European Journal of Political Research 35: 307–339, 1999.
© 1999 Kluwer Academic Publishers. Printed in the Netherlands.
307
The business ﬁrm model of party organisation:
Cases from Spain and Italy
JONATHAN HOPKIN1
& CATERINA PAOLUCCI2
1Department of Political Science and International Studies, University of Birmingham, UK;
2Department of Social and Political Sciences, European University Institute, Florence, Italy
Abstract. Discussion of new forms of party organisation have largely focused on the ways
in which institutionalised parties have adapted to pressures towards ‘catch-all’ or ‘electoralprofessional’
behaviour. This article examines the ways in which new parties respond to
these pressures. A model of the ‘party as business ﬁrm’ is generated from rational choice
assumptions and it is suggested that such a model can emerge when new party systems are
created in advanced societies. Two cases of political parties which resemble the business ﬁrm
model in important ways are analysed in order to gauge the consequences of this type of party
organisation: UCD in Spain and Forza Italia in Italy. On the basis of this analysis it is argued
that business ﬁrm parties are likely to be electorally unstable and politically incoherent, and
also prone to serving particularistic interests.
Introduction
In recent years, a great deal has been written on various features of what is
broadly termed ‘party change’. This ﬁeld of study examines the emergence
of new pressures facing established political parties, and the types of organisational
changes with which parties adapt to these pressures. Party change,
from this perspective, acts on an established party system with an in-built
tendency towards continuity, and much of the empirical work within this ﬁeld
has focused on the dozen or so European democracies with an uninterrupted
post-war tradition of more or less stable party competition. Relatively little
has been written on the effects of changing forms of party organisation and
competition on recently created political parties.
Political parties which lack the organisational inertia which comes with
a long history are particularly susceptible to changing forms of party competition.
The impact of these changes on democratic governance can be
far-reaching. This is particularly important for the party systems constructed
in the new democracies emerging in Southern and Eastern Europe, where
parties are unlikely to have progressed very far towards institutionalisation.
The same point can be made for the new party systems emerging as a result
of the collapse or radical transformation of existing democratic party systems
308 JONATHAN HOPKIN & CATERINA PAOLUCCI
– Italy in the 1990s and France in the late 1950s are the obvious examples of
this phenomenon in post-war European history. In this study we will examine
the cases of two new political parties which have taken on to a greater or
lesser degree the model of party organisation which we will refer to here
as the business ﬁrm model. The parties examined in this article, whilst very
different, have a number of distinguishing features which provide interesting
insights into the effects of changing models of party organisation on new
party systems.
The party as business ﬁrm: Party organisation and the
electoral-professional model
Political parties have often been analysed in terms of ideal-type conceptions
of their function, organisation and behaviour. The pioneers of party theory
produced a series of classic deﬁnitions which still today dominate discussion
of political parties: mass parties and cadre parties (Duverger 1954), parties of
individual representation and parties of social integration (Neumann 1955),
the emergence of the much discussed catch-all party (Kirchheimer 1966).
The importance of these models cannot be limited to their unquestionable
inﬂuence on scholars researching political parties; it also extends to inﬂuence
over party builders themselves.1
Amongst more recent contributions, Panebianco (1988) identiﬁed a further
type: the electoral-professional party, which he contrasted with the massbureaucratic
party. The electoral-professional party has much in common
with the catch-all party, in that it shares the features of de-ideologisation,
weak electoral links, and centralisation of power around the party leadership
(discussion of this latter problem, of course, dates back to Michels
1962). But Panebianco also introduced a new element (1988: 262–274):
the ‘professionalisation’ of party organisations, by which he meant the
increasing dependence of party politicians on outsiders with particular technical
expertise (obvious examples of which are marketing consultants and
opinion pollsters). The low levels of institutionalisation inherent in electoralprofessional
parties led Panebianco to conclude that this tendency is likely to
provoke political ‘turbulence’, as parties become incapable of binding electors
to collective projects and electors themselves become confused by the
ambiguous and unstable behaviour of the de-ideologised parties.
This ‘nightmare scenario’ is not yet upon us, for as Panebianco was at
pains to point out, the electoral-professional party, like the catch-all party, is
an ideal type, and real political parties can be located on a continuum which
runs from the ‘pure’ mass bureaucratic to the ‘pure’ electoral-professional.
Parties are involved in gradual processes of change, and are inevitably bound
THE BUSINESS FIRM MODEL OF PARTY ORGANIZATION 309
by their histories. A cursory glance at Britain’s parties would appear to
conﬁrm this: the British Labour party, despite the elements of ‘electoralprofessionalism’
introduced in recent years, retains important features of the
party of mass integration; the Conservatives, beyond their undoubted successes
in harnessing public relations expertise to their central organisation,
are tightly bound to a sub-culture which would appear unlikely to disappear
overnight (notwithstanding their recent electoral slump). Historic political
parties, whilst responding to the opportunities and constraints of modern
electoral competition, remain rooted to their original identities, and are unlikely
to jeopardise their electoral and social foundations for unpredictable
short-term gains.
There are, however, exceptions to this optimistic picture of the stability
of European party systems. New party systems, founded in quite different
socio-economic circumstances to those in the rest of Europe, have emerged
in the new democracies of Greece, Portugal and Spain in the last twenty years.
Moreover, crises in ‘old’ democracies such as Italy have led to party system
transformation and the foundation of completely new political parties. In all
these cases, new political parties, lacking the long histories of most of their
European counterparts, have taken on central roles in democratic party competition
and governance. The high levels of socio-economic development of
these states mean that these new parties have been subject to strong pressures
towards electoral-professionalism in the same way as established parties.
However new parties lack the institutional inertia which can mitigate the
effect of these pressures. The low levels of institutionalisation of new parties
have important implications. First, in poorly institutionalised parties there are
few constraints on party leaders’ ability to follow the electoral-professional
model; in the absence of the kinds of organisational rigidities characteristic of
highly institutionalised parties their leaderships have much greater freedom of
manoeuvre. Second, poorly institutionalised parties lack the kind of guarantees
of participation and electoral support which established parties generally
enjoy, suggesting that the failure of the electoral-professional model to bring
sufﬁcient political beneﬁts could have disastrous consequences for parties’
ability to function. For the relatively new party Systems in Greece, Spain,
Portugal and now Italy, the advance of the electoral-professional model of
party organisation presents particular problems.
There is, however, another element to this which raises interesting questions
about the relationship between political science and political practice.
The elaboration of the classical ideal types of party organisation was a largely
inductive process. Duverger, for instance, made clear that the point of departure
of his classic text was the lack of political party theory and the need
to establish a preliminary theoretical framework on the basis of empirical
310 JONATHAN HOPKIN & CATERINA PAOLUCCI
observation (1954: xv–xix). Certainly, empirical observation appears to have
preceded theoretical elaboration in subsequent studies identifying the catchall
or electoral-professional models. But these models have also provided
encouragement for the growing proﬁle of deductive approaches to the study
of political party behaviour. The electoral-professional party, in contrast to the
mass party, can be readily explained by rational choice accounts of intra-party
organisation and inter-party competition, and such accounts have become
increasingly inﬂuential in recent years.2
The most radical example of this is an article by Schlesinger published
in 1984. In this article, Schlesinger takes the application of rational choice
theory to political parties to its logical consequences, by arguing that this
theory provides ‘a general framework for the study of parties, one which
is used by most students of parties, if not self-consciously in a systematic
matter, then as a set of implicit assumptions’ (1984: 373). The aim is to
make this framework explicit. Party competition – the electoral side of party
action – has been extensively studied by rational choice theorists following
the pioneering example of Downs (1957), and Schlesinger takes Downs’s
positive theory of party competition as his starting point. Parties, rather than
integrating mass collective identities into the democratic system, aim only to
achieve political ofﬁce, and, in the celebrated phrase, ‘formulate policies in
order to win elections rather than win elections in order to formulate policies’
(Downs 1957: 28). More original is Schlesinger’s attempt to extend the rational
choice account to the behaviour of party leaders and members through
an uncompromising application of Mancur Olson’s well-known ‘by-product’
theory (Olson 1965). Since politicians have the sole aim of achieving political
ofﬁce, than parties must satisfy this pursuit of political power in order
to maintain participation. The ‘self-interest axiom’ necessarily leads parties
to maximise their electoral support in order to provide their members with
opportunities for political ofﬁce.
This theoretical framework can offer a parsimonious explanation of the
move towards the electoral-professional model of party organisation. The increasing
heterogeneity of European electorates has undermined ideologically
charged appeals to entrenched subcultures, and pushed parties towards catchall
strategies of electoral mobilisation. This would account for a number of the
features of electoral-professional parties, in particular the reduction of ideological
baggage, the weakening of ties with the core electoral constituency, and
the loss of inﬂuence of grass-roots members and concomitant centralisation
of power around party leaders. Another important development, the extension
of mass communications (particularly television) to every corner of society,
has underpinned these changes, by permitting parties to mobilise support
around party and leadership images carefully prepared by public relations
THE BUSINESS FIRM MODEL OF PARTY ORGANIZATION 311
consultants and media experts. Policy positions are elaborated by reference
to opinion polling which sounds the electorate’s views on contentious issues
and provides information on those policy proposals most likely to attract the
target electorate. The party’s election campaign uses standard marketing and
advertising procedures in order to ‘sell a product’ (political representatives
arguing for public policies) as an enterprise would use them to sell private
consumer goods.
