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«Why don’t governments need trade unions anymore? The death of social pacts in Ireland and Italy Downloaded from at ...»

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The ideological objection cannot be entirely dismissed, however. Mario Monti has never favoured negotiation with unions. And the Ministry of Finance in Ireland consistently questioned social partnership as a way to solve policy problems. However, our argument about the power of unions to cause governments harm is one that extends to parties of the right as well as to the left. Berlusconi’s government tried to exclude unions in its 1994 pension reform and was defeated in the wake of this decision. In other words, there were politicians in the 1990s who did not favour working with unions for ideological reasons. But the high cost unions could impose on these governments made this an unpalatable option. In 2012, there was no similar cost that had to be paid, as a result of the weakening of the union movement in Ireland and Italy.

Page 20 of 23 P. D. Culpepper and A. Regan Social pacts in an earlier period were adopted primarily by countries that lacked the infrastructure of institutionalized negotiation characteristic of the northern European CMEs. Some analyses of social pacts have included agreements between the social partners in the Netherlands (Rhodes, 1998) or Finland (Avdagic, 2010). We do not expect our findings to hold in these cases, should they have economic troubles of the sort facing southern Europe and Ireland in the Euro crisis. Finland enjoys roughly 70% union density. In the Netherlands, the constitutionally entrenched power of works councils provides strong microDownloaded from http://ser.oxfordjournals.org/ at University College Dublin on September 19, 2014 foundations for the periodic macro-bargaining that emerges in the case of Dutch ´ social pacts (Hancke and Rhodes, 2005; Culpepper, 2011). Our argument is restricted in scope to the countries that do not enjoy such institutional arrangements. These are, of course, precisely the countries that seemed to benefit so much from the reform capacities generated by social pacts 15 years ago, during the optimistic preparation for the EMU.

These theoretical claims about the role of unions in Ireland and Italy may have wider application, and call for further research; particularly, the question as to whether previous social pacts have themselves contributed to a decline in legitimacy. The Dutch and Finnish cases suggest this may not be the case. Despite the extensive use of social pacting in these countries, Finnish public distrust in unions was only 27% in 2010, and only 30% of people polled expressed distrust in Dutch unions. Social pacts do not necessarily cause public trust in unions to weaken, as the experience of these countries shows. Instead, it is probable that protracted and nakedly self-interested insider behaviour leads to the rise in public distrust.

Hence, it is likely the content of the deal that matters for future union legitimacy.

Union economic and political power—the ability to cripple production or to call mass demonstrations in a capital that shake the government—has always been part of the arsenal of labour negotiation. We have argued that this industrial and political strength, or what we have called the stick of union power, has the same sources as the more reform-friendly capacity to mobilize consent to solve government problems. Both are aspects of the underlying legitimacy of unions as representing a broad interest in society: the interest of those who sell their labour in the service of economic production. It is on the basis of this legitimacy that unions have claimed to be the privileged interlocutor of employers in the private sector and state representatives more broadly. When that legitimacy goes, both the sharpness of the stick and the sweetness of the carrot are degraded.

Our findings are speculative, based on what we have observed in two countries.

But the interaction between union legitimacy, an increasingly narrow membership, and elite and mass opinion seems to us a crucial and underexplored part of the debate about the political economy of contemporary capitalism today. Social pacts once appeared to provide a way for a broad societal input to be rallied behind stringent reform plans, even in countries without the institutions for Why don’t governments need trade unions anymore? Page 21 of 23 neocorporatist negotiation. The most recent episode of Eurozone reform has shown that the governments no longer feel that unions are worth the trouble of bringing into privileged negotiation. They can be treated as just one interest group among many.

References Antichi, M. and Pizzuti, R. (2000) ‘The Public Pension System in Italy’. In Reynaud, E. (ed) Downloaded from http://ser.oxfordjournals.org/ at University College Dublin on September 19, 2014 Social Dialogue and Pension Reform, Geneva, International Labour Office, pp. 81 –96.

Armingeon, K. and Baccaro, L. (2012) ‘The Sorrows of Young Euro’. In Bermeo, N.

and Pontusson, J. (eds) Coping with Crisis: Government Reactions to the Great Recession, New York, Russell Sage, pp. 162 –198.

Avdagic, S. (2010) ‘When Are Concerted Reforms Feasible? Explaining the Emergence of Social Pacts in Western Europe’, Comparative Political Studies, 43, 628–657.

Baccaro, L. (2002) ‘The Construction of ‘Democratic’ Corporatism in Italy’, Politics and Society, 30, 327– 357.

Baccaro, L. and Howell, C. (2011) ‘A Common Neoliberal Trajectory’, Politics and Society, 39, 521 –563.





Baccaro, L. and Lim, S.-H. (2007) ‘Social Pacts as Coalitions of the Weak and Moderate:

Ireland, Italy and South Korea in Comparative Perspective’, European Journal of Industrial Relations, 13, 27 –46.

Baccaro, L. and Pulignano, V. (2011) ‘Employment Relations in Italy’. In Bamber, G., Lansbury, R. and Wailes, N. (eds) International and Comparative Employment Relations, 5th ed., New York, Sage.

Baccaro, L. and Simoni, M. (2008) ‘Policy Concertation in Europe: Understanding Government Choice’, Comparative Political Studies, 41, 1323–1348.

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Culpepper, P. D. (2002) ‘Powering, Puzzling, and ‘Pacting’’, Journal of European Public Policy, 9, 774 –790.

Culpepper, P. D. (2008) ‘The Politics of Common Knowledge’, International Organization, 62, 1 –33.

Culpepper, P. D. (2011) Quiet Politics and Business Power, New York, Cambridge University Press.

