individual employer considerable discretion over whether and how to negotiate;
but in many countries, multi-employer bargaining is the norm, and this is
often accompanied by ‘extension mechanisms’ (Traxler, 1998) which gener-
alise the terms of agreements across whole sectors; this reduces the advantage
to individual employers of union exclusion. Nevertheless, it remains important
to note that whatever the industrial relations context, the cost-benefit calculus
for individual employers may be very different from the balance of advantage
at the societal, macroeconomic level. Streeck (1997) develops arguments rather
analogous to those of Freeman and Medoff when he analyses social peace in
employment (in his case, as encouraged by the German mechanisms of work-
place and board-level codetermination) as a collective good which individual
employers may nevertheless consider an unreasonable burden. The collective
action problem for employers has, in many countries, in the past been over-
come by powerful social norms of solidarity but without statutory under-
pinning. It is partly for the reason, as is seen below, that there are fears that the
institutional framework may not survive the pressures of ‘globalisation’.
Freeman and Medoff focus on the institutionalisation of exit/voice at the
level of the individual employer (again, reflecting the pattern of US industrial
relations). But it is important also to address the macro level. Crouch (1995)
has used exit/voice to characterise the dynamics of national employment and
industrial relations regimes. At both national and company levels, some insti-
tutional frameworks encourage a preoccupation with short-term options; both
employers and workers, if dissatisfied with the current cost/benefit balance,
will tend to choose exit. In other contexts, exit is more difficult (employers
cannot dismiss workers, or at least those with an established employment
status, without pursuing a complex, perhaps legally prescribed procedure;
employees with seniority are discouraged from leaving because elsewhere they
may have to start again at the bottom of the ladder). Where short-term oppor-
tunism is constrained, all parties are more likely to seek remedies within the
framework of the existing relationship which provides an incentive to voice
arrangements.
Liberal and organised market economiesA third, more general distinction which is central to recent analysis of varieties
of capitalism is between ‘liberal’ and ‘organised’ or ‘coordinated’ market
economies (Hall and Soskice, 2001; Hollingsworth and Boyer, 1997; Kitschelt
et al., 1999; Soskice, 1999; Streeck, 2001). In the latter, there is a dense network
of institutions – sustained by law, custom or moral values – which subject the
decisions of individual economic actors to broader collective, normative imper-
atives. In the former, by contrast, market participants are far more autonomous
(or, one should add, because of the asymmetry of market outcomes, the rela-
tively powerful are freer to benefit at the expense of the relatively weak). Here
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