The analogy is deliberate and signiﬁcant. In his article, Schlesinger asserts
that ‘Olson has given us a theory that allows us to apply the same assumptions,
perspectives, and logic we commonly apply to private goods-producing
organisations to organisations which produce collective beneﬁts’ (1984: 385).
Of course, this approach is not completely new: both Weber (1948) and
Schumpeter (1976) saw political parties as serving the more or less private
interests of political entrepreneurs; party leaders whose aim was to occupy
positions of public ofﬁce for the trappings and prestige they provided.3
The
theory of the political entrepreneur offers a solution to the free-rider problem
inherent in public good-producing organisations like political parties; the
entrepreneur offers to coordinate and lead the latent group in return for an
element of private ‘proﬁt’ (the prestige and material advantages of public
ofﬁce).4
The party, instead of being a voluntary organisation with essentially
social objectives, becomes a kind of ‘business ﬁrm’, in which the public
goods produced are incidental to the real objectives of those leading it; in
Olson’s terminology, policy is a ‘byproduct’.
This raises two questions, one of which is difﬁcult to answer at the stage,
and the other which the rest of this paper will attempt to address. The ﬁrst
is the interaction between the deductive theory emerging from the work of
scholars such as Schlesinger and the political practice of those building or
leading political parties. In the absence of extensive studies on the contacts
between politicians and academics or specialists in organisational behaviour
we will limit ourselves to suggesting the possibility (though not the probability)
of theoretical models of party organisation inﬂuencing the decisions
party leaders make. The second question concerns the practical consequences
of what can tentatively be described as the ‘business ﬁrm’ model of party
behaviour.5
In particular we would like to address the implications for party
politics of the electoral-professional model of party organisation when it is
taken to its logical conclusion. What follows is a necessarily brief analysis of
two cases of new political parties whose creation owed much to the activities
of political ‘entrepreneurs’, and whose structures reﬂected important features
of the electoral-professional or business ﬁrm model discussed above. The two
cases are very different, and we do not claim that both parties approximate
the model to the same degree. However we do suggest that the comparison
312 JONATHAN HOPKIN & CATERINA PAOLUCCI
provides an insight into the possible consequences of new forms of party
organisation.
‘La empresa de Adolfo Suárez’:6
The UCD in post-Franco Spain
The creation and collapse of the Unión de Centro Democrático (UCD) in the
Spanish transition to democracy is a remarkable case of a new party failing
to survive into maturity. On another level it is an interesting example of a
party failing to survive the demise of its founding leader, Adolfo Suárez,
Prime Minister of Spain from 1976–81, and the man most credited with the
success of Spain’s process of democratisation after Franco’s death. At the
risk of simplifying a complex chain of events,7
it is worth brieﬂy examining
the UCD’s trajectory in the framework of the business ﬁrm model of party
organisation.
The genetic model. UCD did not emerge as the political expression of any
identiﬁed social group, although the electorate it came to represent did have
some common features.8
It emerged instead as a result of Adolfo Suárez’s
need to establish a political vehicle to continue his premiership after he had
called democratic elections (the ﬁrst in over 40 years) to be held in June
1977. In order to maintain power,9
Suárez needed to recruit able individuals
as parliamentary candidates, and to co-opt possible rivals for his target
electorate. He did this by forming a coalition with small Liberal, Christian
Democrat and Social Democrat groups associated with the moderate
opposition to Franco, and groups of reformist functionaries from the Movimiento
(the Francoist single party). The creation of a coalition of such diverse
ideological backgrounds was made possible by two unifying factors: broad
agreement over the need to support Suárez’s transition strategy, and, crucially,
the extraordinarily powerful position in which Suárez found himself. Suárez’s
unrivalled popularity in the 1976–77 period – stemming from his achievement
in pulling Spain out of a political crisis and creating the conditions for a
negotiated democratisation – made him a formidable electoral asset, and he
was able to offer access to public policy inﬂuence in return for political support.
Moreover, Suárez’s control over an unreformed state apparatus brought
overwhelming electoral advantages: unlimited access to state television, an
incipient territorial structure through his contacts in the Movimiento, easy access
to campaign funding, and exclusive use of the opinion polling expertise
in the state public opinion research institute (the Centro de Investigaciones
Sociológicas). As Prime Minister, Suárez had almost exclusive control over
these resources.
THE BUSINESS FIRM MODEL OF PARTY ORGANIZATION 313
UCD’s organisational development was closely conditioned by these circumstances.
The very ﬁrst organisational ‘event’ in the party’s history – the
drawing up of candidate lists for the 1977 elections – was closely controlled
by Suárez’s circle, and the participating groups were in no position to contest
this. The election campaign which led to UCD’s victory (a few seats
short of an absolute majority) was centred around Suárez’s leadership image,
emphasising his youthful looks as well as his project of political reform.
Suárez’s skilful use of television (he had been director general of Spanish
television) was a key part of this campaign strategy. Ideological slogans
were carefully avoided, and the campaign discourse focused on the need to
integrate all sectors of society into a new political system. It is apparent,
therefore, that from the beginning UCD was, in a number of key respects,
an electoral-professional party.
The organisational development of the party in its initial phase conﬁrmed
this tendency. The formal coalition of parties was quickly dissolved and a
unitary party structure was imposed. Unsurprisingly, this aroused suspicion
and discontent amongst the ideological factions, but again, the absence of
any viable political alternative or exit option (Hirschman 1970) to Suárez’s
leadership precluded serious internal opposition. A highly centralised party
organisation emerged, with authority emanating from the presidency through
the secretary general (appointed by the president), and no formal recognition
of the party’s heterogeneous origins. The party executive was elected through
a majority list system (easily controlled by the president), and in any case
was rarely consulted. The territorial structure of the party was under ﬁrm
central control, and provincial ofﬁces were largely controlled by Suárez allies
from the old Movimiento. This centralisation of power around the leaders’
ofﬁce extended to a ‘consultative’ role in the drawing up of candidate lists,
giving the leader the potential to control the composition of the parliamentary
party. The evidence pointing to a highly centralised ‘presidentialist’ party was
overwhelming.
Other features of the electoral-professional party were present. Although
a ‘membership drive’ was announced, it was followed through only halfheartedly,
and although UCD’s ofﬁcial membership ﬁgures compared favourably
with other Spanish parties, by European standards membership was
extraordinarily low (70,000 in 1979; 150,001 in 1981).10
This indicates that
the party could certainly not be described as a mass party, and suggests an
extremely superﬁcial penetration into civil society; the implication for leadership
domination should be evident enough. Another important feature of the
mass-bureaucratic party was absent; although reliable ﬁgures on the structure
and size of UCD’s extra-parliamentary central ofﬁce are hard to come by, all
the evidence points to it being relatively small,11
and largely loyal to the party
314 JONATHAN HOPKIN & CATERINA PAOLUCCI
leadership rather than to any putative mass base. The leadership’s freedom of
manoeuvre over electoral strategy was protected by the refusal to commit
UCD to any ﬁrm ideological positions; the party’s ideological documents
were a largely meaningless jumble of ‘warm words’, which failed to address
the potential contradictions between Christian Democrats, Liberals and Social
Democrats (see UCD 1978a,b; García San Miguel 1981). One source
close to the president argued that ‘ideologies are synthetic creations. They
close out options. We want to be open and see no reason why we need an
ideology. (. . . ) The party is where its voters are’.12
In the 1979 election, UCD
conﬁrmed its dominant position with a largely vacuous message based on
valence issues (see UCD 1979), and an appeal to voters’ suspicion of the still
formally Marxist Socialist Party (PSOE). ‘Modern’ American-style campaign
techniques were employed, using publicity agencies and media consultants,
and instead of political rallies, UCD organised youth and children’s festivals
and concerts with pop musicians (García Morillo 1979). The professionalisation
of campaign decision-making was total, and traditional campaigning
rituals such as canvassing and public meetings were largely shunned. The
superﬁcial adherence of UCD voters to the party can be seen in both the large
number of ‘undecided’ voters who eventually voted for UCD, the very low
levels of voter identiﬁcation with UCD throughout its history, and the low
levels of support for UCD between elections revealed by opinion polls and
other survey research (Barnes et al. 1981, 1985).
The UCD had a great deal many more electoral-professional features than
mass-bureaucratic ones (although to an extent this could be seen as inevitable
for a party at this stage of its development). Moreover, the political successes
the party achieved in its short history should not be underestimated: as well
as being the plurality party in two legislative elections and the ﬁrst local elections
in the new democracy, the rapid and relatively trouble-free consolidation
of this democracy owed a great deal to the skilful way in which UCD fulﬁlled
its pivotal role in the transition process. However the period after 1979 saw
the party decline into internal chaos and disintegration, and the process can
give interesting insights into the implications of the electoral-professional or
‘business ﬁrm’ party model.
