to come to terms with a govern-


ment using exceedingly acerbic anti-business rhetoric. The margin of PASOKvictory in 1981 was seen as alarming due to the party’s strong electoralmandate and the absence of formed political or policy coalitions that couldcontain the new government. PASOK sympathizers in the SEV GoverningCouncil and Administrative Committee were rare in the early 1980s, and theFederation strove to balance different tactical views on how best to handlethe new government. The PASOK phenomenon has been approached withthe elusive concept of populism,33 aiming to capture the defining featuresboth of the rapid course of electoral success between 1974 and 1981 and ofpolicy performance. In policy terms, the ruthless ‘catch-allism’ of PASOKwas translated to expansionary policies and attempts to stimulate domesticdemand which, unlike the Mitterrand policies in France, were slow to change.

The SEV was put under pressure from the PASOK government on variousfronts. First, ambitious government plans for nationalizations, later aban-doned, caused some anxiety in business circles. Second, the socialists’emphasis on the role of public enterprises as policy instruments often collidedwith business on issues ranging from pricing to the perceived crowding outof private investment in selected areas. Last but not least, an industrial policywith a sectoral orientation meant that SEV leaders from traditional sectorssuch as cement, textiles and chemicals, would not benefit from the targeting ofactivities for support, especially as PASOK policy often appeareddoctrinaireand oblivious of comparative advantages and past performance.

The confrontation between the SEV and the PASOK government reachedits peak in 1984, with the establishment by the SEV and several other associ-ations of a business front (ESIP), allegedly modelled on the FrenchPatronatbut really as a way of putting increased pressure on the government (SEV,Bulletin 461, June 1984: 1; cf.Bulletin 466, January 1985: 8). While manyobservers saw in the ESIP the extension of SEV influence, the front acquiredmore complex functions. Those in the SEV leadership who wished to avoidthe implications of SEV-PASOK confrontation for the Federation sought toneutralize the factors that might lead to intra-SEV factionalization by estab-lishing an external body that would take the brunt of the ‘warfare’. At thesame time, the front was supported by businesses and politicians linked tothe main opposition conservative party (ND) and was soon taken over by aleadership team that made no secret of its intention to antagonize the SEV inits efforts to coordinate the political activities of the private sector.

By mid-1985 it appeared as if the efforts to avoid an intra-SEV split hadled to an attempted institutionalization of a divide between the SEV andthe ESIP. The policy line adopted by the second PASOK government in theautumn of 1985 was instrumental in deciding the development of businessinterest politics. Declining profit rates combined with soaring public deficits


and the acceptance of the Single European Act all served to strengthen theposition of those in the government who advocated a stabilization programmeand government-businessrapprochement. The adoption of a stabilization pro-gramme in 1985–1987 sealed the fate of the ESIP, which became increasinglyirrelevant while the SEV leadership was seen as the official representationof business interests in terms of the necessary two-way interaction structure(interests articulation and members compliance).

The governments engaged in limited concertatist schemes in 1985–1987and in 1989, and the Federation was emphatically promoted in policy imple-mentation. The late 1980s and early 1990s saw a strengthening of the SEVin terms of membership and coverage. But the organizational strengtheningwent hand-in-hand with greater detachment from the everyday politics ofgovernment-business relations. There were two reasons for this. First, theFederation was anxious to avoid endangering its recently enhanced institu-tional position and role. At the same time, second, various intra-businessdivisions associated with shifts and greater openness in public procurementand the requirements of European competition policy made it increasinglydifficult for the Federation to pursue a clear line on a number of policyissues in the early 1990s. In particular, under the short-lived New Demo-cracy government, which appeared eager to promote a policy of sequentialprivatizations, the SEV had to ensure that tensions and disagreements at thelevel of its membership did not disturb its institutional role. When the NDgovernment collapsed in parliament (as a result of a splinter group formingPolitical Spring, a right-wing party with a nationalist agenda and a much morereserved approach to economic liberalization) and was subsequently defeatedin national elections, the new PASOK government proved more sensitive tothe repercussions of regulatory change for intra-business divisions (see Lav-das 1996, 1997). Along with other business associations, the SEV acceptedthe possibility of working with a number of different governments and sawthe return of the socialists to power in 1993 in a way that was unmistakablydifferent to its approach to the first PASOK electoral victory in 1981.

