Analysis of lithuanian labour regulation reform from the perspective of varieties of capitalism approach

The analysis of Lithuanian Labour Regulation Reform from the Perspective of Varieties of Capitalism Approach The necessity of labour regulation reform is one of the main topics of Lithuanian social policy this year. Liberalization of Lithuanian industrial relations formal regulation is being suggested as the most promising solution. However, this course is considered differently by social partners. Trade unions think the new labour code should contain less flexibility and more social security while employers’ organizations and government see flexibility as the main criteria of the industrial relations. Labour regulation reform may also influence Lithuanian type of capitalism. In order to identify the influence, the Varieties of Capitalism (VoC) approach by Peter Hall and David Soskice is being used. There are some different opinions about Baltic (and Lithuanian) type of capitalism in academic literature. Some scientists state that Baltic type of capitalism is a middle type of VoC ideal types – liberal market economy (LME) and coordinated market economy (CME), others say that Baltic states belongs to the different unique type and there are too many differences which prevent them to be considered as either LME or CME. The main goal of this thesis is to find out which type of capitalism would the new labour regulation resemble the most. In the first part of the thesis, the VoC approach and some alternative approaches are being presented. Then it is used to observe scientists’ position about capitalism types of Baltic States and Visegrad group countries. Finally, the rules of currently valid labour code and two versions of labour code bill is being compared in order to find out what type of capitalism it indicates the most. The main defending statements of this thesis are that the labour regulation bill would turn Lithuanian industrial relations not towards Western European LME countries but towards Visegrad group countries. Also the new rules of labour regulation would not lead to the specific Baltic capitalism type. The analysis have shown that there is no perspective of moving towards one particular type of capitalism. Some of these labour regulation changes show possibilities of similarity with Visegrad group countries and some of them shows possible similarity with both Western European and Visegrad group countries. After conclusions are drawn, there are some suggestions for future studies. The analysis could be repeated after a few years including practical labour coordination features if the labour code bill were approved. Also a comparative analysis of two institutional spheres – industrial relations and relations with employees could be done in the future