Crisis and collapse of the business ﬁrm model. This process of disintegration
is particularly interesting as it involved internal conﬂict over party
models, in which different ideal types of party organisation were, implicitly
or explicitly, the focus of internal conﬂict. Certainly ideological differences
and even incompatibilities were at the heart of the disputes, but it was the
absence of consensus over organisational rules that made these differences
insurmountable.13
The crisis emerged initially as a result of Suárez’s series
THE BUSINESS FIRM MODEL OF PARTY ORGANIZATION 315
of political successes grinding to a halt after the negotiation of Basque and
Catalan Statutes of Autonomy in the summer of 1979. Suárez’s government
quickly came under political pressure in the face of an aggravation of the
economic crisis and the intensiﬁcation of political violence in the Basque
Country. The government was criticised from all angles for its failure to respond
to this crisis, and Suárez himself was attacked for appearing to have
run out of ideas. This raises an interesting point worth exploring. Given the
‘business ﬁrm’ party’s lack of ideological orientation and its eagerness to
attract superﬁcial support from broad sectors of society, there is a risk that
such a party can have difﬁculty in setting coherent objectives for political
action, particularly if it has government responsibilities. In the same way as
UCD had been able to win credit from the bulk of the electorate (even those
who voted for other parties) for its successful management of the transition
process, the post-1979 political crisis left UCD with very few committed supporters.
As the political debate moved from very general issues of democracy
and the reform of the state, on which consensus was relatively easy to reach,
to divisive issues of economic policy, administrative reorganisation and social
reform, UCD found itself incapable of sustaining a coherent political line. On
each of these issues, a coherent policy choice ran the risk of alienating some
sector of its support: either the lower-middle salaried class or the business
sector over ﬁscal and monetary policy; either the Castillian centre or the
state periphery over regional devolution; either the secular urban classes or
the Catholic heartlands over social reform. UCD’s inability to make clear
political choices created the worst of both worlds – all sectors of its electorate
were disillusioned by its refusal to provide a political lead.
The business ﬁrm ideal of a lightweight organisation with the sole basic
function of mobilising short-term support at election time compounded the
problems emerging from the lack of a clear political line. The failure of the
party organisation to act as a ‘transmission belt’ meant that no effort was
made to explain or justify party positions amongst voters through an active
membership, nor did the party establish channels through which voter discontent
could be expressed. In Hirschman’s terms, the party made the exercise
of voice prior to exit a costly choice for voters to make, encouraging voters
to show their disapproval by deserting the party at election time. Of course,
it is in the nature of the business ﬁrm model that a greater proportion of the
party’s electorate would be sufﬁciently mobile (in the absence of strong party
identiﬁcation) to exercise the exit option than would be the case in a massbureaucratic
party, making short-term political failures potentially fatal to the
party’s hopes of survival. Whilst the responsiveness of older, institutionalised
parties to their electors should not be exaggerated, and the difﬁculties in establishing
a core electorate early in a party’s history are recognised, UCD’s
316 JONATHAN HOPKIN & CATERINA PAOLUCCI
difﬁculties in setting the process of institutionalisation in motion undoubtedly
exacerbated the effects of its post-1979 crisis.
But perhaps one of the most curious features of the crisis of the business
ﬁrm model in the case of UCD is the conﬂict over party models which found
its expression in the creation of the critical movement of internal opposition
in 1980–81. This movement was in large part an expression of political and
ideological discontent, as it grouped together the more conservative sectors
of the party (particularly the Christian Democrats and Liberals) against the
more centrist sectors supporting Adolfo Suárez. On the surface, therefore, it
could be interpreted as the kind of ideological battle present in any number of
parties, even those showing strong mass-bureaucratic tendencies. What distinguishes
this internal conﬂict is the emphasis placed on party organisation,
and the normative tones which the debate took on. Statements made by a number
of critics suggest that their positions were strongly inﬂuenced by ideal
types of party organisation which they regarded as desirable, either through
contact with academic works on political parties, or more often through their
observations on the way parties organised in established Western European
democracies. Incipient parties made great efforts to achieve international
recognition as the formal representatives of particular ideological positions
in Spain, and faction leaders in UCD had close contacts with the Christian
Democrat and Liberal Internationals. The party politics of European neighbours
exerted signiﬁcant inﬂuence, in part because the stable democracies in
Germany and France were an example that democrats in Spain were keen
to follow, but also because ‘sister parties’ in these countries were eager to
establish good relations with new parties in Spain, and offered practical help
on party building. An example of this is the ﬁnancial and other help given by
the German CDU to Spanish Christian Democrats through the Konrad Adenauer
Foundation.14
Whether or not for this reason, one Christian Democrat
described the organisational debate as follows:
People in the party began to say that this was not the way to organise a
modern political party, and it was not the way to respond to other parties
which were organising themselves in line with organisational models
of the major European political parties. Our model was basically that
of the major Western Christian Democratic parties, which, in modern
times, have become modern ‘popular’ parties, open to broad sectors of
society.15
The same respondent explicitly interpreted UCD’s structures in reference to
Duverger’s model of the cadre party.
The critics’ ﬁrst target was the allegedly arbitrary exercise of power by
the party leader, and the leader’s neglect of the party membership; an appeal
THE BUSINESS FIRM MODEL OF PARTY ORGANIZATION 317
was made for internal democracy in the position document published before
the 2nd party congress in January 1981.16
In a sense what the critics argued
for was a degree of bureaucratisation in the sense of rigorous respect for the
structure of authority laid down in a set of reformed party statutes, the existing
presidentialist statutes having generally been overriden by the overwhelming
authority of the party leader himself. The critics demanded that UCD should
acquire an autonomous existence beyond the requirements of the party leader,
and identiﬁed the centralisation of party power around the leader as a source
of fragility:
The personalistic approach in the statutes has two risks: 1. it hinders
the UCD’s institutionalisation; to expect the party to revolve around the
leader and his circumstances is to condition the UCD’s survival to the
leader’s political fortunes (. . . ); 2. it is a risk for the leader himself, as
it makes him responsible for the positive and negative results of all the
decisions taken.17
What the critics saw as the unpredictable and incoherent line taken by Suárez
could be overcome by tying UCD to both an explicit ideological position and
a set of concrete social interests. These demands could evidently not be met
within the electoral-professional model of party organisation.
However the critics were not arguing for a mass-bureaucratic party as
such. The ultimate aim was for UCD to identify a coherent social base (a
conservative one, in their preference) and for its policy decisions to respond
to the expressed needs of that social base. This position was necessarily inimical
to the catch-all electoral strategy followed by Suárez. But the means of
achieving this link with the conservative social base was not the establishment
of a mass membership party of the traditional kind. Instead the critics hoped
to bind UCD to particular interest groups representative of this social base.
As one advocate of this position explained,
Our party should penetrate into society, absorbing and allowing itself to
be absorbed by the powerful social network which defends legitimate
interests and professes beliefs which are compatible with the way of life
that UCD wishes to promote (. . . ). In this way, the party will acquire
solid roots in society, and become aware of the concerns and problems,
interests and demands of that society. (. . . ) In the same way in which the
Socialist Party could not turn its back on its afﬁliated Trade Union in formulating
an economic policy, we cannot decide our policy on education
without consulting parent-teacher associations, nor can we decide our
economic policy without consulting the business community (Herrero
de Miñón 1982).18
318 JONATHAN HOPKIN & CATERINA PAOLUCCI
Herrero’s proposal would integrate conservative interest groups such as the
business association CEOE and the conservative Catholic parent-teachers association
movement into the party’s structures, binding party policy to the
demands of these groups. Although the electoral-professional model provides
for some relationship with interest groups – largely with the objective of
securing party ﬁnance – the critical project had the opposite aim of reducing
the party’s electoral room for manoeuvre and strengthening links with
a sector of the party’s electorate. This model has been described by Richard
Gunther (1986) as the holding-company model – the party simply serves as
the parliamentary vehicle of a federation of more or less compatible interest
groups, coordinating campaigning strategies in line with the interest groups’
policy demands.
The debate over organisational models is particularly interesting because
it highlights the differing views on the importance of professional technical
expertise in determining party strategy. A key element in the critical project
was the creation of what became known as the ‘natural majority’ – a broad
political alliance between all the groups to the right of the PSOE (essentially
UCD and AP). The problem with such an alliance was that the reactionary
image of AP was likely to alienate a large number of centrist UCD voters,
and was highly unlikely to produce a ‘majority’ of any kind. Extensive data
on the preferences of the Spanish electorate were available to the UCD leadership
through their control over the Centro de Investigaciones Sociológicas,
and therefore the potentially damaging electoral consequences of the ‘natural
majority’ were well-known. For this reason, a Suárez advisor wrote in the
press that
paradoxically the real interests of conservative sectors of Spanish society
will not be best defended by a more conservative UCD. (. . . ) Pushing
UCD into profoundly conservative positions means leaving too large a
political space open to the Socialists, who have adopted a very intelligent
strategy consisting of moderating their political message (Gámir 1981).
The electoral opportunity structure in Spain at this time, as in 1977–79,
rewarded broad, centre-oriented parties. For all UCD’s weaknesses, it still
appeared the most appropriate vehicle through which the Spanish right could
defend its positions. In spite of the evidence, however, UCD conservatives
pushed for, and eventually achieved, the creation of a broadly conservative
force capable of dominating the political space to the right of the PSOE.
After losing the 1982, 1986, 1989 and 1993 elections, this force, renamed
as the Popular Party (PP) in 1989, has recently become the largest Spanish
party (by a margin of 1.4% and 15 seats) in the 1996 elections. That this
party took so long to recapture the position held by UCD in 1977 and 1979,
THE BUSINESS FIRM MODEL OF PARTY ORGANIZATION 319
and that even now its parliamentary representation is only sufﬁcient to form
an uncomfortable (non-formalized) coalition government, suggests that the
critics and their external supporters made a serious strategic error.