On balance, it could be argued that the PASOK years strengthened theSEV. The real threat of internal divisions was largely overcome with thedecision to create the ESIP, and the attempts by the latter to acquire an in-dependent existence were later blocked by both SEV and the government.Limitations of space do not permit a detailed examination of the impactof European policy development on parties-interests relations in the 1980s–1990s and on the conditions that enhance or constrain SEV’s role. Policiessuch as privatization or European regulatory control of national policy instru-ments result in business fragmentation and business participation in differentpolicy-promoting or policy-opposing coalitions. Redistributive policies, on


the other hand, such as European structural policies, tend to enhance theSEV’s position as a policy mediator (see Lavdas 1997).

Tentative conclusions about parties, interests and policy change

There have been three major sources of change in Italian and Greek interestpolitics in the past few decades. There are two domestic sources, one for eachof the two national cases, and there is also a third one, which is commonto both of them. For Italy, the domestic change of the early 1990s was apolitical juncture. A model of democracy, a party system, and, accordingly,a type of relations between interests and parties have been changing. Thedisentanglement we refer to in this paper would be difficult under conditionsof sharing-out government. Conversely, alternating governments facilitate adegree of distancing on the part of organized interests. At present, Confin-dustria is attempting to redefine its role, and to contribute to an institutionalconfiguration in which it can claim a more relevant policy position. Withinthe organization there is a certain agreement about the desired type of polit-ical system, whereas positions diverge with regard to the attitude towardsindividual party lines.

In general, due to the drastic changes in the power of political parties,it is reasonable to expect that important changes in the relations betweenorganized interests and governmental institutions will take place in the future.This could reduce some of the peculiarities of the Italian model of pluralisticfragmentation and sharing-out government. The majoritarian turn, in partic-ular, encourages a certain detachment from previously dominant linkages intwo ways. It is no longer easily feasible for partisan interests to mobilize afew thousand voters for a particular candidate on a friendly party list andensure the election of ‘their’ representative. At the same time, the possibilityof party alternation in government makes it necessary for interests to main-tain a distance as well as to cultivate good relations with more parties. Ifreformers succeed in their efforts (alternate governments, a clear distinctionbetween the role of the government and that of the opposition, reduction ofparty fragmentation, a decision-making process less dependent on fragmen-ted lobbying, more consistent and efficient government performance), the roleof interest intermediation structures – including that of Confindustria – willchange as well.

For Greece, to suggest that the major turning point in recent politicalhistory was the regime transition in 1974 would be to reiterate the obvi-ous. But although the overall significance of the regime change cannot andshould not be relativized, from our perspective here the impact on interestintermediation has not been critical. One reason for that was the fact that


the authoritarian regime was short-lived (1967–1974). Also, the structuralimpact on the organization of interests has been minimal. In fact, the analysisof interests-parties-state relations has been constrained by the reading of theGreek case from the perspective of state corporatism. The latter perspectiverenders the Greek case opaque and often incomprehensible. Of course, thecapacity of the SEV at any given period to achieve results depends on avariety of factors, but such factors are not unlike the ones we need to examinein order to account for policy developments in a variety of national settings:the type of policy area, the extent of influence over agenda setting, the or-ganization’s own resources, the historical formation of government-businessrelations. The latter is crucial when designing comparative analyses. Beforeembarking on comparisons we need to ensure that we are confident about thehistorical accuracy of our analyses and our concepts.34

The neglect of the historical perspective in the formation of government-business relations can be especially damaging in an analysis of the Greekcase which, unlike the Iberian cases, combines the experience of post-1974democratization with stronger elements of discontinuity in twentieth centuryhistory, an early point of rupture with syndicalism and a tradition of early(from the 1860s) adult male suffrage and parliamentarism. In the yearsbeforethe coup of 1967 associations gained various and asymmetric positions in thepolitical system and became accustomed to using certain channels, networksand veto points. Such historical experiences become significant in the newpolitical system mainly in two ways. They leave behind institutional poweracquisitions, and they also help shape an association’s ideology. By 1967, theSEV had acquired various influential resources in the Greek political system,and its ideology was one of relative autonomy from the state and the parties.

