Monetary integration and wage-setting coordination in developed European countries

When the national economy performs poorly but recovery is a challenging task due to monetary austerity in an integrated Europe, there is an emerging pressure for tight cost control. This economic pressure has led to diverse outcomes in the industrial relations of developed European countries. In some countries the wage-setting process has been more coordinated, whereas it has not changed much in others. Among those countries with increasing coordination, there also have been various paths to the change, which have ranged from government unilateralism to voluntary pact building. In this study I explain these diverse dynamics of the European industrial relations by focusing on the interactions between the economic pressure and other non-economic causes, which are drawn from the national political party system and the social organizations of unions and employers. I test my claims mainly in a comparative historical analysis of eleven developed European countries, covering the period from the 1970s to the 2000s. Overall, my study suggests that both economic and non-economic causes are important in the adjustment processes of economic institutions, thus complementing an influential approach to the study of European political economy, which emphasizes the economic side of the causal mechanism