Party models and party collapse. The failure to ﬁnd common ground between
the advocates of the two differing conceptions of what kind of party UCD
should be brought effective party action to a halt, and pushed UCD into an
accelerated process of decomposition. The collapse of the party was not the
result of the ﬂaws of any one model, but the consequence of conﬂict arising
from the failure to agree over a party model, which exacerbated underlying
ideological tensions. Two sets of conclusions are suggested by this analysis.
First of all, the UCD’s collapse, although it cannot be accounted for solely in
terms of the business ﬁrm or electoral-professional model of party organisation,
does indicate certain risks involved in applying this model to the reality
of party politics. The weakening of electoral links inherent in this approach
renders parties extraordinarily vulnerable to the consequences of short-term
political failures, whether or not these failures are due to internal conﬂict. By
refusing to establish and protect a core electorate, business ﬁrm parties deny
themselves the cushion of loyal voters which can help parties survive periods
of crisis.19
Similarly, the UCD’s experience suggests that deideologisation,
if taken too far, can disorient an organisation rendering coherent collective
action impossible. The strengthening of leadership authority makes parties
dependent on the abilities and successes of their leaders; in cases of leadership
failure, the absence of a mass base to pressurise the leader for change, or even
to force the leader’s substitution, denies parties a useful safety valve. Finally,
it indicates that party ﬁnances dependent on ad hoc contributions from varied
interest groups can be an unstable form of ﬁnance; ultimately the business
sectors who had backed UCD in 1977 and 1979 withdrew their support in
protest at Suárez’s refusal to follow their instructions on economic policy,
and these sectors’ support of the critical movement was a fundamental cause
of the party’s internal conﬂict leading to its disintegration.
Second, the case of the UCD’s collapse provides interesting evidence on
the validity of competing theoretical models of party behaviour. The behaviour
of UCD leaders, for various reasons, simply did not correspond to the
‘self-interest axiom’ suggested by rational choice theorists as the basis for
the explanation of party behaviour. Critics such as Oscar Alzaga and Miguel
Herrero pushed for, and eventually achieved, a reorganisation of the Spanish
centre-right which excluded the interests they defended from public policy inﬂuence
for 14 years. On an individual level, very few of the UCD critics (and
none of their leaders) will beneﬁt, in terms of power positions, from the right’s
recent electoral victory; ironically, two of the most signiﬁcant ex-UCD ﬁgures
320 JONATHAN HOPKIN & CATERINA PAOLUCCI
in the PP were Suárez supporters in 1980–82.20
Adolfo Suárez’s departure
from UCD in July 1982 to form his own party (the CDS) is equally difﬁcult
to fathom in terms of the self-interest axiom – by leaving UCD he effectively
guaranteed its dissolution, yet the CDS aimed to perform a function practically
indistinguishable from that performed by UCD. Again, Suárez remained
excluded from political power for the rest of his career. These decisions, as
Richard Gunther has pointed out, can only be interpreted as the subordination
of vote maximisation and ofﬁce-seeking to other political objectives, such
as ideological self-deﬁnition and freedom of political expression, objectives
which rational choice theories of party organisation have tended to ignore
(Gunther 1989). This suggests that in real politics the business ﬁrm model
– whose effectiveness in securing internal cohesion depends on party members
behaving as Downsian power-seekers – could exacerbate internal conﬂict
rather than subduing it.
The business ﬁrm as party: Berlusconi’s Forza Italia
The case of Forza Italia is probably the most extreme example to date of
a new political party organising as a business ﬁrm (Diamanti 1995; Panebianco
1995). In Forza Italia the distinctions between analogy and reality are
blurred: the ‘political entrepreneur’ in question is in fact a businessman, and
the organisation of the party is largely conditioned by the prior existence of
a business ﬁrm. Yet the importance of Forza Italia in the present Italian party
system suggests that its peculiar characteristics should not be dismissed as an
aberration. What follows is a preliminary attempt to analyse the implications
of this phenomenon in the light of the preceding discussion on party models
and the experience of the Spanish UCD.
The genetic model. It is not our intention here to provide a systematic comparison
between UCD and Forza Italia (FI), and it is important to recognise that
they emerged in quite different political circumstances. The collapse of the
Italian ‘First Republic’, whilst providing opportunities for extensive changes
in the Italian party system and allowing the entry of new political actors,
did not leave a political vacuum comparable to that left by Franco’s death.
The continuous period of albeit at times unstable democracy in post-war Italy
means that a number of political routines and norms have been established
that the changes of the 1990s are unlikely to alter. However, the contexts in
which UCD and FI emerge do have some interesting features in common
(Pasquino 1995).
Whilst Suárez and the UCD attempted to provide a way for the supportbase
of Francoism to hold on to power by democratic means after the collapse
THE BUSINESS FIRM MODEL OF PARTY ORGANIZATION 321
of a discredited dictatorship, Berlusconi and FI emerged as a way of ensuring
that the Italian left was not the immediate beneﬁciary of the collapse of the
Christian Democrat-Socialist alliance which had ensured basic continuity in
Italian government since the 1960s. In this sense both parties had to navigate
a delicate balance between continuity and reform. The mani pulite investigations
in Italy discredited the parties representing the status quo, leaving a
large number of conservative, or at least anti-communist, voters in a state of
confusion.21
The Northern League,22
and to an extent the neo-/post-fascist
MSI (in the process of becoming Alleanza Nazionale),23
beneﬁtted from this,
but neither appeared capable of hegemonising the political space left empty
by the demise of the DC and PSI. Both the League and the hard right were,
essentially, anti-system parties unlikely to attract those sectors of the DC-PSI
electorate who were afraid of radical change and political instability (Morlino
1996: 9).
Berlusconi’s emergence as a ‘political entrepreneur’ can be explained
in part by this political opportunity structure highly favourable to a new,
but basically conservative, political party, untainted by involvement in the
pentapartito system, which could offer political change and renewal with
reassurances that existing privileges would be protected. At the same time,
these conditions did not ‘cause’ the creation of Forza Italia: Berlusconi’s
entry into politics was also an intentional act responding to powerful private
motives. The construction of his business empire Fininvest, and in particular
his dominance of commercial television through Mediaset, had been achieved
in part through effective use of high level political contacts, such as his close
friendship with Bettino Craxi (McCarthy 1996). The collapse of the political
order dominated by Craxi’s PSI and the DC left Berlusconi politically
exposed at a time when he faced a serious debt crisis, and there was a risk
that a left-wing government would take steps to reduce his near-monopolistic
control of commercial television. Hence, originally FI was little more than
a personal instrument, created for this speciﬁc private purpose: to win the
elections in order to prevent a hostile left from jeopardising Berlusconi’s own
economic empire.24
Not unlike Suárez, Berlusconi took steps to legitimise his political project,
as well as coopting potential rivals, by integrating other groups on the centre
and right into a broad, although anomalous coalition: in the south together
with Alleanza Nazionale (AN), FI formed the Good Government Alliance
(Polo del Buon Governo); in the north, together with the Northern League,
it created the Freedom Alliance (Polo delle Libertà). Both alliances owed
more to each participant’s strategic advantages than their ideological proximity
or even compatibility (Di Virgilio 1994: 509). The Polo also integrated
conservative Christian Democrats (the CCD), Liberals (UdC) and libertarian
322 JONATHAN HOPKIN & CATERINA PAOLUCCI
radicals (Riformatori, the former Radical Party). Cooperation between these
extremely heterogeneous groups was facilitated by the dominant position held
by Berlusconi in the political game. This dominant position was due to his
possessing important political resources characteristic of the leadership of
the business ﬁrm party: personal popularity, organisational advantages, and
crucially, access to unlimited professional expertise in mass communications.
At its origins, Forza Italia, the pivotal force of the Polo, brings together
with remarkable clarity the characteristics of the party model which has
been described here as the business ﬁrm party. Although the Forza Italia
project formally began in the autumn of 1993 with the establishment across
the national territory of around 4000 Forza Italia ‘Clubs’, aimed at mobilising
public opinion in favour of a vaguely neo-liberal project (Paolucci &
Barbesino 1994; Farrell 1995), the real creation of the party came with the
calling of general elections for the end of March 1994. In a fashion not dissimilar
to the creation of UCD, the emergence of FI as a political force came
with the selection of parliamentary candidates able to stand in the elections
as representatives of the Berlusconi project. The fundamental nature of FI
as an ‘electoral machine’ (Diamanti 1995: 75) is indicated by the blatant
marginalisation of the clubs from the real centres of power in FI as soon
as the electoral campaign was over, and the lack of interest shown by Berlusconi
in promoting membership participation thereafter. On the contrary,
in order to preserve the leader’s freedom of manoeuvre. Berlusconi’s circle
quickly elaborated a strategy aimed at preventing any participatory drive or
the constitution of a responsive, bottom-up structure.
Forza Italia’s original statutes consisted of just 19 articles, and were immediately
‘suspended’ for three years, leaving the organisation under the
untrammelled control of its leader (Poli 1997: 83). Just to make sure, a formal
separation of grass-roots activists from the leadership was established. The
party was structured into two separate, largely non-communicating parts:
the political movement and the clubs movement (a move equivalent to a
traditional party separating local sections from the rest of the organisation).