In fact, for Greece, the major source of change in business interest politicshas been the political change of the early 1980s, centred on the governingparty alternation and involving transformations also in the politics of the rightand a particular form of negotiating policy shifts. As we argued, the yearsafter 1981 (when PASOK formed its first government) witnessed efforts bythe SEV to increase its authority while distancing itself from particular partylines. The change in relations between party politics, business associabilityand policy-making is a continuing process. In the late 1990s, although clearlydemonstrating remarkable continuities in comparison with the Italian caseof dramatic change, the Greek party system cannot be considered stable orin equilibrium. In this context, it is particularly interesting to observe theinteractions between interest politics and the developments which facilitateor constrain potential splinter groups in both the main parties. The gradualliberalization of the collective bargaining system in the 1990s, influenced by


regulatory change and Europeanization, will be a further important challengefor the Federation.

With this we turn to the third major source of change, a source that iscommon to both cases. A host of shifts and transformations is now commonlyapproached with the concept of Europeanization.35 As concerns interest polit-ics, Europeanization has a number of aspects. Perhaps the most obviousdevelopment in this context concerns the Europeanization of organized in-terests strategies: the fact that interests increasingly turn to Brussels-levellobbying, the evolving significance of transnational linkages, the domesticconditions which enable or constrain such strategies. But there are other as-pects as well, some of which are crucial even if perhaps less conspicuous.They relate to Europeanpolicy impactand the roles of European policies andinstitutions as mediating variables or as catalysts for development in areassuch as regulatory change, changes in the state’s role and presence in theeconomy and the introduction of new forms of public involvement in lib-eralized economic processes (e.g., regulatory agencies, national competitionauthorities, increased autonomy of central banks) (see Lavdas & Mendrinou,1999). Most of the shifts in public-private boundaries and the transformationof relations are the combined outcome of domestic conditions and wider chal-lenges, economic problems and policy adjustments, that need to be placed inthe European Union context in general and the EMU context in particular.36

Accordingly, these aspects involve processes of relative policy convergence.This implies convergence in policy contents and goals, but may also extendto policy instruments and policy styles. Still other aspects refer to citizenship,the operation of democracy and the links between organized interests anddecision-making processes at the national and the European levels.

In Greece, as we suggested in the previous section, the links between statepolicy and intra-business divisions are conditioned by and interact with theprocess of Europeanization. In Italy, the combination of the end of the ColdWar and the meltdown of the country’s party system meant that the impactof internationalization and Europeanization on interest politics would takenew forms. At a time when Italian business interests were facing new chal-lenges from international competition, the familiar ties between the economicelites and the political system were breaking. Pressures for economic reformgrew after the late 1980s and those forces that resisted the restructuring ofItalian capitalism (mainly the economic Old Guard around the Mediobancagroup) sought to identify new interlocutors in Rome as the established partysystem disintegrated. If we focus on the path followed by restructuring andliberalization programmes we will conclude that the Old Guard suffered a set-back but remained powerful. Even the Berlusconi government in 1994, withits ‘popular capitalism’ rhetoric, failed to implement the professed British-


style privatization programme favouring small investors (Friedman 1996:269; Lavdas 1996: 241). Developments since 1995 indicate that the fall ofBerlusconi and the efforts to arrive at a bipolar system are reflected in intra-business divisions. It is plain that the centre-left government coalition underProfessor Romano Prodi enjoyed the support of reform-minded businessleaders.

There has been speculation that the new forms of politics reinforce frag-mentation and favour particularistic linkages between social interests andpolitical parties (see, e.g., the interesting points made by Sapelli 1995: 196–198). But available evidence thus far suggests that the efforts to reform theparty system led to the emergence of ‘electoral cartels’ (see the contribu-tions in D’Alimonte 1998) and thetendency, which we investigate in thispaper, towards a redefinition of relationships between parties and interests.This tendency was strengthened by the influences of Europeanization andcompetition in a globalized economy.

We could put a question mark next to the title of this paper. Can thedomestic and international processes which influence Greek and Italian in-terest politics since the 1980s be seen as representing the disentanglement ofinterest politics from the interrelationships which sustained party and statedomination? And if that has indeed been the case, does the disentanglementwe refer to signify a return to the model, familiar from the pluralist literatureon interest groups, of the ‘proper’ functional differentiation between partiesand interests? The answer to the latter question cannot be a simple one. It istrue that the alleged (relative) autonomization of associational activity fromparty and state domination may make it more likely for associations to playroles and articulate strategies in ways that correspond to some of the tenetsof a familiar approach to the ‘functions’ of interest groups and the divisionof labour between parties and interests. But certain macroscopic factors com-plicate the picture. The increased interpenetration of state and society andthe shifts, and partial fusion, in public-private boundaries37 have resulted ina new politicization of organized interests. In certain contexts this assumeda neocorporatist form, but more generally it amounted to the assumptionby organized interests of various roles with respect to different aspects oftheir environment and at different levels of their operation. Furthermore, inmore recent years, these developments acquired more complex dimensionsin view of the increasing fusion of the national and the European levels inpolicy-making. Accordingly, rather than corresponding to the familiar plural-ist models, the emerging picture may indicate the search for new relationshipsbetween increasingly internationalized economic actors and their national andEuropean political interlocutors.


