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Converging Divergence: How Competitive Advantages Condition Institutional Change under EMU

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  • ANDREA HERRMANN

Abstract

Recognizing that the institutional design of EMU leads to the co‐ordination of national wage‐bargaining structures, this article asks why bargaining systems in some EMU Member States have become co‐ordinated and centralized, whereas others have become co‐ordinated and decentralized. In contrast to neoliberal theory, it is argued that different bargaining levels are best explained by a country's competitive advantage: whilst countries with a competitive advantage in high‐quality manufacturing favour a centralized bargaining system which supports a high‐skill strategy, countries with a competitive advantage in low‐cost production prefer decentralized bargaining structures which accommodate high wage differentials within the various employment categories of an industry. Thus, even though EMU asserts unilateral pressure for institutional change, it does not lead to the convergence of national institutions.

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  • Andrea Herrmann, 2005. "Converging Divergence: How Competitive Advantages Condition Institutional Change under EMU," Journal of Common Market Studies, Wiley Blackwell, vol. 43(2), pages 287-310, June.
    • Handle: RePEc:bla:jcmkts:v:43:y:2005:i:2:p:287-310
    DOI: 10.1111/j.0021-9886.2005.00556.x
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    References listed on IDEAS

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    1. Michael C. Burda, 2001. "European Labour Markets and the Euro: How Much Flexibility Do We Really Need?," Palgrave Macmillan Books, in: Deutsche Bundesbank (ed.), The Monetary Transmission Process, chapter 7, pages 252-282, Palgrave Macmillan.
    2. Schulten, Thorsten, 2002. "Europeanisation of collective bargaining: An overview on trade union initiatives for a transnational coordination of collective bargaining policy," WSI Working Papers 101, The Institute of Economic and Social Research (WSI), Hans Böckler Foundation.
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    Cited by:

    1. Johnston, Alison & Regan, Aidan, 2014. "European integration and the incompatibility of national varieties of capitalism problems with institutional divergence in a monetary union," MPIfG Discussion Paper 14/15, Max Planck Institute for the Study of Societies.
    2. Anke Hassel, 2014. "Adjustments in the Eurozone: Varieties of Capitalism and the Crisis in Southern Europe," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 6, London School of Economics / European Institute.
    3. Alison Johnston & Aidan Regan, 2016. "European Monetary Integration and the Incompatibility of National Varieties of Capitalism," Journal of Common Market Studies, Wiley Blackwell, vol. 54(2), pages 318-336, March.
    4. Anke Hassel, 2014. "Adjustments in the Eurozone: Varieties of Capitalism and the Crisis in Southern Europe," LEQS – LSE 'Europe in Question' Discussion Paper Series 76, European Institute, LSE.
    5. Paul Ramskogler, 2013. "The National–Transnational Wage-Setting Nexus in Europe: What have We Learned from the Early Years of Monetary Integration?," Journal of Common Market Studies, Wiley Blackwell, vol. 51(5), pages 916-930, September.

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