Neo corporatism is defined as a cooperative relationship between an interest group and the government for the purpose of maintaining a fixed procedure of developing and implementing economic policies. Neo corporatism is one of the schools of thought of Interest Groups.
When interest groups or corporate groups like labor, business, and agricultural etc affiliations form an organization based on their common interests it is known as corporatism. Neo corporatism is a modern form of corporatism. Corporatism had gone out of practice and then it reemerged in the 1960’s and 1970’s as a response to the threat of recession and inflation as “neo- corporatism”. It emerged mainly in Adolf Hitler’s Germany and Fransisco Franco’s Spain.
The main objective of neo-corporatism is to keep costs and inflation under control for the good of the country. As if these things are kept in control the country will prosper in international trade and the standard of living in the country will improve. So primarily it is a voluntary agreement between the government, businesses and labor to focus on economic goals. For neo-corporatism to work efficiently in a country the country has to have strong associations which can implement agreements between the government, businesses and labor. So countries which have neo corporatism like Germany, Austria, Switzerland and Scandinavia have strong associations.
There are some criticisms of neo corporatism as well. It involves only specific major groups which have special relations with the government. All other interest groups do not have special relations with the government so it becomes like pluralism only. Another criticism about neo corporatism is that it is varied and practices differently in different countries. While it is practiced very well in Scandinavia it is not practices that well in France and Belgium and in Japan the labor are not included.
Hence, this concludes the definition of Neo-Corporatism along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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