The concept of the corporate state developed under the context of Fascism in Mussolini's Italy as a means of regulating industrial relations. The theory divided society into a limited number of corporations. This system then functioned as a means of control and a channel for government intervention. Theoretical underpinning came from the medieval traditions of guilds and craft-based economics.

Similar ideas were also ventilated in other European countries at the time. For instance, Austria under the Dollfuß dictatorship had a constitution modelled on that of Italy; but there were also conservative philosophers and/or economists advocating the corporate state, for example Othmar Spann.

In Portugal, a similar ideal, but based on bottom-up individual moral renewal, inspired Salazar to work towards a corporate state or corporatism.