Bargaining (De)centralization, Macroeconomic Performance and Control over the Employment Relationship

Abstract

Based on data for 20 OECD countries, this paper analyses the effect of bargaining centralization on performance and control over the employment relationship. Rejecting both the corporatist thesis and the hump-shape thesis, the paper finds that performance either increases or decreases with centralization, depending on the ability of the higher level to bind lower levels. There is a clear effect on control in that bargaining coverage significantly declines with decentralization. Employers can therefore expect to extend management prerogatives, rather than improve performance, when enforcing decentralization. Hence the literature on bargaining structures when focusing on performance has lost sight of their contested nature. Copyright Blackwell Publishing Ltd/London School of Economics 2003.

The Governance of Economic Uncertainty: Beyond the ‘New Social Risks’ Analysis

“…Above individual fi rm level, collective bargaining may be involved in explicit fl exibility/security trade-offs, but only where bargaining takes a co-ordinated form, with unions and employers associations being so structured that they cannot easily avoid taking responsibility for macroeconomic consequences of their actions, including a signifi cant role for unions and associations representing the exposed sector of the economy (Traxler 2003;Traxler, Blaschke and Kittel 2001;Traxler, Brandl, and Glassner 2008). This takes us back to something similar to the politics of counter-infl ation strategies in the 1970s.…”

Flexibility and security in the labour market: An analysis of the governance of inequality

“…Above individual firm level, collective bargaining may be involved in explicit flexibility/security trade-offs, but only where bargaining takes a co-ordinated form, with unions and employers associations being so structured that they cannot easily avoid taking responsibility for macro-economic consequences of their actions, including a significant role for unions and associations representing the exposed sector of the economy (Traxler 2003;Traxler et al 2001;Traxler et al 2008). This takes us back to something similar to the politics of the counter-inflation strategy in the 1970s.…”

Policy Concertation in Europe

“…Another strand of research (by now probably larger than the former) dealt with the macroeconomic consequences of policy concertation, especially centralized or coordinated collective bargaining (for recent analyses, see Garrett, 1998;Iversen, 1999;Traxler et al, 2001;Kenworthy, 2003;Traxler, 2003;Mares, 2006).…”

“…Policy concertation was assumed to be a functional necessity of advanced societies (Schmitter, 1974;Lehmbruch, 1979), such that all governments would, sooner or later, want to engage in it. From this vantage point, the interesting questions were not those about the conditions in which certain governments (and not others) would develop a demand for policy concertation, but those about the conditions in which policy concertation would be supplied by the interest group system (Schmitter and Lehmbruch, 1979;Lehmbruch and Schmitter, 1982;Berger, 1981;Goldthorpe, 1984;Molina and Rhodes 2002).Another strand of research (by now probably larger than the former) dealt with the 2 macroeconomic consequences of policy concertation, especially centralized or coordinated collective bargaining (for recent analyses, see Garrett, 1998;Iversen, 1999;Traxler et al, 2001;Kenworthy, 2003;Traxler, 2003;Mares, 2006).In this paper we are interested in question number one, which we regard as analytically prior to the others. Governments, accountable to national parliaments (or directly to the electorate), are the sole institutions with a clear mandate to take binding decisions.…”