The Dutch Miracle: Institutions, Networks, and Trust

Abstract

Between 1982 and 2000, the Netherlands experienced a remarkable economie recovery. Labour participation rose from a European low of 52 percent to the European average of 65 percent. Unemployment decreased from a high of 14 percent to a present-day low of 2% percent, while govemment finances and social security were reorganised. This paper aims to demonstrate how the Dutch culture of consensus, reflected in the Dutch institutional consultation structure, was one of the main driving forces of this recovery. The trust enhancing effects of the institutional framework, in which government, unions, employer organisations, centra1 bank and advisory bodies meet each other fiequently in forma1 and informal atmospheres, produced an environment of mutual trust and co-operation that was capable of effectively dealing with the problems. Two decades of wage moderation and increased labour market flexibility have led to economie prosperity without significant social unrest. It is an example of an institutional fiamework that transforms trust between persons and organisations at the micro leve1 to positive macroeconomic effects.

Collective Bargaining Through the Magnifying Glass: A Comparison Between the Netherlands and Portugal

“…For example, the improvement in economic performance in the Netherlands following the Wassenaar agreement of 1982, often referred to as the "Dutch miracle", has in part been attributed to the importance of trust between the social partners and the quality of labour relations (Visser & Hemerijck, 1998;Den Butter and Mosch, 2003).…”

“…Some scholars trace the emergence of trust between social partners in the Netherlands back to the culture of cooperation and trust that emerged in the late Middle Ages between the various provinces (Prak and Luiten van Zanden, 2013) and the joint fight of the Dutch against the water (Den Butter and Mosch, 2003).…”

The Institutional Economics of Stakeholder Consultation: Reducing Implementations Costs Through 'Matching Zones'

“…Both unionists and employers are perfectly aware that they will be dependent on each other in the future. This often breeds cooperation and concession politics (see Den Butter and Mosch, 2003 for a further discussion).…”

Employment policy in a dynamic labour market: simulations using a multifirm flow model

“…Relatively moderate wage adjustments have been a prominent feature of the so called Dutch "polder-model" (see, e.g. Den Butter and Mosch, 2003). We implement this wage setting policy by comparing the benchmark simulations with the results of simulations where the wages show more variability over time.…”