Determinants of Social Pacting in Western Europe (1974-2005): An Event-History Analysis
Sociology Department University of Geneva Geneva, Switzerland
Institute for Work and Employment Research MIT Cambridge, USA
In this paper we address the conditions (economic, political and institutional) in which European governments decide to share their policy-making prerogatives with employer and worker organizations.
We identify several problems with prior work and draw out those problems? methodological implications. First, most research has drawn primarily on country case studies; as a result, it has produced several theoretical explanations of the phenomenon at hand, but very few systematic tests of hypotheses. Second, prior quantitative research has relied on a time-series cross-sectional methodology, i.e., on a methodology which due to its assumptions is ill-suited to a quintessentially dynamic phenomenon like social pacting. Third, prior research has focused on the determinants of pacts by examining successfully concluded agreements. Doing so ignores that many theorized determinants of pacts should produce a process of negotiation but that negotiations can (and often do) fail. By selecting on successful cases, such work introduces sample bias. Finally, much attention has been paid to the initial pact signed in a country, but in many countries social pacts become institutionalized through the very mechanisms, such as planned re-negotiations, included in the agreement. Ignoring the inherently repeat nature of these events exaggerates the impact of economic and political forces and downplays the resulting organizational routines.
We address these problems with a unique dataset that codes on a monthly basis both for the beginning of formal pact negotiation and for any agreements reached. We use an event-history statistical methodology. We also model the repeat nature of pacts explicitly by using conditional frailty models, which control both for unobserved heterogeneity across countries and for event-dependence between subsequent negotiations and pacts. We find no support for effects of party composition or the electoral cycle once these corrections are made. While some economic phenomena, such as debt and inflation, still help predict pact negotiation, such economic effects are dwarfed by what we call ?institutional inertia? effects, i.e. by the fact that these practices often become institutionalized independently of the particular conditions that bring them about.