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... more than one sufficient relation, we link them together with the ‘or (+)’ termssto produce the final expression of the necessary and sufficient relationship among thesvariables (Hicks et al., 1995; =-=Ragin, 1987-=-).sat PENNSYLVANIA STATE UNIV on May 12, 2016eid.sagepub.comDownloaded froms10 Economic and Industrial Democracy 0(0) Let us note that the Boolean approach is not free of potential problems. First, th...

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...oked better, this did not reflect the reality of the economy because thesgrowth at that time was driven by foreign-investment companies which did not have asclose tie with the Irish domestic sectors (=-=OECD, 1983-=-: 15–19). Despite these macroeconomic difficulties, the wages in none of these three countries were controlled tightly. Assseen in Table 2, the Finnish and Irish figures were in mixed shape. The Briti...

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...e,semployers will push for de-coordination as a disciplinary solution for cost control. Onesproblem with this prediction however is that it focuses only on the long-term benefit ofsmarket discipline (=-=Calmfors and Driffill, 1988-=-; Crouch, 1995; Soskice, 1990), while notsconsidering any short-term disturbances that the change may trigger. Depending on howspainful the transition will be, it is always possible that employers rec...

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...d industrial actors (Ebbinghaus, 2002; Katzenstein,s1985), others have argued that the same pressure makes employers more interested in market discipline as a solution for wage control (Nissen, 2002; =-=Wood, 1994-=-). Noting this lacksof consensus in the literature, we drop the variable from the list of established causes ofsde-coordination.s4. Notice these studies examine the effect of capital openness from a f...

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...nsexplicit aspiration to join in the emerging EMU. Finland, Sweden, and the UK remainedsoutside the EMS, but could still coordinate their macroeconomic policies successfullyswith other EMS countries (=-=Eichengreen, 2008-=-). Lastly, Italy joined the group in 1990sby tightening the margin of lira fluctuation in the EMS, from the exceptional 6% to thesstandard 2.25% (OECD, 1991: 11–18). The next independent variable, the...

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... which explores the cases of de-coordination that are driven bysemployers. Several causes have been presented for the changes, which include Europeanseconomic integration (Ryner, 2002; Streeck, 1998; =-=Streeck and Schmitter, 1991-=-), thesshift in the production paradigm from Fordist mass-production to flexible specializations(Pontusson and Swenson, 1996) and post-industrialization and diversification of the jobsstructure (Garre...

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... high wage costs. By making the wage-setting process more fragmentedsand individualized, employers will be better able to save wage costs by increasingsmarket discipline against unions (Crouch, 1995; =-=Soskice, 1990-=-; Traxler, 2003: 3). Onesproblem with this hypothesis, however, is that such a disciplinary effect is realized onlysin the long run, while wage costs can even increase during the period of institution...

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...nflations (Due et al., 1995;sFerrera and Gualmini, 2000; Hall, 1986: 100–136; Hardiman, 1988: 80–120, 217–239).sThe hypothesis, however, has been challenged by other opposing experiences fromsEurope (=-=Regini, 2000-=-). Despite high capital openness, in no other country did poor wagesCorresponding author: Sung Ho Park, Department of International Relations, College of Government and Business,sYonsei University, 23...

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... 1998; Kurzer, 1993;sScharpf, 1991), however, a consensus emerged among scholars that the ultimate effectsof capital openness would vary depending on the configurations of domestic politicalseconomy (=-=Traxler, 1995-=-; Traxler et al., 2001). Several causal accounts were presented tosexplain these interactive effects, which can be summarized in the following approaches. In a performance-driven approach, the perform...

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...ed with legal/administrative regulations continued (Goetschy, 1998). In Germany, thestraditional industry-level bargaining system also continued despite some short-lived tensions in the metal sector (=-=Thelen, 2000-=-). In Denmark and Sweden, after the transition tosindustry-level bargaining in the early 1980s, employers did not attempt further decoordination (Dolvik and Martin, 2000; Due et al., 1995). Note that ...

