ILO - The role of the social partners in the design and implementation of active measures - Hugh Mosley, Tiziana Keller, Stefan Speckesser

EMPLOYMENT AND TRAINING PAPERS
27

The role of the social partners in the design and implementation of active measures

Hugh Mosley
Tiziana Keller
Stefan Speckesser

Social Science Research Centre, Berlin

ISBN 92-2-111287-X
ISSN 1020-5322
First published 1998

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Foreword
I.	Comparative report: The role of the social partners in the design and implementation of active measures
II.	Case studies: The role of the social partners in France, Germany, the Netherlands, and the United Kingdom
III.	Statistical appendix: Corporatism and active labour market policy: Emperical evidence from OECD data
Bibliography

List of Tables
Table I.1	Institutional regimes of active labour market policy in OECD countries, 1997
Table I.2	Synopsis of employment service regimes and their impact on active policies
Table I.3	Corporation ans PES tripartism in OECD countries
Table I.4	Average expenditure for ALMP by PES tripartism and strength of corporatism, 22 OECD countries, 1994
Table I.5	Types of conflicts in employment service regimes: France, Germany, the Netherlands, the United Kingdom
Table III.1	Data on unions in the OECD countries
Table III.2	Corporation indicators
Table III.3	Wage differentials
Table III.4	Expenditure for active and passive labour policy in OECD countries
Table III.5	Cross-correlations all OECD countries
Table III.6-1	Regression estimates for level and composition of ALMP programmes expenditure 1985-1990
Table III.6-2	Regression estimates for level and composition of ALMP programmes expenditure 1990-1994
Table III.7	Descriptive statistics

List of Figures
Figure 1	Union density by type of welfare states, 19 OECD countries
Figure 2	Coverage rate by type of welfare states, OECD countries
Figure 3	Expenditure for labour market policy by all OECD countries
Figure 4	Expenditure for labour market policy by all OECD countries
Figure 5	Expenditure for labour market policy by all OECD countries
Figure 6	Activity rates of labour market policy expenditure
Figure 7	Expenditure of training as share of all active expenditure
Figure 8	Average activity rate of LMP by type of welfare state regime, 1986-1994, 20 OECD countries
Figure 9	Expenditure for labour market policy by tripartism administration, 19 OECD countries
Figure 10	Expenditure for labour market policy by tripartism, 19 OECD countries
Figure 11	Expenditure for labour market policy by tripartism, all OECD countries
Figure 12	Short-term replacement rates by tripartism in labour administration, all OECD countries, 1988
Figure 13	Long-term replacement rates by tripartism in labour administration, all OECD countries, 1988

Foreword

This paper examines the forms of involvement of the social partners in formulating and implementing active labour market policies (ALMPs). The study begins with a summary on the role of the social partners in the design and implementation of active measures, followed by four national case studies for France, Germany, the Netherlands and the United Kingdom. In a separate section, a quantitative analysis is added to establish a statistical relationship between patterns of industrial relations and levels of expenditure on ALMPs in OECD countries.

Two principal channels of influence of the social partners have been identified in this study: first, general political influence, a salient feature in particular for countries with corporatist industrial relations, and second, influence through tripartite participations in the management of public employment services. In addition, the authors briefly review other possible channels of influence of the social partners through the organization of training and employment programmes and through collective bargaining.

The authors acknowledge that these two most important channels of influence of the social partners have been weakened for two reasons. First, generally speaking the institutions of corporatism are less influential than in the past due to the globalization of production and the declining influence of trade unions. Next, the principle of independence of public employment services has been eroded by increased interventions of governments due in part to resource constraints of the employment service agencies.

By examining the public employment services of four Western European states in detail, the authors come to the following conclusion: rather than the institutionalized form of participation by social partners in the administration of public employment services per se, the presence of cooperative social dialogue and partnership in corporatist institutions on the societal level is the key to facilitate the effective design and implementation of ALMPs. Such a cooperative culture of industrial relations is deeply rooted in national traditions. While it is more difficult to build up and sustain effective ALMPs under the tripartite framework in countries with no tradition of social partnership, efficient tripartite involvement in policy making and in the implementation of ALMPs itself might promote social partnership and corporatist structure in the long run.

