the national economy as an environment for business and investment (Martin,
1998; Schulten, 2001). Equally, however, they can be seen as an instrument of
‘regime collaboration’ involving mutual benchmarking of terms and condi-
tions in other countries (Dølvik, 2001), i.e. a key development in the process
of ‘Europeanization’. For, it can be argued, they both reflect the emphasis at EU
levels on social dialogue and collective bargaining as the vehicles for handling
economic and social change, and serve to give credibility to the inclusive struc-
ture of multi-employer bargaining.
As Traxler (2003) has suggested, meeting the stringent monetary and fiscal
convergence criteria for membership of the third stage of EMU (i.e. adoption of
the single currency) considerably enhanced the benefits of multi-employer bar-
gaining for governments and employers at the same time as it emphasized the
costs of exit. An inclusive structure of collective bargaining made it possible, in the
form of ‘social pacts’ and their equivalent, to make fundamental changes in a
number of key areas built, procedurally, around the notion of ‘organized’ decen-
tralization’ and, substantively, around competitiveness. Equally, it drew attention
to the very high costs that employers and governments would have had to pay if
they turned their backs on such structures. For an inclusive structure of collective
bargaining not only helps to legitimize overall frameworks, but also underpins the
deep involvement of employers’ organizations and trade unions in other key
activities such as the administration of training and social protection systems.
Fundamentally important is the fact that a combination of centralization
anddecentralization has great advantages in helping to deal with the com-
plexity of the collective action problem involved in sovereign bodies reaching
agreement. It makes it possible for the principals to set a sense of direction and
yet to avoid failure to agree on the details which can so easily bedevil the nego-
tiations between them. At the same time, by delegating responsibilities to
representatives at lower levels to tailor solutions to their immediate situation, it
improves the prospects of member acceptance internally.
Changing patterns of regulation?Especially critical in understanding the parallel developments within national
systems is the fact that policy makers and practitioners have to grapple with an
increasingly complex raft of ‘new’ issues, reflecting the pressures of ‘globaliza-
tion’ and ‘Europeanization’. To paraphrase the Supiot Report (1999: 140–7), in
many EU countries, collective bargaining has traditionally been seen primarily
as a means of improving the legal status of employees. In some countries,
notably Germany, the very strict legal division of powers between collective
bargaining, on the one hand, and the responsibilities of works councils on the
other, has reinforced this. Increasingly, however, collective bargaining is
assuming a wider range of functions, breaking down the distinction in the
process. It is not just that the content of legislation is very often determined by
446 International Human Resource Management