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...s, which include Europeanseconomic integration (Ryner, 2002; Streeck, 1998; Streeck and Schmitter, 1991), thesshift in the production paradigm from Fordist mass-production to flexible specializations(=-=Pontusson and Swenson, 1996-=-) and post-industrialization and diversification of the jobsstructure (Garrett and Way, 1999). Overall, these changes led to the decline of classicssocial democracy and the weakening of unions’ power ...

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...be achieved not only by central wage agreements or government statutory guidelines (as examples of centralization), but also by informal patternsetting led by certain sub-national industrial sectors (=-=Kenworthy, 2001-=-; Traxler et al.,s2001: 149–161). Which of these two conceptualizations provides a better ground of research may notsbe answered unequivocally. Rather, the choice should depend on the purpose of a giv...

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...ic view that union solidarity will protect jobs against employers’ threat. The situation will be further complicated if general productivity is distributed disproportionately across economic sectors (=-=Traxler and Kittel, 2000-=-), specific skills are underslimited supply (Walsh, 1993), or there is a sizable public sector which is not fullysexposed to market competition (Garrett and Way, 1999). Not only can the unions insat P...

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... Finland, Ireland, and the UK, the macroeconomic indicators also remained in poorsshape until the first half of the 1990s, although they all recovered well thereafter (Baccaro,s2003; Kauppinen, 2000; =-=Rhodes, 2000-=-). In the UK, both growth and unemploymentswere worse than the European average. The Finnish figures had been good until the lates1980s, but worsened sharply around 1990 due to the Soviet meltdown and...

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...ion literature, which explores the cases of de-coordination that are driven bysemployers. Several causes have been presented for the changes, which include Europeanseconomic integration (Ryner, 2002; =-=Streeck, 1998-=-; Streeck and Schmitter, 1991), thesshift in the production paradigm from Fordist mass-production to flexible specializations(Pontusson and Swenson, 1996) and post-industrialization and diversificatio...

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...e status quo or even increased toward nationwidescoordination. In Italy, the decentralized bargaining till around 1990 was recentralizedswith non-binding tripartite talks (Ferrera and Gualmini, 2000; =-=Regini and Regalia, 1997-=-),swhich is well supported by the change of Kenworthy’s score from 2 to 4. In Belgium, thesindustry-level bargaining since the second half of the 1970s (as measured by the score ofs3) was replaced in ...

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...sde-coordination literature, which explores the cases of de-coordination that are driven bysemployers. Several causes have been presented for the changes, which include Europeanseconomic integration (=-=Ryner, 2002-=-; Streeck, 1998; Streeck and Schmitter, 1991), thesshift in the production paradigm from Fordist mass-production to flexible specializations(Pontusson and Swenson, 1996) and post-industrialization and...

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... of the 1970s replaced with company-level bargaining, but the wage-setting processsitself was ‘de-collectivized’ in the sense that wage negotiations began to bypass thesunion-based bargaining system (=-=Howell, 2005-=-).8 The new government also expressedsstrong commitment to monetarist austerity, whereby it emphasized strong sterling andsfiscal/monetary restriction as the major policy objectives. All these initiat...

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...s. By making the wage-setting process more fragmentedsand individualized, employers will be better able to save wage costs by increasingsmarket discipline against unions (Crouch, 1995; Soskice, 1990; =-=Traxler, 2003-=-: 3). Onesproblem with this hypothesis, however, is that such a disciplinary effect is realized onlysin the long run, while wage costs can even increase during the period of institutionalstransition. ...

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...ing a core monetary group in the early 1970s, following the collapse of the BrettonsWoods system. Belgium was also a part of the group, but its commitment was notsas steadfast until the turn of 1980 (=-=Hemerijck et al., 2000-=-; Kurzer, 1993: 159–163,s217–243). Entering the second half of the 1980s, other European countries began tosjoin in the group. Some countries, such as Denmark, France, and Ireland, did so in ansexplic...

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...l averages of the 1970s, which had been 2.8% and 3.4%, respectively.sWage costs however were never controlled tightly. Although strike activities remainedslow, overall wages were on a sharp increase (=-=Visser, 1998-=-). Note that the wage data forsthe period 1979–1981 are of little use here because the wages in these years were set viasa parliamentary wage freeze. Alternatively, a comparison of the wage trends bet...

