Social Pacts Revisited: ‘Competitive Concertation’ and Complex Causality in Negotiated Welfare State Reforms

▪ This article discusses three major issues related to tripartite social pacts: first, the puzzles they present for classic theories of corporatism; second, the contrasts between the political economies of ‘competitive concertation’ and Keynesian coordination; and third, the problems of assessing their effects in the context of complex causality. The main focus is on one specific policy area: negotiated welfare state reforms. The conclusion is that though such negotiations have dominated the process of welfare state recalibration in Europe during the 1990s, tripartite social pacts are neither a necessary nor a sufficient condition for success. Once Again Corporatism is (Not) Dead, Long Live Corporatism! Social pacts were negotiated in many European countries in the 1980s and 1990s, and have become a major issue in comparative research on industrial relations, corporatist policy-making and welfare state reform. In a most general sense, they can be defined as new forms of competitive macroconcertation in which governments and representatives of organized capital and labour meet regularly in attempts to coordinate policies across formally independent and institutionally segmented but de facto interdependent policy areas such as fiscal, wage, labour market, and social policy (Hassel, 2000). These new responses to internationalization and changing patterns of production have been given such labels as ‘competitive corporatism’ (Rhodes, 2001) and ‘lean’ or ‘supply-side corporatism’ (Traxler, 2001). They represent an alternative to a neoliberal decentralization of industrial relations and segmentation of policy responsibilities (Fajertag and Pochet, 1997). The term ‘social pact’ is often used to refer to concertation at different levels of the political system and the economy: national or macro level, sectoral, regional or company level. The form, politics and contents of European Journal of Industrial Relations © 2005 SAGE (London, Thousand Oaks, CA and New Delhi) Volume 11 Number 1 pp 107–126 www.sagepublications.com DOI: 10.1177/0959680105052235 07 siegel (ds) 21/1/05 10:30 am Page 107 © 2005 SAGE Publications. All rights reserved. Not for commercial use or unauthorized distribution. at PENNSYLVANIA STATE UNIV on April 12, 2008 http://ejd.sagepub.com Downloaded from concertation platforms vary across countries and change over time, and any generalizations that fail to take into account this variety among ‘social pacts’ are problematic. This article deals exclusively with tripartite social pacts at the national level. As the literature on corporatism has often been criticized for concept inflation, a comment on the choice of the term ‘competitive concertation’ is appropriate. I use the term competitive concertation rather than ‘corporatism’ because the various macroconcertation processes in OECD countries during the 1980s and 1990s were not necessarily based on firmly institutionalized corporatist interest mediation or policy-making. Rather, they involved a large variety of forms and practices of more or (often) less firmly institutionalized concertation; some of the social pacts of the 1980s and 1990s were crisis-induced processes with a comparatively low degree of institutionalization. However, the many efforts to revitalize tripartite macroconcertation during these decades (Fajertag and Pochet, 1997; Hassel, 2000; Regini, 2000) indicate that corporatist forms of interest mediation and policymaking are not outdated. In the context of ‘institutionalized monetarism’ (Traxler, 2003), corporatism has proved an adaptable method; older forms of (neo)corporatism have been ‘adapted, rather than abandoned’ and ‘were clearly surviving and adjusting, not collapsing’ (Molina and Rhodes, 2002: 309, 312). As a consequence, at the beginning of the 21st century, various forms of corporatist policy-making are important features of many European political systems. Some authors have even argued that corporatism is the one (and only) alternative to unilateral deregulation (Regini, 2000). Even more significant than the revival of corporatism in countries such as the Netherlands is the negotiation of social pacts in countries that lack a strong tradition of neocorporatist concertation: Greece, Ireland, Italy, Portugal and Spain. Social pacts in some of these countries challenge core propositions of corporatist theories, being rooted neither in a long tradition of social partnership nor in corporatist networks at lower levels of society. Social pacts have even been agreed in political systems that constitute ‘majoritarian democracies’ (Lijphart, 1999), with strong governments which do not normally need to accommodate minority interests. This is at first sight surprising and will be discussed in the next section.