The French and German political economies have been significantly reconfigured over the past two decades. Although the changes have often been more piecemeal than revolutionary, their cumulative effects are profound. The authors characterize the changes that have taken place as involving the institutionalization of new forms of dualism and argue that what gives contemporary developments a different character from the past is that dualism is now explicitly underwritten by state policy. They see this outcome as the culmination of a sequence (...) of developments, beginning in the field of industrial relations, moving into labor market dynamics, and finally finding institutional expression in welfare state reforms. Contrary to theoretical accounts that suggest that institutional complementarities support stability and institutional reproduction, the authors argue that the linkages across these realms have helped to translate employer strategies that originated in the realm of industrial relations into a stable, new, and less egalitarian model with state support. (shrink)

Despite continued social protest, something quite fundamental has changed in the regulation of class relations in France. This article explores two paradoxes of this transformation. First, a dense network of institutions of social dialogue and worker representation has become implanted in French firms at the same time as trade union strength has declined. Second, the transformation has involved a relaxation of centralized labor market regulation on the part of the state, yet the French state remains a central actor in the (...) reconstruction of the industrial relations system. Institutional reform of industrial relations could not take place without the active intervention of the state because employers and trade unions alone were unable to create durable industrial relations institutions. The collapse of trade unionism meant the need for new actors on the labor side and only the state could both create and confer legitimacy upon those new actors. (shrink)