The Paradox of Liberalization – Understanding Dualism and the Recovery of the German Political Economy

Abstract

What do the recent trends in German economic development convey about the trajectory of change? Has liberalization prepared the German economy to deal with new challenges? What effects will liberalization have on the coordinating capacities of economic institutions? This paper argues that coordination and liberalization are two sides of the same coin in the process of corporate restructuring in the face of economic shocks. Firms seek labour cooperation in the face of tighter competitive pressures and exploit institutional advantages of coordination. However, tighter cooperation with core workers sharpened insider-outsider divisions and were built upon service sector cost cutting through liberalization. The combination of plantlevel restructuring and social policy change forms a trajectory of institutional adjustment of forming complementary economic segments which work under different rules. The process is driven by producer coalitions of export-oriented firms and core workers' representatives rather than by firms per se.

The imbalance of capitalisms in the Eurozone: Can the north and south of Europe converge?

“…According to Hall and Soskice (2001), the organization of a country's political economy includes the structure of corporate governance, industrial relations, finance, social protection, the labour market, education and training (Hassel, 2012). The relations within these subsectors and their historical evolution over time produce different economic systems with distinct variants of comparative advantage.…”

Governments matter for capitalist economies: Regeneration and transition to green and decent jobs

“…fringe and less skilled workers -particularly those migrating from the east). However, the claim is that liberalisation and coordination have worked in complementary ways to manage the processes of deindustrialisation and transition more progressively (see Hassel, 2012).…”

“…Trade unions have emerged as powerful forces in German urban politics and regeneration activity (DiGaetano and Strom, 2003). Despite a more hostile climate to corporatist decision-making in recent years (between social partners and with regard to inter-union competition), wider evidence points to continued trade union influence (Burgess and Symon, 2012;Greer and Turner, 2009;Hassel, 2012).…”

Crisis-related collective bargaining and its effects on different contractual groups of workers in German and Belgian workplaces

“…9 In light of crisis-related collective bargaining in Firm1 and Firm2, the power shift weakened works councils as already pointed out in earlier studies (e.g. Hassel, 2014;Holst, 2014). Hence, a trade-off between keeping jobs and concessions on working conditions evolved as the short-term outcome for the German permanent workforces implying that the job stability of the core and the instability of the temporary workers were complementary, increasing the gap between those groups of staff (Hassel, 2014).…”

“…Hassel, 2014;Holst, 2014). Hence, a trade-off between keeping jobs and concessions on working conditions evolved as the short-term outcome for the German permanent workforces implying that the job stability of the core and the instability of the temporary workers were complementary, increasing the gap between those groups of staff (Hassel, 2014). Although Belgium has seen some organized decentralization, this has hardly impacted on the importance of sector-level agreements (Pulignano, 2012).…”