Graziano, P. R. and Jessoula, M. (2011) ‘The Italian Trajectory of Recent Welfare Reforms’. In Graziano, P. R., Jacquot, S. and Palier, B. (eds) The EU and the Domestic Politics of Welfare State Reforms, New York, Palgrave Macmillan, pp. 148– 174.

Hall, P. A. and Soskice, D. (eds) (2001) Varieties of Capitalism, New York, Oxford University Press.

Hamann, K. and Kelly, J. (2007) ‘Party Politics and the Reemergence of Social Pacts in Western Europe’, Comparative Political Studies, 40, 971–994.

Page 22 of 23 P. D. Culpepper and A. Regan ´ Hancke, B. and Rhodes, M. (2005) ‘EMU and Labor Market Institutions in Europe’, Work and Occupations, 32, 196– 228.

Hardiman, N. (1988) Pay, Politics, and Economic Performance in Ireland, 1970–1987, Oxford, Clarendon Press.

Hassel, A. (2006) Wage Setting, Social Pacts, and the Euro, Amsterdam, Amsterdam University Press.

Hassel, A. (2009) ‘Policies and Politics in Social Pacts in Europe’, European Journal of Industrial Relations, 15, 7 –26.

Downloaded from http://ser.oxfordjournals.org/ at University College Dublin on September 19, 2014 ICTU (2010) ‘Analysis of Op/Ed Coverage in the Irish Newspapers’, Dublin, ICTU (manuscript).

Labour Relations Commission Annual Report (2009) Dublin, 6 June 2013. Available at http://www.lrc.ie/viewdoc.asp?DocID=751&m=7.

The Irish Times (2010, 25 January) ‘Searching for Answers in the Wake of Collapsed Partnership’.

The Irish Times (2013, 27 February) ‘Union Solidarity the First Victim of Croke Park II’.

Laver, M., Mair, P. and Sinnott, R. (1987) How Ireland Voted: The Irish General Election 1987, Dublin, Poolbeg.

Molina, O. and Rhodes, M. (2007) ‘Industrial Relations and the Welfare State in Italy:

Assessing the Potential of Negotiated Change’, West European Politics, 30, 803– 829.

´ Murphy, G. and Hogan, L. (2008) ‘Fianna Fail, the Trade Union Movement and the Politics of Macroeconomic Crises, 1970–82’, Irish Political Studies, 23, 577– 598.

Natali, D. and Rhodes, M. (2004) ‘Trade-Offs and Veto Players: Reforming Pensions in France and Italy’, French Politics, 2, 1 –23.

O’Leary, B. (1987) ‘Towards Europeanisation and Realignment?’, West European Politics, 10, 455 –465.

Palier, B. and Thelen, K. (2010) ‘Institutionalizing Dualism’, Politics and Society, 38, 119–148.

Pasquino, G. and Valbruzzi, M. (2012) ‘Non-Partisan Governments Italian-Style’, Journal of Modern Italian Studies, 17, 612 –629.

Psimitis, M. (2011) ‘The Protest Cycle of Spring 2010 in Greece’, Social Movement Studies, 10, 191 –197.

Regalia, I. and Regini, M. (1998) ‘Italy: The Dual Character of Industrial Relations’. In Ferner, A. and Hyman, R. (eds) Changing Industrial Relations in Europe, Malden, MA, Blackwell Publishers, pp. 459 –503.

Regan, A. (2010) ‘Does Discourse Matter in the Formation and Consolidation of Social Pacts?’, Critical Policy Studies, 4, 250 –277.

Regan, A. (2012) ‘The Political Economy of Social Pacts in the EMU: Irish Liberal Market Corporatism in Crisis’, New Political Economy, 17, 465– 491.

Regan, A. (2013) ‘The Impact of the Eurozone Crisis on Irish Social Partnership’, ILO Working Paper 49.

Why don’t governments need trade unions anymore? Page 23 of 23 Regini, M. (2000) ‘Between Deregulation and Social Pacts’, Politics and Society, 28, 5 –33.

Regini, M. and Regalia, I. (1997) ‘Employers, Unions and the State’, West European Politics, 20, 210 –230.

Regling, K. and Watson, M. (2010) A Preliminary Report on The Sources of Ireland’s Banking Crisis, Dublin, Stationery Office.

Repubblica (2012, 11 June) ‘Esodati, l’Inps: ‘Possibili 390mila”’.

Rhodes, M. (1998) ‘Globalization, Labour Markets, and Welfare States: A Future of:

´ “Competitive Corporatism?”’. In Rhodes, M. and Meny, Y. (eds) The Future of European Downloaded from http://ser.oxfordjournals.org/ at University College Dublin on September 19, 2014 Welfare: A New Social Contract?, London, Macmillan, pp. 178–203.

Roche, W. K. (2009) ‘Social Partnership: From Lemass to Cowen’, Economic and Social Review, 40, 183 –205.

Roche, W. K. (2013) ‘Austerity without Solidarity: Industrial Relations, Employment and Welfare in the Irish Crisis’, Paper Prepared for Conference on Varieties of Capitalism and Responses to the European Employment Crisis, University of Denver, Colorado, 1 –2 June 2012.

Simoni, M. (2010) ‘Labour and Welfare Reforms: The Short Life of Labour Unity’.

In Mammone, A. and Veltri, G. A. (eds) Italy Today. The Sick Man of Europe, London, Routledge, pp. 229 –242.

Visser, J. (2009) ICTWSS Database on Institutional Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts in 34 Countries Between 1960 and 2007, Amsterdam, Amsterdam Institute for Advanced Labour Studies.



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