From the very beginning, contacts between the two structures were extremely
difﬁcult, mediated as they were by the clubs’ supervising body, ANFI (Associazione
Nazionale dei Clubs di Forza Italia), whose top executives had been
personally appointed by Berlusconi, rather than elected by the clubs themselves.
The ANFI Coordinator’s membership of the Executive Committee of
the political movement was the only instance of formal contact between the
two structures. But since ANFI’s Coordinator was a top manager of the Fininvest
group, it could hardly have been expected that he be more responsive
to the clubs than to the party leader, who had personally appointed (and later
discharged) him, and who happened also to be his employer. Moreover, and
THE BUSINESS FIRM MODEL OF PARTY ORGANIZATION 323
not by chance, the clubs were not even mentioned in the party statute, while
within ANFI no representative mechanisms were prospected: clubs had no
power over their territorial coodinators, who are mostly Programma Italia
agents (see below) nominated by Berlusconi. The clubs’ tasks were initially
vague and unstructured, and they were certainly not expected to perform the
political and social functions of the classical territorial units of mass membership
parties. On the contrary, after the 1994 elections their activities subsided,
membership ﬁgures declined, and their network became virtually irrelevant to
the life of the political movement.
Forza Italia’s genetic model also reveals another characteristic trait of the
business ﬁrm party: a high degree of centralisation of power around the party
leader. The original statutes provided for a very simpliﬁed structure centred
around the Members’ Assembly, which would formulate policies and elect
a kind of executive committee, the Council of the Presidency (Comitato di
Presidenza). The name suggests a group of advisors to the party leader, rather
than an arena for collective decision-making. Despite having been announced
by the constitutive act, the special regulations which should have shaped the
organisation by conﬁguring its internal functions and deﬁning the competences
of party bodies were never issued, and the party’s normative density and
complexity therefore remained very low. The Assembly never gathered, and
the Council of the Presidency, instead of being elected, was initially entirely
coopted by Berlusconi, who ﬁlled it with people from his entourage (lawyers
and managers from Fininvest), adding a couple of external academics
or otherwise well known personalities, mainly to convey the impression that
the party was not totally dominated by Berlusconi’s ‘clan’ (see Gilioli 1994).
Nevertheless, even this very small body did not formally meet on more than
a handful of occasions, indicating that decision-making and strategy elaboration
were taking place outside ofﬁcial party channels. Indeed, Berlusconi’s
mansion in Arcore, near Milan, as well as, later on, his Rome apartment, were
the nerve centres of the organisation. Here, informal meetings were called by
Berlusconi as President of FI, which were hardly distinguishable from those
he would call as President of Fininvest.
The organisational confusion between Fininvest and Forza Italia characteristic
of the party’s genetic model was the key to its internal dynamic. Party
strategy was elaborated by an ‘inner circle’ of Berlusconi’s closest collaborators
and friends, a group held together by admiration and loyalty towards
Berlusconi, and accustomed to working under his leadership: the two VicePresidents
of Fininvest, the President of Publitalia, a number of Fininvest
managers, and a Mediaset TV celebrity. The strategies elaborated within this
leading group were in turn implemented by three different sub-groups of
Fininvest managers. Forza Italia’s political marketing, a fundamental element
324 JONATHAN HOPKIN & CATERINA PAOLUCCI
in determining party strategy, was carried out by Diakron, an opinion polling
agency set up by two former Fininvest managers and staffed by Fininvest employees
who had been working in the ﬁeld of marketing research. Programma
Italia (a branch of Fininvest dealing with mutual funds), was charged with
setting up the network of Forza Italia Clubs, using its extensive nationwide
sales network. ANFI, charged with coordinating the activities of the Clubs,
was founded in November 1993 by the former manager director of Fininvest
France. Finally, Publitalia 80, the branch of Fininvest specialised in commercial
advertising, directed the process of candidate recruitment and selection
by mobilising the network of commercial contacts they had created in over
ten years of business activity.
Several of the Fininvest managers ‘loaned’ in this way to the partyelectoral
committee during the 1994 electoral campaign were to remain in
FI, forming the backbone of an extremely centralised and non-bureaucratic,
‘slim’ organisation. This was actively enhanced by the initial refusal to issue
membership cards or call a party conference. ‘Territorial coordination’
continued to be carried out in a centralised fashion by the 20 Regional Coordinators
named by the leadership, largely Publitalia managers who had
been responsible for the creation of Forza Italia (essentially the process of
candidate selection) in the various Italian regions prior to the 1994 elections.
The national headquarters of the political movement were staffed by less
than thirty employees, working under the direction of the national organisational
coordinator, a ﬁgure not provided for in the statute, and unlikely to
exercise any authority. Decisions were taken within the restricted circle of
Berlusconi’s ‘friends’. All the evidence points towards FI being a centralised,
leader-dominated, ﬁrm-centred political organisation at its origin, a model
described by the ﬁrst party organisational coordinator, Cesare Previti, as a
‘partito leggero’ (‘light party’).
Winning votes: The political message and the electoral base. As far as deideologisation
is concerned, FI differs from UCD in a number of key respects.
First of all, perhaps because of the contrasting political context of FI’s creation,
there was little attempt by Berlusconi to win over moderate left-wing
voters. Rather than a strictly catch-all, non-ideological strategy, FI started
by fostering the formation of a moderate coalition of liberal personalities
from the world of business, journalism, and the liberal professions in order
to attract centre-right voters, and put a halt to the dissolution process
affecting the right, which would have secured the electoral victory of the
‘(ex)-communists’. Indeed, FI was initially set up not as a new party, but as a
pressure group aimed at sponsoring the selection and the electoral campaign
of a team of neo-liberal candidates, which would be offered as a ‘package’
THE BUSINESS FIRM MODEL OF PARTY ORGANIZATION 325
to politicians of the centre who had survived the corruption inquiries, much
as any other ﬁnancial or advertising package would be offered to Fininvest
clients. After a series of hectic negotiation rounds between December 1993
and the beginning of January 1994, the agreement with the centre failed to
take place (Di Virgilio 1994: 504–511). Only at this point did Berlusconi
decide to ‘take to the ﬁeld’ in person, at the head of the FI candidates and
clubs: the party was founded on 18 January 1994, 60 days before the elections
(Revelli 1994: 667).
During the ﬁrst phase of candidate selection for the neo-liberal project,25
Giuliano Urbani, a political scientist at the Bocconi University in Milan,
elaborated the program, which was circulated among entrepreneurial and intellectual
circles, and ﬁnally published in the form of an Appeal (‘In Search
of Good Government: Appeal for the Creation of a Winning Italy’). Its catchwords
were those of new right liberalism, with talk of slimming down the role
of the state, measures to encourage private enterprise, and tax cuts. However,
no group of functionaries or beneﬁciaries of state largesse were identiﬁed
as targets for spending cuts, and indeed Berlusconi soon claimed to have
found a previously undiscovered ‘trick’ which permitted taxes to be cut, the
deﬁcit to be reduced and spending commitments to be maintained. In fact, FI
deﬁned itself rather more in negative terms, as an anti-communist movement,
identifying the post-communist PDS as its chief political opponent. To this
extent, an appeal to the Catholic commonplaces of family life conﬁrmed that
the target electorate was the space to the right of the PDS.26
Nevertheless, once the decision to ‘take the ﬁeld’ had been taken, FI’s
campaign strategy in the 1994 election became generally extraordinarily consistent
with the electoral-professional model of party behaviour. The name
itself (Forza Italia means ‘come on Italy’), a chant previously available to
anyone cheering on the Italian national football team, was shamelessly appropriated
as the exclusive property of a political candidate. The attempt was
to associate Berlusconi with a kind of patriotism which in Italy has often been
most evident in the successes of Italy’s football team, an association helped
by Berlusconi’s position as chairman of AC Milan. In similar style, he refers
to his party as gli azzurri (‘the blues’: the name given to the Italian national
football team). Given the enormous popularity of football in Italy, this was a
conscious attempt to present FI as the party of the whole nation, rather than
of any particular social class or grouping. Similarly, Berlusconi was at pains
to portray himself as a representative of ‘il nuovo’ (Farrell 1995) – a new man
untainted by the corruption and inefﬁciency of past governments. Criticisms
of his way of operating were rebutted as belonging to ‘old ways of doing politics’;
the evident differences in style between the dynamic if unsophisticated
entrepreneur and the Machiavellian manoeuvrings of the existing political
326 JONATHAN HOPKIN & CATERINA PAOLUCCI
class were constantly emphasised.27
The electoral programme, presented to
the public during a Convention in Rome on February 6 1994, was articulated
as a kind of neutral shopping list of solutions to practical problems, rather
than a political manifesto.
