Polder Model
Encyclopedia
The polder model is a term with uncertain origin that was first used to describe the internationally acclaimed Dutch
version of consensus policy in economics, specifically in the 1980s and 1990s. However, the term was quickly adopted for a much wider meaning, for similar cases of consensus decision-making
, which are supposedly typically Dutch. It is described with phrases like 'a pragmatic recognition of pluriformity' and 'cooperation despite differences'.
A popular explanation of both the term and the reason this decision-making style works so well in the Netherlands is the unique situation created by the fact that a large part of the country consists of polder
s below sea-level. Ever since the Middle Ages
, competing or even warring cities in the same polder were forced to set aside their differences to maintain the polders, lest they both be flooded.
s such as VNO-NCW
, labour unions such as the Federation Dutch Labour Movement
, and the government
. These talks are embodied in the Social Economic Council . The SER serves as the central forum to discuss labour issues and has a long tradition of consensus, often defusing labour conflicts and avoiding strikes. Similar models are in use in Finland
, namely Comprehensive Income Policy Agreement
and universal validity of collective labour agreements
.
The current polder model is said to have begun with the Wassenaar Accords of 1982 when unions, employers and government decided on a comprehensive plan to revitalise the economy involving shorter working times and less pay on the one hand, and more employment on the other. This polder model, combined with a neo-liberal
economic policy of privatisation
and budget cuts has been held to be responsible for the Dutch economic miracle of the late 1990s.
An important role in this process was played by the Dutch Central Planning Bureau
http://www.cpb.nl (CPB) originally founded by Jan Tinbergen
. The CPB's policy advice since 1976, in particular with the Den Hartog and Tjan model, in favour of wage restraint, was an important argument, supportive for government and employers, that the unions could not easily counter.
) has been used pejoratively by some politicians to describe the slow decision making process, where all parties have to be heard. The model flourished under the 'Purple
' governments of Dutch prime minister
Wim Kok
, a coalition including traditional rivals the Labour Party (a social-democratic party
, whose colour is red) and the People's Party for Freedom and Democracy
(right-wing liberals
, whose colour is blue). In the declining economic climate of the early 21st century the model came under fierce attack from particularly right-wing
politician Pim Fortuyn
and his book "De puinhopen van 8 jaar paars" ("The wreckage of eight years of purple").
One explanation points to the rebuilding of the Netherlands after the Second World War. Corporatism
was an important feature of Christian Democratic
, and particularly Catholic
, political thought. After the Second World War, the Catholic, Protestant, Christian, social-democratic and liberal parties decided to work together to reconstruct the Netherlands after the ravages of war, as did their unions
and employers' organisations
. Important institutes, like the SER, of the polder model were founded in this period. No single political party has ever had anything approaching an overall majority in parliament, so coalition government is inevitable. This makes parties extremely cautious, today's enemy may be tomorrow's ally. Even more in present times when the death of ideology has made it possible for almost all the parties to work together.
Another explanation points to the dependency of the Netherlands on the international economy
. The Dutch cannot afford protectionism
against the unpredictable tides of the international economy, because it is not an autarkic
economy. Therefore to cushion against the international economy, the Dutch set up a tri-partite council which oversaw an extensive welfare state
.
A third explanation refers to a unique aspect of the Netherlands, largely consisting of polder
s, land regained from the sea, which requires constant pumping and maintenance of the dykes. So ever since the Middle Ages
, when this was started, different societies living in the same polder were forced to cooperate because without unanimous agreement on shared responsibility for maintenance of the dikes and pumping stations, the polders would have flooded and everyone would have suffered. Crucially, even when different cities in the same polder were at war, they still had to cooperate in this respect. This is thought to have taught the Dutch to set aside differences for a greater purpose.
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
version of consensus policy in economics, specifically in the 1980s and 1990s. However, the term was quickly adopted for a much wider meaning, for similar cases of consensus decision-making
Consensus decision-making
Consensus decision-making is a group decision making process that seeks the consent, not necessarily the agreement, of participants and the resolution of objections. Consensus is defined by Merriam-Webster as, first, general agreement, and second, group solidarity of belief or sentiment. It has its...
, which are supposedly typically Dutch. It is described with phrases like 'a pragmatic recognition of pluriformity' and 'cooperation despite differences'.
A popular explanation of both the term and the reason this decision-making style works so well in the Netherlands is the unique situation created by the fact that a large part of the country consists of polder
Polder
A polder is a low-lying tract of land enclosed by embankments known as dikes, that forms an artificial hydrological entity, meaning it has no connection with outside water other than through manually-operated devices...
s below sea-level. Ever since the Middle Ages
Middle Ages
The Middle Ages is a periodization of European history from the 5th century to the 15th century. The Middle Ages follows the fall of the Western Roman Empire in 476 and precedes the Early Modern Era. It is the middle period of a three-period division of Western history: Classic, Medieval and Modern...