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...werfulsin the wake of internationalization – responded with a series of counter-offensives,swhich ultimately led to decentralization of the solidaristic wage-setting system (Hubersand Stephens, 1998; =-=Wallerstein and Golden, 2000-=-). Given the interest of this article in searching for a more generalizable hypothesissregarding the effect of capital openness, we find the explanation based on aggregateswage costs has the greater a...

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...les). Shouldswe find more than one sufficient relation, we link them together with the ‘or (+)’ termssto produce the final expression of the necessary and sufficient relationship among thesvariables (=-=Hicks et al., 1995-=-; Ragin, 1987).sat PENNSYLVANIA STATE UNIV on May 12, 2016eid.sagepub.comDownloaded froms10 Economic and Industrial Democracy 0(0) Let us note that the Boolean approach is not free of potential proble...

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... 1991), thesshift in the production paradigm from Fordist mass-production to flexible specializations(Pontusson and Swenson, 1996) and post-industrialization and diversification of the jobsstructure (=-=Garrett and Way, 1999-=-). Overall, these changes led to the decline of classicssocial democracy and the weakening of unions’ power vis-a-vis employers’ (Streeck,s1993). Employers were then expected to exploit their favorabl...

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...tem. The sense of the French crisis began tosspread only around the mid-1980s, when the inefficiency of the state-led economysbecame evident but the socialist reflation failed to address the problem (=-=Levy, 1999-=-:s23–56). The cases with monetary commitment: The measurements Turning next to groups C and D, their configurations were different from the previousscases. With regard to the level of capital openness...

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...ployers’ (Streeck,s1993). Employers were then expected to exploit their favorable situation to abolish thesEuropean model of central wage coordination and strengthen market discipline againstsunions (=-=Thörnqvist, 1999-=-; Traxler, 2003).2 We revisit this literature by focusing on the role of economic integration. In particularswe pay close attention to the financial aspect of the process, which has been discussedsat ...

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...98; Streeck and Schmitter, 1991), the latter has demonstrated thatsthe coordinative form of macroeconomic governance still remains feasible in Europes(Avdagic et al., 2011; Fajertag and Pochet, 2000; =-=Hamann and Kelly, 2011-=-). Whilesthere has been an overall shift in the power relations between employers and unionssand, as a result, the emphasis in wage deals has shifted toward cost containment andsproductivity away from...

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...s was definedsbroadly as the extent to which capital owners can (re)locate their assets freely across thesnational border, as exemplified by the liberalization of cross-border financial transactions (=-=Quinn, 1997-=-). Among the major questions raised was if the European wagesetting model – which had been characterized by a high degree of intra-and inter-industryscoordination – could survive the pressure of high ...

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...cult to understand that the unions will take a maximalist approach instheir wage negotiations. Such militancy will then spread to other unions as a good reference point for fair wages (Traxler, 1995; =-=Walsh, 1993-=-). True, these latter unions may notsenjoy such strong power, meaning that they would be concerned with the possibility thatswage militancy could jeopardize their jobs. They nonetheless are pressed to...

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...ey suffer from high wage costs. By making the wage-setting process more fragmentedsand individualized, employers will be better able to save wage costs by increasingsmarket discipline against unions (=-=Crouch, 1995-=-; Soskice, 1990; Traxler, 2003: 3). Onesproblem with this hypothesis, however, is that such a disciplinary effect is realized onlysin the long run, while wage costs can even increase during the period...

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...able. While some scholars have asserted that the pressure ofscompetitiveness promotes central wage coordination by broadening a consensus for stableswage management among organized industrial actors (=-=Ebbinghaus, 2002-=-; Katzenstein,s1985), others have argued that the same pressure makes employers more interested in market discipline as a solution for wage control (Nissen, 2002; Wood, 1994). Noting this lacksof cons...