Moreover, a picture of FI electorate’s socio-economic composition shows
a striking lack of a dominant social type: the vote for FI has been cast by
‘all kinds of people, no matter which age group or social condition. The
average socio-economic proﬁle of FI voters does not differ very much from
the average proﬁle of the whole electorate’ (Mannheimer 1994: 35). Indeed,
this proﬁle can be regarded as its deﬁning trait. As Ilvo Diamanti (1994: 666)
has suggested, ‘FI’s speciﬁc identity lies in this ‘average’ character’. Accordingly,
FI would represent ‘average society (. . . ) rooted in traditional values
and institutions, like family, market and Church, and driven by a demand for
‘law and order’ and stability’. The predominant values and attitudes of FI
voters resemble those of the population at large, albeit with some signiﬁcant
differences: higher support for territorial decentralisation, higher trust in the
North of the country, stronger endorsement of private enterprise, very high
trust in small businessmen and their capacities, and a very strong affection
for, if not identiﬁcation with, Berlusconi’s TV channels. The lack of both
an ideologically argued program and an identiﬁable social base indicates
that the prevailing logic pursued by FI has been very much one of electoral
competition, rather than of constituency representation (Kitschelt 1989).
Perhaps the most striking aspect of FI as an electoral-professional party
was the unprecedented role of professional marketing experts in designing the
party’s political message. Here the ready availability of Fininvest specialists
made professionalisation a relatively inexpensive and straightforward process.
Moreover, Berlusconi’s extra-political knowledge and resources were of
crucial importance in the exploitation of the available opportunity structure:
they allowed him to tailor his political project to appeal to speciﬁc targets,
and market it successfully. The ‘Forza Italia product’ was indeed ‘sold’ with
the aid of techniques usually adopted for the promotion of merchandises. Two
subsidiaries of Fininvest, Diakron and Publitalia, performed the role reserved
in traditional parties for party conferences and executive committees. Diakron
provided Berlusconi with extensive opinion poll data on what kind of
message could attract ex-DC/PSI voters, and all of FI’s policy positions were
elaborated on the basis of these data (Farrell 1995: 46–47). Far from using
marketing techniques in order better to present party policy, in the case of
FI party policy derived directly from market soundings (Revelli 1994: 669).
Downs’s famous statement that ‘parties formulate policies in order to win
elections rather than win elections in order to formulate policies’ has rarely
been a more accurate description of a party’s behaviour.
THE BUSINESS FIRM MODEL OF PARTY ORGANIZATION 327
In addition to the use of monitoring devices for internal strategic design,
the employment of survey information in actual political communication
indicates a highly professionalised and managerial approach to politics. Opinion
polls have been strategically used as resources in bargaining with allies or
in competing with rivals, insofar as they serve to attribute high levels of support
which cannot be veriﬁed until the real poll takes place. The continuous
publication and citation of opinion polls showing the astonishingly rapid rise
and continuous upward trend of Berlusconi’s popularity was functional to the
need of visibility of an entirely new political force, but it also attracted more
and more voters onto the virtual winner’s side, with the typical band-wagon
effect well known to marketing experts. Moreover, the high level of support
for FI revealed by polls data was used in the infra-coalitional negotiations
about the division of electoral districts. The virtual winner FI managed to
place its candidates in some 35% of the electoral districts in the south (agreement
with AN) and in 30% of the districts in the north (agreement with the
Northern League) (Di Virgilio 1994: 522–525). Forza Italia’s political marketing
has made extensive use of focus groups, now well established as part of
the electoral armoury of Anglo-Saxon political parties.28
The issues raised in
the groups were subsequently monitored by Diakron’s opinion polls, allowing
FI to update political strategies and shape issues more efﬁciently than its
political rivals. Moreover, Focus Groups provided Diakron with samples of
the language and way of thinking of ordinary people, which directly entered
Berlusconi’s communication strategy.
Another important element of professionalisation was, of course, the use
of modern mass communications techniques, in particular television advertising
and the manipulation of news services on Berlusconi’s commercial
television stations (Morlino 1996: 12). The extent of the political bias present
on Fininvest channels was and still is remarkable by any standards, and has
extended beyond the manipulation of political information to the recruitment
of popular light entertainment ﬁgures to campaign for FI in their game shows.
This use of television raises interesting points about party organisation.
First of all, as is well-known, the ability of television to project a charismatic
leadership image cost effectively in the homes of the vast majority of
electors reduces the need for a mass membership to canvass supporters with
traditional labour-intensive methods. The effective internalisation of television
broadcasting into the party structure itself takes this tendency a step
further. In FI, the search for support was almost entirely carried out on televisions
either owned by Berlusconi, or linked to Fininvest through business
contracts. At the local level, a hundred local TV stations already connected to
Fininvest were offered free programs in exchange for free time for political
advertising. At the national level, FI spent 80% of its advertising budget on
328 JONATHAN HOPKIN & CATERINA PAOLUCCI
the three Fininvest channels. The leader of the opposing coalition, Occhetto,
received only 25% of the airtime dedicated to Berlusconi on the Fininvest
channels. The importance of television is conﬁrmed by the training Publitalia
representatives gave to FI candidates. Potential candidates, generally young,
professionally established and successful, and usually with little political
experience, had to follow courses in speaking in front of TV cameras, and
received written evaluations of their video performance and overall image.29
In sum, Berlusconi’s approach to politics has been entirely marketing driven:
FI once again ﬁts perfectly within the electoral-professional model, which
suggests that these highly professionalised new techniques imported from
business ﬁrms are becoming increasingly decisive in political competition.
Second, the ease with which television can manufacture a charismatic
leadership image when the necessary expertise is available suggests that ‘topheavy”
parties, consisting of little more than a parliamentary elite and a
skeletal territorial structure, are becoming increasingly viable alternatives to
mass membership parties (notwithstanding FI’s eventual abandonment of the
original ‘partito leggero’ model – see below). FI’s links with the electorate
and society are fragile and ﬂuid, and dependent on the use of the mass media
to an extent unprecedented in a Western democracy (Diamanti 1995: 75).
Ownership of mass media, in its turn, increases the manipulative potential of
communications experts (Statham 1996b: 91). FI’s success is indeed mainly
due to the expertise applied by Fininvest managers to the construction and
diffusion of the image of their leader and employer (see Seisselberg 1996).
Due to the control he could exercise on his networks, Berlusconi, unlike his
competitors, was able to plan his own video appearances, and make use of
all the sophisticated techniques available in his studios in order to achieve the
best results. Berlusconi was presented as a ‘natural leader’, an individual who
had achieved success as the carrier of special personal qualities, which were
presented as the right ones to achieve the mission he had charged himself
with, namely the fulﬁlment of a ‘new Italian miracle’. With the consultancy
of political and media experts and social scientists, Berlusconi combined the
advantages of the business-ﬁrm party with those of charismatic authority:
on one hand, he exploited his position of ownership to create the central
nucleus of the party via cooptation of existing loyalties. On the other hand, he
constructed a charismatic image, to extend the appeal of the party far beyond
the ﬁrm’s boundaries.
Limits of the business ﬁrm model: Forza Italia after the 1996 elections. The
organisational characteristics of the Berlusconi project suggest than in its
initial phase Forza Italia, rather than the party as business ﬁrm, was in fact
the business ﬁrm masquerading as a party. The existence of a ready-made
THE BUSINESS FIRM MODEL OF PARTY ORGANIZATION 329
and efﬁcient network of representatives through Publitalia meant that FI had
no pressing electoral need to establish any territorial structure autonomous
of Fininvest, and indeed Berlusconi was extremely reluctant to countenance
the creation of a structure which could acquire a life of its own, thus curbing
his freedom of manoeuvre. In the ﬁrst two years of FI’s existence the party
structure persisted unchanged, despite outside criticism and internal protests.
Due to the astonishing success of the original organisational pattern, there
was little incentive to change this structure of electoral committees centred
around a powerful leader, working according to the business ﬁrm prototype.
The Forza Italia case therefore suggests that the pressures towards
electoral-professional models of party organisation can, in exceptional circumstances,
lead to political representation being taken on by organisations
which bear little resemblance to political parties in the accepted sense. For
example it has been argued that FI’s organisational model was inspired ‘by
the power structure of a modern capitalist corporation’ (Farrell 1995: 45–46).
Whilst in the case of UCD the party’s organisational structure clashed with
some party members’ visions of what a political party in a modern democracy
should be, in the case of Forza Italia traditional democratic models of party
organisation served as a ‘counter-model’. The model adopted stemmed from
a belief in the organisational superiority of the private business ﬁrm, which
is reﬂected in turn in FI’s emphasis on modern entrepreneurialism as an effective
substitute for a discredited political class composed of professional
politicians, academics and lawyers. The participatory functions of political
parties, and their penetration into society, were rejected.
This aroused bitter discontent among those parliamentarians and activists
who had entered the party on non-patrimonial grounds. But these ‘outsiders’
were denied effective voice within the party; the FI elite refused to negotiate
party strategy, as this would suggest a move to more participatory procedures.
The exit option was the only viable alternative to loyal behavior, in a context
where no-one within the party had the organisational strength to challenge the
leader and his circle. The limited membership (some 5000 membership cards
issued during the 1994 campaign were subsequently cancelled) and absence
of independent internal decision-making bodies made it impossible for those
outside the corporate structure to exert any inﬂuence within the party. Critics
argued in favour of decentralisation, a party conference, a comprehensive
party statute, clear hierarchies and the ‘de-ﬁninvestisation’ of FI. They argued
that the party should acquire an autonomous existence from the leader and
his business-ﬁrm, and identify social interests to be represented, in fruitful
interaction with interest groups.