Gek-Boo Ng
Chief
Employment and Labour Market Policies Branch

I. COMPARATIVE REPORT: THE ROLE OF THE SOCIAL PARTNERS IN THE DESIGN AND IMPLEMENTATION OF ACTIVE MEASURES

1. Introduction: The "social partners" and active labour market policies⁽¹⁾

The terms "social partners," i.e. employer and employee representatives, and "social partnership," i.e. the (idealized) co-operative relationship between them, are frequently encountered in the industrial relations literature and policy discussions. Although the terms themselves are apparently of Austro-German origin,⁽²⁾ the ideas behind them are certainly found more or less strongly represented in other countries as well. "Social partnership" as a philosophy for dealing with social conflict between capital and labour has diverse intellectual roots in late 19th and early 20th century ideological currents in Europe, especially in Catholic social theory, e.g. Rerum Novarum (1891) and Quadregesimo Anno (1931), reform liberalism, and reformist wings of the trade unions and socialist parties. In contrast to laissez-faire liberalism, the philosophy of "social partnership" advocated recognition of workers' rights, including the right to trade union organization, and co-operative industrial relations in collaboration with workers' representatives. In contrast to socialist and Marxist protagonists of class conflict and revolutionary change, advocates of social partnership strove for an accommodation of the interests of capital and labour and for constructive reform.

In more contemporary terms, conflict between capital and labour is not regarded as a zero-sum game, in which one party gains only at the expense of the other, but as a positive-sum game in which both parties stand to gain from co-operative solutions (or both might lose as a result of non-cooperative behavior). The common interest of the social partners is in the economic prosperity of the firm, industry or national economy at the micro, meso and macro levels respectively. Interest conflicts pertain primarily to the terms of the 'partnership,' i.e. distributional issues (wages and benefits) with respect to the co-operative gain. Moreover, an important premise of "social partnership" is the right of employees to form unions to represent their interests, which still has not been universally achieved. State regulation plays of course a constitutive role for the interest organizations of the social partners and for the industrial relations system; social partnership is in fact a ménage à trois.

Since this report is concerned with the role of the social partners in the design and implementation of "active measures," some remarks about the meaning of the latter term are appropriate. The term "active labour market policy," in contrast to "passive" labour market policy, has been widely disseminated in policy communities by the OECD, although it is not uncontroversial (e.g. Dayan 1995; Therborn 1985). Citing the OECD as the origin of the term, the ILO offers the following definition: "purposive, selective interventions by the government in the pursuit of efficiency and/or equity objectives, acting indirectly or directly to provide work to, or increase the employability of people with certain disadvantages in the labour market." The OECD includes the following categories of labour market policy expenditure as active policies:1) Public employment services and administration; 2) labour market training for unemployed and employed adults; 3) youth measures; 4) subsidized employed (e.g. wage subsidies and direct job creation); 5) measures for the disabled.⁽³⁾

In examining the role of the social partners with regard to active labour market policies, it is useful to distinguish four different channels of influence:

