INSTITUTIONAL RIGIDITIES AS SPECIFIC FEATURES OF THE WEAKLY STRUCTURED ECONOMIES AND THEIR EFFECTS ON ECONOMIC GROWTH: THE CASE OF INDUSTRIAL LABOUR MARKET (ll)

The paper describes the liberalization of labor relations in Poland and Romania, from the beginning, in 1991, when the Laws on trade unions, unemployment support policies and on solving collective disputes were adopted, and until 1999. It also presents the characteristics of wage bargaining and the patterns of union organization in both countries. In the last part the paper focuses on measuring the labor force reallocation in industry. In the transition countries this process goes in several directions, among which the central one seems to be reallocation between economic activities and reallocation between ownership of the firms. Both countries reallocate labor more intensively in the second part of the interval than in the first one. However, the essential difference between them is that the labor reallocation has a positive and slightly higher effect on production growth in Poland after 1997, while in Romania the opposite is to be found. * (Acknowledgements: Financial support from the Research Support System Scheme co-operative project No. 2186/1247/2000, "Sectoral NAIRU and the Labor Market Institutions - A Comparative Approach", is gratefully acknowledged. The authors wish to thank to Jose de Soussa, Phillipe Rusin, Mathilde Maurel (ROSES Universite l - Sorbonne, Paris) and Dorin Jula (IEF, Bucharest) for extensive discussions on preliminary versions and ideas of the paper, to Mihaela Grigorescu (WB, Bucharest) for excellent documentation work, to Cristian Turlea (IWE, Bucharest) for much help with the data, to participants to the "Seminaire des doctorants" (ROSES, Paris, 23 February 2001) and to the "Modeling Seminar" (IEF, Bucharest, 24 April, 2001) for the suggestions. An extended version of this work was presented at the conference "Labor Markets, Work and Welfare during the Transition and Integration Processes" in Riga, Latvia, 24 March 2001. Usual disclaimers apply. The first part of this article was published in "Romanian Journal of Economic Forecasting", No. 1-2/2001).