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the Dutch miracle: institutions, networks and trust

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Author Info

  • Butter, Frank A.G. den

    (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics)

  • Mosch, Robert H.J.

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 government 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.

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Bibliographic Info

Paper provided by VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics in its series Serie Research Memoranda with number 0018.

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Date of creation: 2001
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Handle: RePEc:dgr:vuarem:2001-18

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Web page: http://www.feweb.vu.nl

Related research

Keywords: labour market policy; institutional framework; networks; trust;

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Cited by:
  1. W. Jos Jansen, 2003. "Inside the Impossible Triangle:Monetary Policy Autonomy in a Credible Target Zone," MEB Series (discontinued) 2003-13, Netherlands Central Bank, Monetary and Economic Policy Department.
  2. W. Jos Jansen & Ad C.J. Stokman, 2003. "International rent sharing and domestic labour markets: a macroeconomic analaysis," WO Research Memoranda (discontinued) 749, Netherlands Central Bank, Research Department.
  3. Borghans, Lex & Kriechel, Ben, 2007. "Wage Structure and Labor Mobility in the Netherlands 1999-2003," IZA Discussion Papers 2865, Institute for the Study of Labor (IZA).
  4. Paul T. de Beer & Robert H.J. Mosch, 2007. "The waning and restoration of social norms: a formal model of the dynamics of norm compliance and norm violation," DNB Working Papers 131, Netherlands Central Bank, Research Department.
  5. John Lewis, 2007. "Hitting and Hoping? Meeting the Exchange Rate and Inflation Criteria during a Period of Nominal Convergence," CESifo Working Paper Series 1902, CESifo Group Munich.
  6. Frank A.G. den Butter & Sjoerd ten Wolde, 2011. "The Institutional Economics of Stakeholder Consultation; Reducing Implementations Costs through 'Matching Zones'," Tinbergen Institute Discussion Papers 11-162/3, Tinbergen Institute.
  7. Lei Delsen & Erik Poutsma, 2005. "Labour market institutions and economic performance in the Netherlands," International Economic Journal, Taylor & Francis Journals, vol. 19(2), pages 169-196.
  8. Butter, Frank A.G. den & Koppes, Silvie Y., 2003. "Strikes in France and the Netherlands; a comparison of labour market institutions," Serie Research Memoranda 0012, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  9. Frank A.G. den Butter & Sjoerd ten Wolde, 2011. "The Institutional Economics of Stakeholder Consultation; Reducing Implementations Costs through 'Matching Zones'," Tinbergen Institute Discussion Papers 11-162/3, Tinbergen Institute.
  10. Frank A.G. den Butter & Silvie Y. Koppes, 2003. "Strikes in France and the Netherlands; A Comparison of Labour Market Institutions," Tinbergen Institute Discussion Papers 03-087/3, Tinbergen Institute.
  11. Berggren, Niclas & Daunfeldt, Sven-Olov & Hellström, Jörgen, 2012. "Social trust and central-bank independence," HUI Working Papers 66, HUI Research.
  12. Eichhorst, Werner & Wintermann, Ole, 2005. "Generating Legitimacy for Labor Market and Welfare State Reforms: The Role of Policy Advice in Germany, the Netherlands, and Sweden," IZA Discussion Papers 1845, Institute for the Study of Labor (IZA).

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