Discussion paper

DP13130 The Power Resource Theory Revisited: What Explains the Decline in Industrial Conflicts in Sweden?

This paper revisits the Power Resource Theory by testing one of its more influential claims: the relation
between the strength of the labor movement and the reduction of industrial conflicts. Using panel data
techniques to analyze more than 2,000 strikes in 103 Swedish towns we test whether a shift in the balance
of power towards Social Democratic rule was associated with fewer strikes. The focus is on the formative
years between the first general election in 1919 and the famous Saltsjöbaden Agreement in 1938, the
period when Sweden went from a country of fierce labor conflicts to a state of industrial peace. The
spatial dimension provides new possibilities to test the theory. We find that Social Democratic power
reduced strike activity, but only in towns where union presence was strong. Powerful unions in themselves
did not reduce local strike activity. On the contrary, we find that the rise of the Social Democratic Party
in municipal governments offset about 45 percent of the estimated effect of growing union presence
on industrial conflicts. We do not see any significant tangible concessions in terms of increased social
spending by local governments after a left-wing victory as predicted by Power Resource Theory. Instead
the mechanism leading to fewer strikes appears to be related to corporatist explanations.

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Citation

Molinder, J, T Karlsson and K Enflo (eds) (2018), “DP13130 The Power Resource Theory Revisited: What Explains the Decline in Industrial Conflicts in Sweden?”, CEPR Press Discussion Paper No. 13130. https://cepr.org/publications/dp13130