Corporatism: The special role of the organizations of the social partners in the political decision-making process, especially with regard to economic and social issues that affect them. Like other societal actors, the social partners participate in and exercise influence through the general political process. In many countries the organizations of the social partners have a special relationship with government with respect to policy making on economic and social issues, which has been analyzed in political science under the heading of "neo-corporatism." Corporatist patterns in wage bargaining and their impact on economic performance have been analyzed in industrial relations and economics (e.g. Appelbaum and Schettkat and 1997). This is not the place to enter into a detailed discussion of various definitions of corporatism in the recent literature. Suffice it to say that, in contrast to pluralist theory, the neo-corporatist approach stresses the importance of organized interests, especially the role of employers' organizations and trade unions, in regulating industrial relations and in policy-making (Marks et al. 1997; Traxler 1993).
Tripartism in employment services: Institutionalized direct participation in the formulation and implementation of labour market policies, especially in tripartite labour market authorities. In all OECD countries the social partners have some type of more or less formal role in the formulation of labour market policies. In some countries this takes the form of the establishment of advisory bodies to employment services or labour ministries, which is mandated by ILO convention No. 88, the "Employment Service Convention" of 1948. Article 4 of this convention stipulates that: "Suitable arrangements shall be made through advisory committees for the co-operation of representatives of employers and workers in the organization and operation of the employment service and in the development of employment service policy." These representatives "shall be appointed in equal numbers after consultation with representative organizations of employers and workers, where such organizations exist." The formal institutionalization of tripartism in the management of quasi-independent labour market authorities, i.e. a direct and permanent role for the social partners in the governance of the public employment service, is not mandated by the ILO convention and less common.⁽⁴⁾
Programme participation: An important dimension of the social partners in active labour market policies is their participation as providers or as sponsors of measures, for example, as training providers or as sponsors for job creation programmes in the private sector. Evaluation studies show that schemes in which private firms are involved, often yield better results in terms of employment performance, which suggests that involvement of private firms may be crucial to the success of ALMP schemes (OECD 1996; ILO 1998). In many countries enterprise-based active measures may require the co-operation or even approval of employee representatives as well.
Collective bargaining: Pursuit of labour market policy goals through collective agreements. Active labour market policy usually means public labour market policy, excluding per definition active policies on the basis of collective agreement. Nevertheless, public labour market policies may be linked to collective agreements, for example, programmes to promote reductions in working time or early retirement may be predicated on regulation by a collective agreement at the firm or industry level. Moreover, the social partners may themselves initiate policies by collective agreement to promote employment (e.g. reductions in collective working time) or the integration of problem groups (e.g. special entry wages for certain groups) at the firm or industry level.

Of the four principal types of influence of the social partners on active measures identified, this study focuses in particular on national experiences with tripartism in public employment services. To our knowledge this subject has never been systematically examined in a comparative perspective. The second major focus of the comparative report is on the impact of corporatist forms of co-ordination on labour market policies; which is investigated in an empirical study of the impact of social partnership on the level and composition of labour market policy expenditure in OECD countries. More detailed information on the role of corporatist forms of interest representation, tripartite employment service institutions, and the linkage to collective bargaining are reported below in the national case studies. The role of the social partners as programme participants (e.g. providers, sponsors) is beyond the scope of this study.

2. Tripartism in public employment services

2.1 Organizational patterns of active labour market policy in OECD countries

The delivery systems for active labour market policies differ markedly across OECD states. Nine countries (Austria, Canada, Germany, Greece, Italy, Japan, Luxembourg, Norway, Spain) have fully integrated public employment services which are responsible both for active and passive labour market policy, i.e. for the main national active programmes (placement services, training, employment programmes ) as well as for the administration of unemployment benefit (see table 1). Eight countries (Belgium, Denmark, Finland, Ireland, Netherlands, Portugal, Sweden, Switzerland) have partially integrated institutional regimes, i.e. the main national programmes for active measures are administered by a single local employment service agency. In four countries (Australia, France, the United Kingdom, United States) the delivery system for active programmes is fragmented in two or more agencies.

Almost one half (10 of 21) or five fully integrated and four partially integrated public employment services have tripartite self-administrations as does the placement service in the fragmented French delivery system. Moreover, there has been considerable change in recent years; both Sweden and the United Kingdom abandoned tripartism in the early 1990s while Austria and the Netherlands established quasi-independent employment services with tripartite self-management for the first time.

