Loyalty Dilemmas and Market Reform: Party-Union Alliances under Stress in Mexico, Spain, and Venezuela

Market reform has dealt a serious blow to traditional alliances between governing parties and labor unions. This article examines the fate of these alliances by applying a revised version of Albert Hirschman's schema of exit, voice, and loyalty to party-union relations in Mexico, Spain, and Venezuela. After refining the concept of loyalty, the author argues that it is embedded in the principles and norms on which these alliances are based. Market reform places party-affiliated labor leaders in a "loyalty dilemma" in which they have no choice but to behave disloyally toward one set of claimants. Their propensity to respond with either voice or exit depends on their vulnerability to reprisals for disloyal behavior and the party's capacity to retain their loyalty even in the face of sacrifices imposed on workers and unions. Both variables are linked to the authority structures in which labor and party leaders find themselves. In the short to medium run the alliances most likely to survive are those in which labor leaders have significant autonomy from their bases and/or in which the party is able and willing to challenge its own executive. In the long run, however, even these alliances may be vulnerable to collapse because of popular frustrations with the inadequacy of interest representation and the multiple pressures on political organizations to adapt to a more fluid and uncertain environment.