The disentanglement we refer to evolves within, not in contrast to,these macroscopic framework-shifts. Politics in the national cases interactin different ways with such shifts. That is why we cannot derive confidentconclusions about interest politics and policy styles from general propos-itions about the type of democratic regime in question. To illustrate thepoint, we may envisage a consensual-majoritarian axis combined with an axisof proactive-reactive policy styles. National cases would be classifiable onthe basis of whether they correspond to majoritarian-proactive, majoritarian-reactive, consensual-proactive or consensual-reactive combinations. Italy(before 1993) would correspond to the consensual-reactive partition. Greecewould be classified as majoritarian-reactive. (To give examples in the otherpartitions, the Netherlands before 1970 would be consensual-proactive, whileSweden would correspond to the majoritarian-proactive combination). Shiftsalong the consensual-majoritarian axis, especially in the political-institutionalsense of Lijphart’s more recent work (as distinct from the sociological-cultural emphasis of his earlier work on the Netherlands), do not necessarilyimply major changes in the style of policy-making and implementation. Thelatter aspects are conditioned also by the organizational properties and stra-tegic considerations of interests and on their relations with the institutions ofgovernment, on the one hand, and the parties, on the other.

We suggest that, in the national cases in question, greater autonomy ofinterest politics from party colonization and state domination may facilitatepolicy adjustment. It may facilitate policy adjustment in two possible scen-arios. Either by enabling broad intersectoral agreements over policy issues orby freeing national policy-making from the burden of oligopolistic coalitions– a social democratic and a neoliberal scenario respectively. The social demo-cratic scenario requires some capacity for collective action and, as a secondstep, an agreement over the pursuit of agreed societal objectives through inter-active adjustments between political compromise and interest intermediation.The neoliberal scenario, on the other hand, reflects the sociopolitical imper-atives of the globalized European economy and requires depoliticization ofthe links between interest intermediation, policy-making and the operationof party democracy. In either case, it should be noted that, in different ways,in both Italy and Greece the previously dominant entanglement of interestpolitics in the labyrinths of party and state influences was a factor whichessentially inhibited concertationist policy-making, if the latter is meant toinvolve the attempt to reach policies which pursue societal goals.


Acknowledgements

This is a work of joint authorship; the authors’ names appear in alphabet-ical order. Earlier versions of this article were prepared for presentationat the 1996 Annual Conference of the Political Studies Association ofthe UK, Glasgow, and the 1997 Joint Sessions of the ECPR, Bern. Forvery useful comments and suggestions the authors are grateful to FederigaBindi, Christopher Binns, Joaquin Fernandez-Castro, Hans Keman, Kleo-menis Koutsoukis, Maria Mendrinou, Michael Moran, Ilias Nicolacopoulos,Simona Piattoni and the three anonymous reviewers. The usual disclaimerapplies.

Notes

1. For a ground-breaking recent exception, see Schmitter (1995: 284–314).2. For a good overview in English of these debates, see Lanzalaco (1993).3. For important analyses which underline the dominant role of parties, seeinter alia Clogg

(1993) and Charalambis (1989).4. For diverse approaches which underline the state’s influence over civil society institutions

in Greece, see Mouzelis (1978), Tsoucalas (1986) and Clogg (1983).5. On the Italian Christian Democrats and their coalition-forming capacities for over four

decades, see Leonardi & Wertman (1989).6. On the consensual and the majoritarian types of democracy, see Lijphart (1984).7. Up to the early 1980s, when the PSI was able to head a government (1983), government

performance and policy output involved certain consociationalpractices, resulting fromthe need to accommodate the Communist opposition. Craxi and the PSI took a differentview in the 1980s, approaching the PCI as an electoral reservoir rather than a latent part-ner in government. On the consociational practices, see Morisi (1992). However, as wewill argue below, a consociationalsystempresupposes a number of more comprehensiveinstitutional and cultural features.