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...cy will lead to further deterioration of the already weak businesssactivities. Worried by profit squeeze, employers will therefore strive hard to find a goodssolution for cost control (Baccaro, 2003; =-=Hanke and Rhodes, 2005-=-; Hassel, 2003). The mediating effect of the monetary commitment What will be the implications of this economic pressure for the hypothesis of capitalsopenness? The answer appears to be evident. Given...

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...ge employers to stay with the status quo of the wage-setting system, whereasspoor performance would motivate them to use their power to seek a change. Goodsexamples include Denmark (Due et al., 1995; =-=Iversen and Thygensen, 1998-=-), Irelands(Hardiman, 1988), Italy (Ferrera and Gualmini, 2000) and the UK (Hall, 1986: 100–136;sScharpf, 1991) around the early 1980s, where the events of de-coordination had been allspreceded by uni...

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...on between industry-level bargaining (measured by the score ofs3) and non-binding central bargaining (with the score of 4), until industry-level bargaining was finally established in the early 1990s (=-=Kjellberg, 1998-=-). Finally, Austria and the post-1982 Netherlands exhibited the best cases of economicsperformance. Austria boasted all better figures than the European average. The Dutchsfigures were also close to t...

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...even more challenging in the tradable manufacturing sector, where employers had already been suffering seriously from the loss of competitiveness in the European product markets(Middlemas, 1991: 241; =-=Pollard, 1992-=-: 380–381, 386).sat PENNSYLVANIA STATE UNIV on May 12, 2016eid.sagepub.comDownloaded fromsPark 21 With all these challenges in the course of de-coordination, British employers changedstheir position a...

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...e private sectors played a crucial role in this process, assillustrated by their repeated challenge to scala mobile – a wage indexation formulaswhich provided the nationwide floor for wage increases (=-=Regalia and Regini, 1998-=-). As seen in Table 2, all these events of de-coordination were closely associated withsthe failure of wage moderation. First, the economy was in poor condition in all cases.sLooking at the trends of ...

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...s2. Meanwhile, unions have often played an important role in the change to de-coordination – assillustrated by Sweden around the early 1980s (Pontusson and Swenson, 1996), Austria in thesearly 1980s (=-=Traxler, 1998-=-), and Finland in the late 1990s (Hamann and Kelly, 2011: 105).sExisting studies have dealt with this issue as a relatively separate research agenda, and havesidentified several causes at play such as...

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... were worsening sharply as the end of the 1970s approached. From 1979s(when the Dutch government realized the economic problem was so serious that itsdecided to respond with ultra-austerity policies [=-=Visser, 1990-=-]) to 1981 (the last yearsbefore the pact of Wassenaar), the averages for GDP growth and unemployment weres–0.7% and 6.1%, respectively. These figures were not only worse than the Europeansaverages of...

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...ers weresfully supportive of the efforts, expecting that the combination of market discipline andsnon-accommodation would send unions a clear message that wage militancy would noslonger be tolerated (=-=CBI, 1979-=-: 4). These policy initiatives however did not meet expectations. De-coordination provoked an unintended consequence of wage increases pushed for by deregulated wagesnegotiators. Unions and un-unioniz...

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...l problem in the British economy, the CBIs(the peak national confederation for British employers) made it clear that the situationswas unnecessarily exacerbated by restrictive macroeconomic policies (=-=CBI, 1981-=-: 28;sEIRR, 1983). To alleviate the stress, sterling should be allowed to fall flexibly. Monetary/ fiscal contraction should also be relaxed to allow lower interest rates and better creditssupply (Mil...

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...onetary restriction as the major policy objectives. All these initiatives weresdeemed necessary in the fight against wage inflation which had been the major source ofsthe profit squeeze in the 1970s (=-=CBI, 1982-=-: 14–17; Miller et al., 1983). Employers weresfully supportive of the efforts, expecting that the combination of market discipline andsnon-accommodation would send unions a clear message that wage mil...

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...ood examples include Denmark, Ireland, Italy, andsthe UK around the early 1980s, where the wage-setting process was more fragmentedsand individualized after certain periods of wage-pushed inflations (=-=Due et al., 1995-=-;sFerrera and Gualmini, 2000; Hall, 1986: 100–136; Hardiman, 1988: 80–120, 217–239).sThe hypothesis, however, has been challenged by other opposing experiences fromsEurope (Regini, 2000). Despite high...

