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Reinterpreting social pacts: Theory and evidence

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  • Colombo, Emilio
  • Tirelli, Patrizio
  • Visser, Jelle

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.

Suggested Citation

  • Colombo, Emilio & Tirelli, Patrizio & Visser, Jelle, 2014. "Reinterpreting social pacts: Theory and evidence," Journal of Comparative Economics, Elsevier, vol. 42(2), pages 358-374.
  • Handle: RePEc:eee:jcecon:v:42:y:2014:i:2:p:358-374
    DOI: 10.1016/j.jce.2013.05.008
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    Keywords

    Social pacts; Institutions; Macroeconomic outcomes;

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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