, competing or even warring cities in the same polder were forced to set aside their differences to maintain the polders, lest they both be flooded.
Socio-economic polder model
The Dutch polder model is characterised by the tri-partite cooperation between employers' organizationEmployers' organization
An employers' organization, employers' association or employers' federation is an association of employers. A trade union, which organizes employees is the opposite of an employers' organization...
s such as VNO-NCW
VNO-NCW
VNO-NCW is a Dutch employers' federation.-History:VNO-NCW was founded in 1996 as fusion of the Christian-democratic Nederlands Christelijk Werkgeversverbond , which was founded as fusion of the Protestant PCW and the Catholic NKW, and the liberal Verbond van Nederlandse Ondernemingen...
, labour unions such as the Federation Dutch Labour Movement
Federatie Nederlandse Vakbeweging
The Federatie Nederlandse Vakbeweging is a federation of trade unions of the Netherlands.-History:...
, and the government
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
. These talks are embodied in the Social Economic Council . The SER serves as the central forum to discuss labour issues and has a long tradition of consensus, often defusing labour conflicts and avoiding strikes. Similar models are in use in Finland
Finland
Finland , officially the Republic of Finland, is a Nordic country situated in the Fennoscandian region of Northern Europe. It is bordered by Sweden in the west, Norway in the north and Russia in the east, while Estonia lies to its south across the Gulf of Finland.Around 5.4 million people reside...
, namely Comprehensive Income Policy Agreement
Comprehensive Income Policy Agreement
Finnish national income policy agreements or comprehensive income policy agreements are tripartite agreements between Finnish trade unions, employers' organizations, and the Finnish government. They are policy documents covering a wide range of economic and political issues, such as salaries,...
and universal validity of collective labour agreements
Universal validity of collective labour agreements
In Finland, Universal validity of collective labour agreements is a condition that a collective agreement in an economic sector becomes a universally applicable legal minimum for any individual's employment contract, union member or not. It requires that half of the workforce in that sector support...
.
The current polder model is said to have begun with the Wassenaar Accords of 1982 when unions, employers and government decided on a comprehensive plan to revitalise the economy involving shorter working times and less pay on the one hand, and more employment on the other. This polder model, combined with a neo-liberal
Neoliberalism
Neoliberalism is a market-driven approach to economic and social policy based on neoclassical theories of economics that emphasizes the efficiency of private enterprise, liberalized trade and relatively open markets, and therefore seeks to maximize the role of the private sector in determining the...
economic policy of privatisation
Privatization
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...
and budget cuts has been held to be responsible for the Dutch economic miracle of the late 1990s.
An important role in this process was played by the Dutch Central Planning Bureau
CPB (Netherlands)
The CPB Netherlands Bureau for Economic Policy Analysis is an independent Dutch government agency founded in 1945 by Jan Tinbergen. It is located in The Hague....
http://www.cpb.nl (CPB) originally founded by Jan Tinbergen
Jan Tinbergen
Jan Tinbergen , was a Dutch economist. He was awarded the first Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel in 1969, which he shared with Ragnar Frisch for having developed and applied dynamic models for the analysis of economic processes...
. The CPB's policy advice since 1976, in particular with the Den Hartog and Tjan model, in favour of wage restraint, was an important argument, supportive for government and employers, that the unions could not easily counter.
Other uses
The word polder model and especially the verb "polderen" (English: to polderPolder
A polder is a low-lying tract of land enclosed by embankments known as dikes, that forms an artificial hydrological entity, meaning it has no connection with outside water other than through manually-operated devices...
) has been used pejoratively by some politicians to describe the slow decision making process, where all parties have to be heard. The model flourished under the 'Purple
Purple (government)
Purple is a common term in politics for governments or other political entities consisting of parties that have red and blue as their political colours...
' governments of Dutch prime minister
Prime Minister of the Netherlands
The Prime Minister of the Netherlands is the chairman of the Council of Ministers of the Netherlands. He is the de facto head of government of the Netherlands and coordinates the policy of the government...
Wim Kok
Wim Kok
Willem "Wim" Kok ; born September 29, 1938) is a retired Dutch politician of the Labour Party . He served as Prime Minister of the Netherlands from August 22, 1994 until July 22, 2002....
, a coalition including traditional rivals the Labour Party (a social-democratic party
Social democracy
Social democracy is a political ideology of the center-left on the political spectrum. Social democracy is officially a form of evolutionary reformist socialism. It supports class collaboration as the course to achieve socialism...