If a change in organisational strategy did ultimately occur this was largely
due to the series of political and electoral failures Forza Italia suffered
330 JONATHAN HOPKIN & CATERINA PAOLUCCI
between late 1994 and 1996. The ﬁrst and most obvious was the fall of
the Berlusconi government in December 1994 after the Northern League
abandoned the Polo and withdrew its parliamentary support. Although this
event was not directly related to FI’s organisational characteristics, the loss
of government power and the passage of Forza Italia to parliamentary opposition
favoured organisational change by allowing the party leadership to
concentrate on party, rather than government, matters. More directly related
to organisational concerns were the party’s electoral failures. Forza Italia’s
poor results in the regional and local elections of April 1995 compounded
the political failure of Berlusconi’s exit from government, and demonstrated
the limitations of the televisual leader-oriented strategy. Without a presence
‘on the ground’, Forza Italia was at a clear disadvantage in local politics, and
the realisation of this led Berlusconi to embark on a process of reorganisation
of the party’s structure. This process, accelerated by the Polo’s defeat in the
1996 legislative elections, saw Forza Italia adopting, in a sui generis fashion,
some of the more traditional characteristics of political parties, including a
party Congress, held in April 1998.
The ﬁrst attempt at organisational transformation, the establishment of
a so-called ‘partito dei militanti’ (party of activists), revealed Berlusconi’s
recognition of the need for some kind of grassroots party base (Poli 1997:
94–100). The project envisaged the recruitment of 300,000 promotori (‘promoters’),
who would guarantee the party’s presence in all the administrative
units of the state down to communal level, and coordinate party fund-
raising.30
At the same time, the aspiration of the ‘partito leggero’ persisted,
in that it was intended to avoid the emergence of an unwieldy bureaucratic
territorial structure. Moreover, central control would be maintained: despite
early suggestions of candidate selection through ‘primaries’ of FI sympathisers,
the party’s centralised structure was maintained through the expedient
of party ofﬁcials being nominated by their immediate hierarchical superiors,
and the persistence of the dominant role enjoyed by the 20 regional coordinators.
The hope was that the high level of commitment and activism of the
‘promoters’ would obviate the need for complex territorial structures and
mass memberships. The hope was soon proved unrealistic, but it did suggest
a move towards more traditional models of party organisation.
The most recent developments have pointed towards Forza Italia acquiring,
at least superﬁcially, some of the organisational features of traditional
party models. In 1997, the leadership ﬁnally accepted that some kind of party
membership base was required, launching a membership drive which resulted
in an ofﬁcial ﬁgure of 140,000 members (Poli 1997: 106). There is good
reason to believe that this ﬁgure is inﬂated: apart from traditional unreliability
of ofﬁcial party membership ﬁgures, FI’s lack of territorial structures to
THE BUSINESS FIRM MODEL OF PARTY ORGANIZATION 331
coordinate such a drive and the high cost of joining (100,000 lire) suggest that
such a ﬁgure may be optimistic. In any case, 140,000 members is a very low
ﬁgure for a nationwide party in a country the size of Italy. The leadership’s
determination to maintain its control of the organisation is demonstrated
by the decision to register party membership centrally rather than through
the territorial subunits. The membership base has served to elect (through
117 provincial assemblies) half the delegates to the ﬁrst national Congress,
the other half consisting of 1372 elected representatives in the national and
European parliaments and the regional and local councils. Whilst for the
moment it is difﬁcult to draw deﬁnitive conclusions about Forza Italia’s organisational
development, the Congress itself provides some indications of
how far it has progressed away from the pure business ﬁrm model.
The timetable of the Congress is worthy of attention. The event opened
on the afternoon of the 16th April 1998, with welcome speeches by local
representatives and a major speech by the leader Berlusconi, setting the tone
of the Congress. The Congress closed in the afternoon of the 18th April with
a march of Forza Italia sympathisers ending in Piazza Duomo in the centre of
Milan, where Berlusconi gave another keynote speech. In between only a day
and a half was left for the debates on the Congress motions, where the ofﬁcial
documents were all approved without serious discussion, and the elections
to party ofﬁces were held. Although lack of debate, stage management and
leadership domination of proceedings are characteristic of party conferences
of most mainstream parties in Western democracies, the lack of time reserved
for debate and speeches by grassroots representatives, and the opening and
closing speeches by the leader, make Forza Italia’s ﬁrst Congress quite exceptional.
Moreover, although there is nothing surprising in Berlusconi being
elected ‘by acclamation’ without a real competition for the party presidency,
the election of the Council for Presidency is worthy of attention. This body, in
theory functionally equivalent to a mass party’s executive committee, consists
of 21 members, of which only six are elected by the Congress: nine are members
by right, by virtue of their holding important elective posts or speciﬁc
party responsibilities, and six are simply nominated by Berlusconi. Whilst it
cannot be pretended that most mass parties are particularly democratic in their
internal functioning, Forza Italia retains an exceptional level of leadership
domination by any standards.
This necessarily cursory overview of Forza Italia’s brief history suggests
that in its present form it will have difﬁculty surviving any longer than its
leader’s interest in politics. To a much greater extent than UCD, FI’s raison
d’être is to support the political candidacy, and to a signiﬁcant degree the
private interests, of its leader. Whilst political parties founded on the basis of
more or less charismatic leadership have on occasion survived the leader’s
332 JONATHAN HOPKIN & CATERINA PAOLUCCI
departure (a good example being the Gaullist party in France), for this to
happen the leader must incarnate some broader political idea or social identity.
Berlusconi, for all his ability to appeal to certain social groups, seems to
represent the interests of his business empire rather than the interests of any
broader social collective. Indeed it has been suggested that he has difﬁculty
even in grasping the differences between a political system and the world
of business (Panebianco 1995b). This is clearly not an adequate social base
for the institutionalisation of a political party, and unless FI establishes some
kind of independent presence capable of surviving a putative departure of
Berlusconi from political life it is difﬁcult to imagine it forming a durable
part of a stable party system.
Conclusion
The considerations outlined above are a preliminary examination of the consequences
for democratic governance and party politics of what has been
referred to as the business ﬁrm model of party organisation. Although the
two parties examined here are very different, and the reasons for UCD’s
collapse go well beyond those features which approximate it to the business
ﬁrm model, the comparison does, we believe, prove instructive. The most
reliable conclusion that can be drawn is that the consequences of business ﬁrm
types of party organisation are much more far-reaching in new parties lacking
the organisational inertia to counteract pressures towards professionalisation.
Although parties with the traditional characteristics of a mass membership
and some form of extraparliamentary bureaucracy still dominate in Western
Europe (notwithstanding changes in the roles of grassroots members and
party bureaucrats; see Katz & Mair 1995), there is evidence to suggest that
conditions in contemporary Western democracies are rather unfavourable to
the establishment of traditional party forms ‘from scratch’. If this is the case,
then we are likely to witness the creation of more business ﬁrm parties, particularly
if the Italian experience of party system upheaval is extended to other
Western democracies. The two cases examined here provide the basis upon
which to explore the implications of the business ﬁrm model and offer some
tentative suggestions as to its consequences.
In broad terms, the business ﬁrm model tends to undermine the institutionalisation
of parties and party systems, and evidently this is a more
serious matter for newly created parties in new or rapidly changing democracies.
Traditional mass parties have based their institutional solidity upon
the bureaucratisation of their internal structures, which creates a body of party
members with a vested interest in the party’s survival, and the establishment
of an ‘electorate of belonging’, a coherent social base which the party priv-
THE BUSINESS FIRM MODEL OF PARTY ORGANIZATION 333
ileges in its political discourse and its impact on public policy, receiving in
return a stable supply of electoral support (Panebianco 1988). Business ﬁrm
parties enjoy neither of these sources of stability. Party bureaucracies are kept
to a bare minimum, with technical tasks often ‘contracted out’ to external
experts with no ties to the party. Grassroots membership is also limited, with
a high proportion of party members being ofﬁceholders who see the party as
a vehicle for acquiring political positions, rather than an end in itself. In the
event of serious political setbacks such as the loss of government power, the
business ﬁrm party can ﬁnd itself reduced to a shell and unable to continue
functioning, as was the case of the UCD in 1982. Moreover, the absence of a
loyal core electorate makes such political setbacks far more likely. If a party’s
electoral strength is an expression of voters acting as ‘consumers’ rather than
‘identiﬁers’, short term political problems can result in hefty electoral losses,
again as in the case of the UCD after 1979. Of course, such an outcome is not
inevitable: a business ﬁrm party can enjoy continued successes in mobilising
support. However, its continued electoral survival is less predictable than that
of a traditional party with a well-deﬁned ‘hunting ground’. This is not only
a problem for the business ﬁrm party itself, but also for the party system
in general; party identiﬁcation, like brand loyalty in the market for consumer
goods, stabilises the party system and allows competition to take place
without causing the immediate destruction of the losing parties (Hirschman
1970).
The two cases examined here also offer insights into the role of ‘political
entrepreneurs’ in business ﬁrm parties. The high levels of centralisation of
control over resources characteristic of the business ﬁrm party place particular
responsibility for the party’s survival on the shoulders of its leader. One of
the principal reasons for UCD’s internal upheavals and electoral failures after
1979 was the decline of Adolfo Suárez as party leader. The initial creation of
the party was strongly conditioned by the dominance of Suárez’s leadership
and his control of important organisational and political resources, and it was
these resources which permitted him to construct a ‘light party’ despite the
opposition of his internal rivals. Suárez loss of electoral popularity, and the
end of the transition phase which had provided him with an exceptionally
powerful tactical position, disturbed the balance of power inside the UCD and
undermined the party’s electoral support (Hopkin 1999, forthcoming). Forza
Italia is similarly dependent on its founding leader. Although Berlusconi’s
success as a political leader is not only the result of his control over commercial
television, it is legitimate to ask whether his leadership could survive
the loss of his media interests; and if Berlusconi’s leadership, for whatever
reason, were to collapse, it is not clear what would hold Forza Italia together.