8. See,inter alia, Lanzalaco (1990), Morlino (1991), Mattina (1991), Lanzalaco & Ur-gani (1992) and Martinelli (1994). For further bibliographical information the reader isreferred to the last work.

9. For a definition of ‘sharing-out government’, see Amato (1976) and Vassallo (1994). Theconsociational practices which we noted led other analysts to approach the Italian case asan example of consociational democracy (see Fabbrini 1994).

10. Lanzalaco suggests that ‘in discussing oligopolistic pluralism we intend to underline threeinterrelated factors. First, we want to focus on the system of interest representation ratherthan political parties and the government system as a whole. Second, we intend to emphas-ise the fact that access to policy processes is based on a variety of ‘filters’. Among thesethe political party is certainly the most important but by no means the only one. Consider,for example, some discretional and particularistic practices within public administration,or the functioning of policy networks. Lastly, we intend to emphasize the fact that thedistinctive element of interest groups policy in Italy works through mechanisms whichreduce competition (and create interest representation oligopolies) among interest groups,


apart from the particular actor regulating access (public servant, legislator, executive,etc.), and the type of political bond cementing access mechanisms within decision-makingprocesses’ (Lanzalaco 1995: 118).

11. It was in fact almost exclusively an expression of Piedmontese industrialists. On thispoint, see Maraffi (1994: 137–196) and Lanzalaco (1990).

12. Apart from the ‘industrial’ Federations, members of Confindustria were also the Fed-erations of artisans, managers of industrial firms, municipal transport, landlords. Theorganization of artisans was particularly important, since they were a large category, andquite difficult to distinguish from other small business; Confindustria attached a specialvalue to representing artisans. In 1938, 43 Federations were members of Confindus-tria, and the total of subscribers was 685,328. Of these, 350,830 were artisans, 238,353landlords and managers but only 96,145 were industrialists (see Maraffi 1994: 153–162).

13. These latter events followed the Law of 1956 instituting the Ministry for State Participa-tions, which provided for the detachment of state owned companies from the associationsof private employers of which they had been members. On the creation of Intersind, seeIntersind (1988), Aglieta (1979) and Manaffi (1990).

14. In this respect it suffices to recall the limited influence that the election to the Senate, in1976, of Giovanni Agnelli’s brother, Umberto, had on DC policy-making; he even refusedto repeat the experience in the following legislature.

15. To achieve that, in 1956 Confindustria, jointly with Confagricoltura, Confcommercio, andother minor associations, promoted the constitution of Confintesa in order to direct pref-erence votes in the administrative election of 1956 and in the general political electionsof 1958 towards Christian Democratic candidates close to Confindustria positions, andtowards Liberal Party candidates. See LaPalombara & Pirzio Ammassari (1968). Morerecently there have been several attempts at direct access. In 1976 for example, as noted,Umberto Angelli, ran as a candidate for the DC, and then gave up the charge the followinglegislature. Susanna Agnelli, his sister, was more persistent: she was elected Member ofParliament with the PRI and remained for four legislatures (from the VII to X).

16. For these concepts we draw on Mattina (1991).17. On the transformation of Italian politics in the early 1990s, see Pasquino (1995). In Eng-

lish, cf. Mershon and Pasquino (1994), Morlino (1996), Gundle & Parker (1996) andD’Alimonte (1998).

18. On the recent transformations of the various relations between the political system and thesystem of interest intermediation, see Mattina (1994), Lanza (1995), Alacevich (1996),Ferrante (1996), Perulli & Catino (1997) and Zan (1997).

19. A good example of such a sector is the merchant marine, in which the official (certified)union ‘cooperated’ with the ministry and the Shipowner’s Federation (EEE) in a tripart-ite decision-making scheme which consistently favoured business views and cushionedshipping capital from labor unrest.

20. On the transformations of Greek ‘disjointed corporatism’ and the impact of Europeaniza-tion, see Lavdas (1997).

21. As we have suggested, we need to distinguish between the utilization of certain con-sociationalpractices and the operation of a consociationalsystemcharacterized bycomprehensive institutionalized rules which aim to promote effective decision-makingthrough compromise politics. Such a system may create the conditions for societal corpor-atist arrangements, although the development and sustainability of the latter will dependalso on the organizational properties and strategies of interests (i.e., a consociational sys-tem provides a facilitating background for societal corporatism, but the latter is not simply


a dimension of consociationalism: it presupposes features that are specific to interest polit-ics and policy). On the links between cosociational institutional and cultural traditions andsuccessful societal corporatism and concertation in policy-making, see Scholten (1987).

