Lucio Baccaro and Chiara Benassi
The Evolution of German Industrial Relations: Softening Institutions,
Hardening Growth Model
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The German industrial relations system has changed considerably in the past thirty years and has become much more flexible. All observers agree on this point. However, interpretations of events differ. For some, the German economy has reached a new state of equilibrium built around a coalition between large, export-oriented firms and core workers. Lucio Baccaro argues that while there is much to comment on this argument, it does not go far enough. The softening of Germany’s industrial relations institutions is deeper and affects the core as well. This has important consequences for the German growth model. While the German economy has always been export-oriented, it was never solely dependent on exports for growth. Industrial relation institutions such as pattern bargaining ensured the broad distribution of productivity increases. The crisis of these institutions, combined with a more liberal labor market regime, has generated competitiveness imbalances and is one of the causes of the current Euro crisis.
Lucio Baccaro is a Professor of Comparative Macrosociology at the University of Geneva. He was trained at MIT (Massachusetts Institute of Technology) and has worked at MIT and the International Labour Organization. His research focuses on two main themes: the comparative political economy of labor markets and industrial relations, and the empirical study of participatory and deliberative institutions. His work has appeared in numerous journals in industrial relations, political science, and sociology.
Chiara Benassi is a PhD student in Employment Relations and Organisational Behaviour at the London School of Economics and a visiting doctoral student at the MPIfG in Cologne from January to March 2013.