204 The Transformation of Industrial Relations in Coordinated Market Economies

Thursday, June 27, 2013: 9:00 AM-10:45 AM
C2.17 (Oudemanhuispoort)
This panel focuses on the evolution of industrial relations in Coordinated Market Economies (CMEs).  Its goal is to investigate whether CMEs can be considered to have settled on a new core-periphery equilibrium from which all main actors have no incentives to depart, or whether their evolution is better captured by a more dynamic model in which the functioning of institutions depends on the power of actors inhabiting them.  Our goal is to go in-depth on country developments and for this reason all papers focus on a particular country.  However, there is a fil rougeand a common theoretical orientation uniting all papers. 

The paper by Chris Howell, “Coordinating Liberalization: The Trajectory of Swedish Industrial Relations” focuses on Sweden and argues that behind the appearance of continuity – coordinated multi-industry bargaining; self regulation by employers and unions; low strike levels – Swedish industrial relations have changed dramatically in the past 30 years as they have come to encourage decentralized wage setting and a high degree of individualization and labor market flexibility. 

The paper by Lucio Baccaro and Chiara Benassi (presenter), “German Industrial Relations: Softening Institutions, Hardening Growth Model” argues that the German industrial relations institutions have become “softer,” not just at the periphery of the system and in the service sector in particular, something that all observers now agree on, but in the manufacturing core as well.  This softening contributes to the hardening of the growth model in the sense that Germany is now entirely reliant on export-led growth, productivity is no longer distributed to the service sector, and this generates competiveness imbalances and explains the German insistence on restrictive monetary and fiscal policies in response to the Euro crisis. 

The paper by Anke Hassel, "No way to escape imbalances in the Eurozone? Three sources of Germany’s export dependency: fiscal federalism, social insurance and industrial relations," also focuses on Germany. It argues that the export-led development strategy is a mixed blessing for Germany and examines three sources for weak domestic demand: fiscal federalism, social insurance financing of the welfare state, and the industrial relations system.  All three are fundamental pillars of the German political economy and they are all locked into political coalitions that are not easy to change.

The paper by Lucio Baccaro, “The Never-Ending and Possibly Counterproductive Search for Flexibility in Italian Industrial Relations” argues that the last 40 years have been characterized by attempts to rebalance Italian industrial relations after the Hot Autumn and the twin oil shocks.  This rebalancing has involved both bargaining recentralization and labor market flexibilization.  The combined effect of these reform attempts has been a small reduction in the unemployment rate but at the price of a decline of labor productivity.  This weakens Italy's competitive position in the Euro-zone.

Chris Howell
Wolfgang Streeck
German Industrial Relations: Softening Institutions, Hardening Growth Model
Lucio Baccaro, University of Geneva; Chiara Benassi, LSE
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