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...9 led to a wagesetting system in which many un-unionized workers negotiated their wages directlyswith their managers, thereby bypassing the traditional procedure of union-based collective bargaining (=-=Edwards et al., 1998-=-; Waddington, 2000). In Italy, the companylevel tier also began to assume a more prominent role in the national wage-settingssystem. Employers from the private sectors played a crucial role in this pr...

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...e British economy, the CBIs(the peak national confederation for British employers) made it clear that the situationswas unnecessarily exacerbated by restrictive macroeconomic policies (CBI, 1981: 28;s=-=EIRR, 1983-=-). To alleviate the stress, sterling should be allowed to fall flexibly. Monetary/ fiscal contraction should also be relaxed to allow lower interest rates and better creditssupply (Miller et al., 1983...

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...h, 1993).9 Government’s restrictive policies did not help either. Despitesthe success in holding down public sector wages, they had little effect in moderatingswage competition in the private sector (=-=EIRR, 1984-=-; Hall, 1986: 100–136). Instead, thesausterity policies added further difficulty to businesses because now employers had tosbear the burden of rising wage costs all by themselves. The situation was ev...

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...nds, in none of the four countries did employers make a serioussattempt at de-coordination. In France, company-level bargaining which had been coupled with legal/administrative regulations continued (=-=Goetschy, 1998-=-). In Germany, thestraditional industry-level bargaining system also continued despite some short-lived tensions in the metal sector (Thelen, 2000). In Denmark and Sweden, after the transition tosindu...

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...1.5% to –0.2%. In Finland, Ireland, and the UK, the macroeconomic indicators also remained in poorsshape until the first half of the 1990s, although they all recovered well thereafter (Baccaro,s2003; =-=Kauppinen, 2000-=-; Rhodes, 2000). In the UK, both growth and unemploymentswere worse than the European average. The Finnish figures had been good until the lates1980s, but worsened sharply around 1990 due to the Sovie...

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... the industry bargaining system along with non-binding central guidance (as measured by the scores of 3 ands4) continued, but with an increasing emphasis on peaceful wage moderation (Kauppinen,s2000; =-=Kauppinen and Waddington, 2000-=-). In Ireland, company-level bargaining withsweak pattern-setting was recentralized with a series of binding/non-binding tripartitessocial pacts, as measured by the change of scores from 1 to 4 and 5 ...

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...es. The situation was even more challenging in the tradable manufacturing sector, where employers had already been suffering seriously from the loss of competitiveness in the European product markets(=-=Middlemas, 1991-=-: 241; Pollard, 1992: 380–381, 386).sat PENNSYLVANIA STATE UNIV on May 12, 2016eid.sagepub.comDownloaded fromsPark 21 With all these challenges in the course of de-coordination, British employers chan...

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...n as the major policy objectives. All these initiatives weresdeemed necessary in the fight against wage inflation which had been the major source ofsthe profit squeeze in the 1970s (CBI, 1982: 14–17; =-=Miller et al., 1983-=-). Employers weresfully supportive of the efforts, expecting that the combination of market discipline andsnon-accommodation would send unions a clear message that wage militancy would noslonger be to...

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...among organized industrial actors (Ebbinghaus, 2002; Katzenstein,s1985), others have argued that the same pressure makes employers more interested in market discipline as a solution for wage control (=-=Nissen, 2002-=-; Wood, 1994). Noting this lacksof consensus in the literature, we drop the variable from the list of established causes ofsde-coordination.s4. Notice these studies examine the effect of capital openn...

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... system in which many un-unionized workers negotiated their wages directlyswith their managers, thereby bypassing the traditional procedure of union-based collective bargaining (Edwards et al., 1998; =-=Waddington, 2000-=-). In Italy, the companylevel tier also began to assume a more prominent role in the national wage-settingssystem. Employers from the private sectors played a crucial role in this process, assillustra...