It would be unwise to predict Forza Italia’s imminent collapse, but there is
334 JONATHAN HOPKIN & CATERINA PAOLUCCI
evidence that the party is as organisationally vulnerable as the UCD. If important
components of a party system are heavily dependent on the individual
decisions and fortunes of their leaders, then the ‘turbulence’ Panebianco envisaged
as a result of electoral-professional modes of party organisation is
likely to result.
The all-powerful leadership and imprecise social base of the business ﬁrm
party also raises important questions about its role in making government
policy. An important characteristic of the business ﬁrm party, present in both
the cases examined here, is the absence of an ofﬁcial party ideology or coherent
set of social relationships which can guide the organisation’s involvement
in policy-making. Both UCD and Forza Italia maintained a high degree of
ﬂexibility in their attitudes to important policy questions, with neither ﬁrm
ideological commitments nor close links with particular sectors of civil society
on which to base policy-making. Instead, policies and programmes
were strongly inﬂuenced by the ﬁndings of public opinion polls and political
‘market research’. Of course, traditional parties, to the extent that they
have increasingly adopted ‘catch-all’ modes of electoral competition, also
use political marketing; however, they are constrained by the formal need to
respect their formal ideology in their dealings with the party grassroots and
the ‘electorate of belonging’. Business ﬁrm parties are much less constrained,
and there is little to stop them varying their political message in accordance
with the vagaries of public opinion.
The consequences of ideological indeﬁnition have been quite different in
the two cases studied here. For the UCD, the lack of speciﬁc policy objectives
allowed Suárez to concentrate on building broad coalitions on the ‘big’ issues
of the transition: the establishment of a new democratic political system and
the elaboration of a new constitution. However, this approach could not be
sustained for longer than the formal process of political transition, and the
Suárez governments of 1979–80 quickly collapsed into internal contradiction
as a result of a lack of policy direction. In Forza Italia, the absence of ideological
or social commitments has had the opposite effect: they have allowed
Berlusconi to use the party to achieve very narrow aims. In government, Forza
Italia’s positions on issues such as pensions reform and the regulation of television
were not obviously distinguishable from the interests of the Fininvest
business empire and its branches involved in ﬁnancial services and the media.
In opposition, the judicial investigations into Berlusconi’s business activities
have coincided with an increasing emphasis in Forza Italia’s discourse on the
need for reform of the Italian justice system, with the explicit aim of curbing
the power of public prosecutors.
In short, the business ﬁrm party is unable to fulﬁll some of the key
functions which we have come to expect of political parties in Western demo-
THE BUSINESS FIRM MODEL OF PARTY ORGANIZATION 335
cracies. It undermines stable party competition, creating the potential for
party system ‘turbulence’, and fails to provide voters with a political identity.
It also accentuates the potential for party government to be subverted
in favour of particularistic, and even individual, interests. The apparent ease
with which the business ﬁrm model can take root in new or crisis-ridden
party systems poses particular problems for states, such as those in Southern
Europe, whose party tradition is either limited or under threat.
Notes
1. Research by Richard Gunther of Ohio State University on party building in the Spanish
transition revealed that many party leaders were familiar with the ideal types mentioned
above, and that decisions over party organisation were sometimes justiﬁed in terms of
them. Further research carried out by Hopkin conﬁrmed that some Spanish party ofﬁcials
were familiar with the classic studies of political parties; one key UCD organiser had read
Sartori’s (then recent) Parties and Party Systems. See Gunther & Hopkin (forthcoming
1999).
2. For a critical overview of this inﬂuence, see Green & Shapiro (1994).
3. For a more recent reformulation, see Gaxie (1977), also Lacam (1988).
4. See Laver (1980). For a game theoretical formulation, see Colomer (1995).
5. This model implies two basic features: the creation of the party under the auspices of
a political entrepreneur seeking a political vehicle for the promotion of a leadership
challenge, and the application of electoral-professional techniques of campaigning and
party management to the new organisation. The model is in part inspired by Diamanti
(1995).
6. ‘Adolfo Suárez’s ﬁrm’. This is the title of a journalistic analysis of the UCD which
emphasised the role of Suárez’s political entrepreneurship in establishing the party and
tailoring it to his own leadership requirements (Figuero 1981).
7. More detailed analyses of the UCD include Huneeus (1985), Gunther, Sani & Shabad
(1986), Hopkin (forthcoming 1999), Gunther & Hopkin (forthcoming 1999).
8. It was broadly middle-class, Catholic and had largely accepted the Franco dictatorship:
Linz et al. (1981).
9. It should be emphasised that Suárez’s power-seeking behaviour does not necessarily follow
from any implicit self-interest axiom: a convincing argument can be made for the
public beneﬁts (in terms of the stabilisation of the transition process) of Suárez remaining
at the helm, and his behaviour undoubtedly responded to both types of motivations.
10. These ﬁgures should be taken as inﬂated; all Spanish parties exaggerated their membership
in this period, and levels of activism were very low (Montero 1981).
11. Interview data suggests that the party employed no more than 200 full and part time
ofﬁcials, and the party apparatus was a far less weighty structure than that of UCD’s main
rivals the Socialists (PSOE).
12. Interview with a journalist and close advisor of Suárez carried out by Richard Gunther in
1978. We would like to thank Professor Gunther for making his interview data available;
of course he is not responsible for any errors in our interpretation of the data.
13. See Gunther (1986). As Mario Caciagli has pointed out, ideological diversity similar to
that of UCD has existed in other, more durable, political parties (1986: 275).
336 JONATHAN HOPKIN & CATERINA PAOLUCCI
14. The Liberals also had a close relationship with the German Neumann Foundation (Gangas
Peiró 1995: 83–84).
15. Interview with Oscar Alzaga, May 1992.
16. ‘El maniﬁesto de los 200’, reproduced in Diario 16, 22 December 1980.
17. From a newspaper article published by a group of critics under the name of ‘Blasco de
Alagón’; ‘Sin vencedores ni vencidos’, Diario 16, 27 December 1980, p. 2.
18. The irony of this statement is that the Socialists, once in power, distanced themselves
from their trade union base without suffering particularly high electoral costs.
19. For Hirschman (1970), this kind of loyalty is fundamental in allowing parties (or ﬁrms
and other organisations) to recover from poor short-term performance; if all electors were
to exercise the exit option, parties would collapse before they had a chance to make
necessary political or organisational changes.
20. Rafael Arias Salgado and Rodolfo Martín Villa, both elected deputies for Madrid in highproﬁle
positions on the party list (3 and 4 respectively).
21. On the impact of ‘clean hands’, see Waters (1994).
22. On the Leagues, see Diamanti (1993), Mannheimer (1991).
23. On the transformation of the right, see Ignazi (1994a,b).
24. On the Italian media system, see Statham (1996a).
25. ‘Virtual candidates, for a virtual party, for an election not yet called’ (Di Virgilio 1994:
502).
26. Indeed, after the election, in an analysis of the vote, Mannheimer (1994) points out that
the self-location of FI voters on the left-right continuum is overwhelmingly on the right
or centre-right. This would explain the conﬁguration of vote transfers with respect to the
1992 election: at least one out of four voters of the two main governing parties in 1992 –
DC and PSI – were drained away to FI in 1994, as were almost one out of three former
Northern League voters. Hence, the vote to FI is interpreted as the effect of a major
realignment of centre and right voters although it has also been argued that FI managed
to attract a large number of left-wing voters (Ricolﬁ 1994: 618–621). See also Bobbio
(1994).
27. This is also reﬂected in the choice of parliamentary candidates; see Verzichelli (1994),
Mattina (1994).
28. With the purpose of monitoring political preferences, eight Focus Groups were created.
They were composed by a representative sample of Italian citizens, who were asked to
meet in a living room, where a psychologist, through the registration of their opinions,
preferences, intentions and attitudes put together an accurate identikit of Italian electors.
New Focus Groups were formed after the election. Alongside clubs, they are considered
to be at the heart of FI electoral success. For an analysis of this technique, see Gamson
(1992).
29. Of the 500 people who had been originally recruited and who attended the courses and talk
show simulations at Diakron’s headquarters, more than half were found to be unsuitable
because of their poor TV performance.
30. See ‘Forza Italia, politica e bilancio’, La Repubblica, 20 December 1995, p. 15. Also,
Golia (1997, Chap. 2).
THE BUSINESS FIRM MODEL OF PARTY ORGANIZATION 337
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Addresses for correspondence:
Jonathan Hopkin, Department of Political Science & International Studies, University of
Birmingham, B15 2TT, UK
Phone: (0121) 4146386; Fax: (0121) 4143496; E-mail: hopkinjr@css.bham.ac.uk
Caterina Paolucci, Department of Social and Political Sciences, European University Institute,
Badia Fiesolana, Via Roccettini 9, I-50016 S. Domenico di Fiesole (FI), Italy
E-mail: paolucci@datacomm.iue.it