22. For an influential scholarly view, see Mouzelis (1990: 99).23. SEV membership initially included also very small firms and artisans, a situation that was

formally changed in 1946.24. For a very useful overview of developments until the early 1990s, see Kravaritou (1994:

13-17).25. Fakelaki, literally meaning a little envelope, is the equivalent to thebustarellain Italian

clientelism, face-to-face contacts and graft.26. For example, the state-controlled National Bank group generously supported private in-

dustrial investment in the 1950s and the 1960s, but the situation changed in the 1970s.For a characteristically bitter account of the changed circumstances post-1974 by anindustrialist who had been a SEV president in the 1960s, see Drakos (1981).

27. For a different approach, see Mavrogordatos (1988, 1993). Mavrogordatos’s study (1988),which was the first comprehensive scholarly account of Greek organized interests toappear in any language, ventured a general conceptualization of thesystemof interestintermediation as state corporatist.

28. As we noted, a characteristic example is the state’s involvement in industrial relationsin the merchant marine, in which business power vis-à-vis the state has been excep-tional due to the shipowners’ command of a substantial share of the Greek economyand of world tonnage and also in view of the option of switching to flags of convenience(Cyprus, Liberia, Panama). The fact that state corporatism has been present in a sectormarked by capital mobility indicates that this form of coercive interest intermediation andpolicy-making was associated with business power rather than state domination of interestpolitics in general.

29. The SEV main organs (Annual General Meeting, Governing Council, AdministrativeCommittee) are assisted by a relatively developed administrative staff structure, althoughthe role of the Director-General is confined mainly to administrative tasks in the strictsense. In contrast to the situation in more developed peak associations, the SEV hasretained a strong emphasis on the role of the president. While the bureaucratization ofassociations has been a critical aspect of the larger process involving closer relationshipsbetween organized interests and the public administration in policy-making, it has alsobeen associated with an autonomization of the organization in its policy operation. In their1970s study of the CBI, Grant and Marsh quote interviews with CBI members suggestingthat ‘because of its professionalism and its ability to discuss things intelligently, (the CBI)is exposed to the danger of being used and getting satisfaction from being used’ (Grant& Marsh 1977: 91). The weakness of the role of permanent staff in the SEV indicates arelatively low stage of organizational development as well as a deliberate effort to keepas much as possible of the SEV business into the hands of the big industrialists whom theorganization has tended to represent.

30. Surveys of citizens’ evaluation of interest groups from the 1980s onwards reveal that theSEV suffers from very low degrees of sympathy. On sympathy scores for Greek interestgroups, see Mendrinou & Nicolacopoulos (1997). On Greek politics and political culture,see Contogeorgis (1977), Diamandouros (1993) and Demertzis (1994). On the complex-ities of the historical lineages of the Greek identity and its relationship to Europe, seeKitromilides (1995).


31. For scholarly approaches to the authoritarian regime, cf. Mouzelis (1978), Charalambis(1985) and Bermeo (1995).

32. For analyses of the changed policy environment post-1974, cf. Katsoulis et al. (1988),Spourdalakis (1988), Diamandouros (1993), Demertzis (1994), Koutsoukis (1995) andLavdas (1997).

33. For an excellent overview, see Clogg (1993). On PASOK and its development, the bestscholarly treatment is Spourdalakis (1988); cf. Spourdalakis (1996).

34. For a similar argument about the need to get our cases and our classifications right beforethe comparisons begin, see Bermeo (1995: 452).

35. On the Europeanization of domestic processes, institutions and policies and the increasingfusion of the domestic and the European levels, see Wessels (1992), Andersen & Eliassen(1993), Ladrech (1994), Rometsch & Wessels (1996) and Lavdas (1997). On the interlink-ing of the domestic and EU-level politics of corruption in the process of Europeanization,see Mendrinou (1994).

36. On the Italian case, see Hine (1996: 311–324); on Greece, see Lavdas (1997).37. See,inter alia, Maier (1987), Hancher & Moran (1989) and Moran & Wright (1991).

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Address for Offprints:Dr Kostas A. Lavdas, Department of Politics, Faculty of Economicsand Social Sciences, University of the West of England, Bristol BS16 1QY, UKPhone: +44 117 976-3869; Fax: +44 117 976-3870; E-mail: [email protected]

the disentanglement of interest politics

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