We investigate the empirical determinants of social pacts over the 1970-2004 period. We adopt a political economy approach, showing that governments are more likely to sign a pact when the cost of a conflict with trade unions is relatively larger. Such a cost depends on macroeconomic variables and on measures of social conflict and union strength. These findings are remarkably stable across sub-periods, in apparent contrast with previous contributions that emphasised differences between first- and second-generation pacts. Our interpretation is that pacts were different across periods because the policy issues changed, but the incentives to seek union consensus did not
Colombo, E., Tirelli, P., Visser, J. (2014). Reinterpreting social pacts: theory and evidence. JOURNAL OF COMPARATIVE ECONOMICS, 42(2), 358-374 [10.1016/j.jce.2013.05.008].
Reinterpreting social pacts: theory and evidence
COLOMBO, EMILIO;TIRELLI, PATRIZIO;
2014
Abstract
We investigate the empirical determinants of social pacts over the 1970-2004 period. We adopt a political economy approach, showing that governments are more likely to sign a pact when the cost of a conflict with trade unions is relatively larger. Such a cost depends on macroeconomic variables and on measures of social conflict and union strength. These findings are remarkably stable across sub-periods, in apparent contrast with previous contributions that emphasised differences between first- and second-generation pacts. Our interpretation is that pacts were different across periods because the policy issues changed, but the incentives to seek union consensus did not
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