Beyond neo-corporatism: state employers and the special-interest politics of public sector wage-setting*

Cross-country variation in the outcomes of public sector wage-setting (PSWS) persists Europe. Received wisdom from neo-corporatist scholarship attributes it to presence/absence centralized or co-ordinated regimes. This article challenges conventional view by analysing PSWS through lens common-pool problem finance and special-interest politics. Given structure political incentives use fiscal money employers, tends be inherently inflationary. Yet, posits that extent which wage inflation occurs hinges on institutional properties governance systems. Systematic restraint within systems where authority is delegated a state actor – either Finance Ministry an independent agency with organizational mandate powers ensure conducted general interest rather than response groups’ narrow interests. The argument demonstrated leveraging original combination most-similar most-different case studies combined archival research elite interviews. findings advance our understanding economy Europe highlight key role actors structures play growth