A form of social organization in which the key economic, political and social decisions are made by corporate groups, or these groups and the state jointly. Individuals have influence only through their membership of corporate bodies. These include trade unions, professions, business corporations, political pressure groups and lobbies, and voluntary associations. Corporatism may be contrasted with decision-making via the market, in which individuals who make their own private market choices collectively and cumulatively shape society. At the political level, corporatism may also be contrasted with the traditional form of liberal democracy in which political decisions were taken only by governments representing the electorate directly.

The theory of the corporate state - that the political community includes a number of corporate groups and that individuals are to be represented politically via their membership of these groups rather than as individual electors - was adopted in Italian fascism.

Many Western European democracies moved towards a tripartite form of corporatism in the 1970s, and governments made social and economic policy in consultation and negotiation with the powerful vested interests of trade union movements and employers' associations. Sociologists have suggested that politicians allowed corporate bodies to influence state decisions in return for these bodies controlling their members: corporations delivered the support of their members in return for an influence over political decision-making. Trade unions restrained their members' strike activity and pay demands, employers aligned the pursuit of their private interests with those of the state, while governments in return protected labour and pursued economic expansion. Corporatism was particularly strong in the Scandinavian nations, the Low Countries, West Germany and Austria. In the 1980s, the effect of economic downturn was to weaken the trade union movement and, outside Scandinavia, business and government eroded tripartite corporatism as they found less need to cooperate with unions to curb worker militancy.

Sociologists disagree whether corporatism represents an attempt by the state to incorporate and pacify militant trade unionism at the cost of employees' interests, or whether it marks the successful use of workers' power to constrain business and the state. Where corporatism survived through the 1980s, employees' interests were in fact better protected than where market forces were allowed to dominate economic life, with lower rates of both unemployment and inflation. See: Democracy; Fascism; State; Trade Unions.

Bibl. Panitch (1980); Goldthorpe (ed.) (1985)