Visible and invisible hands in the transnational wage setting in Europe

Aarron Toal, Durham University Business School

This paper addresses the question how in Europe a common transnational strategy among industrial relations actors and cooperation between actors can evolve over time and what the consequences are. More specifically, if a common transnational strategy and cooperation is beneficial not only for industrial relations actors themselves, but also for the economy and society, is a common strategy evolving by itself on basis of existing formal and informal institutional channels of interactions over time or do we need new institutions, rules and incentives from ‘outside’? And if new institutions and rules are needed which of them are politically feasible and realistic? In other words are the mutual benefits sufficient so that national actors can pull themselves towards a common strategy or, in the case of Europe, do national actors need to be pushed by European ‘authorities’? In any way a common strategy among national actors is a question of transnational coordination between actors which only works under certain conditions. On basis of results of a current research project and of previous case studies the prerequisites and conditions for transnational coordination between actors are identified and integrated in a micro theoretical model of action and interaction. With this approach, different formal and informal institutional channels of interactions are analysed in order to explain how a European ‘system’ of industrial relations can be established and maintained over time.

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