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This article challenges prevailing views about the collapse of the New Deal industrial relations system and the role of the market. It argues that the old system has been replaced not by the market but by an employment rights regime, in which the rules of the workplace are imposed by law, judicial opinions, and administrative rulings, supplemented by mechanisms at the enterprise level that are responsive to the law but also are susceptible to employee pressures, both individual and collective. The emergence of this regime is the product of a shift in the axes of social and political mobilization from mobilization around economic identities rooted in class, industry, occupation, and enterprise to identities rooted in the society outside the workplace: sex, race, ethnicity, age, disability, and sexual orientation. The shift in the axes of mobilization in turn reflects the collapse of the underlying model of social and economic organization upon which the collective bargaining regime was built and more fundamentally a shift in our understanding of the nature of industrial society and its direction of evolution in history. This interpretation poses a challenge to the conceptual tools used in industrial relations to understand the issues of work and to frame the public policy debate. We conclude with some suggestions as to the direction in which we might move to provide an alternative conceptual framework.I             -  the world of industrial relations and workplace governance has been fundamentally, probably irrevocably, altered. The system of collective bargaining that grew out of the New Deal reforms has collapsed. That collapse has been produced * The authors' affiliations are, respectively, Department of Economics, MIT; Graduate School of Business, University of Chicago. E-mail: mpiore@MIT.EDU. We have accumulated debts to a number of people, too great to be acknowledged here. But we were particularly influenced by conversations with the students and faculty of the IWER group at MIT, and with

Examining the role of labour inspection in the context of the revival of labour market regulation, the authors distinguish between the Latin model, where inspectors have authority to tailor enforcement to firms' exigencies, and the less flexible United States approach. The Latin model can reconcile regulation with economic flexibility and transform inspectors into the shock troops of a campaign for decent work. But its vulnerability to arbitrary behaviour on their part needs to be addressed through: management of organizational cultures; exposure and systematization of the tacit knowledge underpinning inspectors' judgements; and research into the relationship between labour standards and business practices. regulatory renaissance is under way in southern Europe, North Africa A and Latin America. This renaissance is marked by the demise of the alleged Washington Consensus and the resuscitation of the age-old debate over the relative costs and benefits of labour market regulation. Though policymakers in countries such as Brazil, the Dominican Republic, Morocco and Spain have devoted new resources and personnel to the enforcement of their labour and employment laws, thereby redoubling their commitment to the cause of worker protection, they have for the most part ignored two plausible -though far from incontrovertible -objections to their efforts. These are, first, that the regulations in question are likely to impede adjustment, job creation and growth; and, second, that the inspectors responsible for enforcing the regulations are at best incompetent and at worst corrupt. We draw a distinction between the first objection, which we label the "economic" critique of regulation, and the second, which we label the "political" critique of regulation. We also point out that the political critique reinforces the economic one, since regulations that might redound to the benefit of workers in theory will almost certainly redound to the detriment of workers and their employers in practice -that is, when enforced by incompetent or corrupt public officials.

This paper extends the concept of street-level bureaucracy to address the problem of the inflexibility and rigidity of governmental rules and regulations, a problem at the heart of the standard economic argument against an active government role in the management of the economy. In so doing, it seeks to create a conceptual bridge through which a range of social science disciplines can be drawn into the debate about public sector management and thereby expand the repertoire of policy tools. The paper draws primarily on research on one class of such organizations, labor inspection in Latin America and Southern Europe, and secondarily on a project focusing on DARPA, the research arm of the U.S. Department of Defense. In both organizations, line officers have wide discretion in program development and management and in effect adjust to changing economic and social conditions, in a way not unlike the market. These adjustments are grounded in tacit rules which evolve through discussion among the line agents coping day to day with novel cases. Management can influence that evolution by entering into the ongoing discussion and giving it direction. Various ways in which it might do so are examined. * The argument developed here draws on work done in collaboration with Andrew Schrank, Charles Sabel, and Gilles Raveaud and on extensive discussions and debates with them. It also incorporates comments and reflections generated by the other papers and the debates and discussion at the conference. I am indebted to a list of other readers too numerous to mention, but I want to thank particularly Susan Silbey who read and edited several drafts of this manuscript and Michael Lipsky who also provided extensive comments. I remain responsible for the errors and omissions in the text and in the argument. Corresponding Author: Michael J. Piore, Dept. of Economics, MIT, 50 Memorial Dr., E52-271c, Cambridge, MA, 02142; mpiore@mit.edu; Tel: 617-253-3377; Fax: 617-253-1330 Sociology, Street-Level Bureaucracy, and the Management of the Public Sector "The question we ask today is not whether our government is too big or too small, but whether it works . . . ." Barack Hussein Obama First Inaugural Address, January 20, 2009 We are living through a period of resurgence of government and its role in the economy. This is especially true in labor market regulation, which is the immediate focus of this paper. But it is true more generally in many sectors of the economy, including most recently finance, environment and energy policy. These developments constitute a reaction to the progressive withdrawal over the last thirty years of government from regulation and from the direct provision of goods and services and to the neoliberal framework in terms of which that withdrawal has been conceived and carried out. But the reaction is less one of conviction than of circumstance, an almost instinctive response to a series of spectacular events: to the financial crisis and to economic crisis more broadly; and to attention-grabbing accident...