, whose colour is red) and the People's Party for Freedom and Democracy
People's Party for Freedom and Democracy
The People's Party for Freedom and Democracy is a conservative-liberal political party located in the Netherlands. The VVD supports private enterprise in the Netherlands and is often perceived as an economic liberal party in contrast to the social-liberal Democrats 66 alongside which it sits in...
(right-wing liberals
Conservative liberalism
Conservative liberalism is a variant of liberalism, combining liberal values and policies with conservative stances, or, more simply, representing the right-wing of the liberal movement....
, whose colour is blue). In the declining economic climate of the early 21st century the model came under fierce attack from particularly right-wing
Right-wing politics
In politics, Right, right-wing and rightist generally refer to support for a hierarchical society justified on the basis of an appeal to natural law or tradition. To varying degrees, the Right rejects the egalitarian objectives of left-wing politics, claiming that the imposition of equality is...
politician Pim Fortuyn
Pim Fortuyn
Wilhelmus Simon Petrus Fortuijn, known as Pim Fortuyn was a Dutch politician, civil servant, sociologist, author and professor who formed his own party, Pim Fortuyn List ....
and his book "De puinhopen van 8 jaar paars" ("The wreckage of eight years of purple").
Historical background
Somewhat ironically, there is no consensus about the exact historical background of the polder model. In general there are three views on this subject.One explanation points to the rebuilding of the Netherlands after the Second World War. Corporatism
Corporatism
Corporatism, also known as corporativism, is a system of economic, political, or social organization that involves association of the people of society into corporate groups, such as agricultural, business, ethnic, labor, military, patronage, or scientific affiliations, on the basis of common...
was an important feature of Christian Democratic
Christian Democracy
Christian democracy is a political ideology that seeks to apply Christian principles to public policy. It emerged in nineteenth-century Europe under the influence of conservatism and Catholic social teaching...
, and particularly Catholic
Catholic
The word catholic comes from the Greek phrase , meaning "on the whole," "according to the whole" or "in general", and is a combination of the Greek words meaning "about" and meaning "whole"...
, political thought. After the Second World War, the Catholic, Protestant, Christian, social-democratic and liberal parties decided to work together to reconstruct the Netherlands after the ravages of war, as did their unions
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...
and employers' organisations
Employers' organization
An employers' organization, employers' association or employers' federation is an association of employers. A trade union, which organizes employees is the opposite of an employers' organization...
. Important institutes, like the SER, of the polder model were founded in this period. No single political party has ever had anything approaching an overall majority in parliament, so coalition government is inevitable. This makes parties extremely cautious, today's enemy may be tomorrow's ally. Even more in present times when the death of ideology has made it possible for almost all the parties to work together.
Another explanation points to the dependency of the Netherlands on the international economy
International trade
International trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product...
. The Dutch cannot afford protectionism
Protectionism
Protectionism is the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow "fair competition" between imports and goods and services produced domestically.This...
against the unpredictable tides of the international economy, because it is not an autarkic
Autarky
Autarky is the quality of being self-sufficient. Usually the term is applied to political states or their economic policies. Autarky exists whenever an entity can survive or continue its activities without external assistance. Autarky is not necessarily economic. For example, a military autarky...
economy. Therefore to cushion against the international economy, the Dutch set up a tri-partite council which oversaw an extensive welfare state
Welfare state
A welfare state is a "concept of government in which the state plays a key role in the protection and promotion of the economic and social well-being of its citizens. It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those...
.
A third explanation refers to a unique aspect of the Netherlands, largely consisting of polder
Polder
A polder is a low-lying tract of land enclosed by embankments known as dikes, that forms an artificial hydrological entity, meaning it has no connection with outside water other than through manually-operated devices...
s, land regained from the sea, which requires constant pumping and maintenance of the dykes. So ever since the Middle Ages
Middle Ages
The Middle Ages is a periodization of European history from the 5th century to the 15th century. The Middle Ages follows the fall of the Western Roman Empire in 476 and precedes the Early Modern Era. It is the middle period of a three-period division of Western history: Classic, Medieval and Modern...
, when this was started, different societies living in the same polder were forced to cooperate because without unanimous agreement on shared responsibility for maintenance of the dikes and pumping stations, the polders would have flooded and everyone would have suffered. Crucially, even when different cities in the same polder were at war, they still had to cooperate in this respect. This is thought to have taught the Dutch to set aside differences for a greater purpose.
External links
- The Economist, Model makers, May 2 2002
- The Economist, Economic illusions, May 2 2002
- The Economist, A fine place to be, May 2 2002
- Mark Kranenburg, The political branch of the polder model, July 1, 1999