The role of the social partners in the organization of unemployment benefit should also be mentioned. In addition to their role in countries with fully integrated tripartite organizations as noted above, the social partners are responsible for the administration of unemployment benefits in France and the Netherlands and the trade unions alone in the Scandinavian countries (except Norway). It should be noted parenthetically that efforts in a number of countries to "activate" labour market policy, have led agencies responsible for unemployment benefit to initiate active programmes , which has further complicated the implementation structure for active policies (e.g. France, the Netherlands, Belgium).⁽⁵⁾

Among the four countries included in our study, Germany represents an example of a country with a fully integrated employment service responsible for both active and passive measures with a long and uninterrupted tradition of tripartism. The Netherlands is a country with a partially integrated employment service in which responsibility for administration of active and passive measures is divided between a tripartite public employment service and bipartite sectoral unemployment insurance funds. In contrast to Germany, direct involvement of the social partners in the administration of a quasi-independent labour market authority was first introduced in the Netherlands in 1991 and substantially modified in 1997. In the fragmented French institutional regime, not only is a separate organization, the bipartite UNIDEC, responsible for passive benefits but even responsibility for the implementation of active measures is divided between the labour ministry and its departmental offices, the public employment service (ANPE), and AFPA, the national training authority; both ANPE and AFPA have tripartite administrative bodies. In the United Kingdom the previous tripartite labour market authority, the Manpower Service Commission, was abolished at the end of the 1980s, and responsibility for active measures was divided between the Employment Service and the privatized Training and Enterprise Councils, which are responsible for labour market training and for most active programmes except placement services.

2.2 Theories and expectations about tripartism

Tripartism in employment service institutions can be regarded as a problem of institutional design. Should the social partners be given direct and privileged responsibility for labour market policy in tripartite labour administrations? We do not think that there is any general answer to this question that is applicable in all countries and under all circumstances. Nevertheless, a survey of national experience with this institutional form in labour market policy does shed light on the potential strengths and possible shortcomings of tripartism in labour market institutions. This section briefly summarizes five principal theories and expectations, both positive and negative, associated with the involvement of the social partners in tripartite employment service institutions. In the following sections, evidence on each of these topics or hypotheses is assessed based on evidence from our survey of national experience with tripartism in the case studies reported below.

Influence of the social partners on policy making: A principal expectation is that tripartite labour market authorities give the social partners real influence on labour market policy above and beyond that which they have through other more general forms of participation in the political process (e.g. party politics, lobbying) or a merely advisory role. As discussed below, the actual influence exercised by the social partners on labour market policy through tripartite institutions is in fact more limited than their formal role suggests.
Legitimation and lobbying function: Tripartism is assumed to increase public support for active measures because it is indicative of a broad consensus and represents a long-term and formalized commitment on the part of the powerful societal actors.
Multi-actor policy co-ordination: The inclusion of representatives of the social partners and other public organizations in PES governance is expected to facilitate co-operation and induce other actors to coordinate their own activities better with PES policies;
Internal conflict and deadlock: The number and diversity of the actors represented in PES governing bodies may make decision-making more cumbersome and in worst cases result in politicization.
Insider policies: A classical problem of the devolution of responsibility for government functions to private actors is that the social partners like other organized interests may not adequately reflect the public interest or even that of all their members.

Table 1. Institutional regimes of active labour market policy in OECD countries, 1997

	Fully Integrated	Partially Integrated	Fragmented	Total
Tripartite self-administration	Austria (since 1994) Canada Germany Greece Luxembourg	Belgium Ireland Netherlands (since 1991) Portugal	France	10
Ministry or other	Italy Japan Norway Spain	Denmark Finland Sweden (since 1991) Switzerland	Australia (since 1997) UK (since 1990) USA	11
Total	9	>8	4	21
Sources: Compiled from OECD 1996; European Commission, Employment Observatory, MISEP Basic Information Reports and national sources. Notes: In fully integrated systems PES offices are responsible for unemployment benefit administration, placement services, and referral to active measures (training, subsidized employment etc.) whereas in partially integrated systems the main active measures (placement services, and referral to training, subsidized employment etc.) are integrated in the same agency but not unemployment benefit administration. In fragmented regimes responsibility for major types of active measures is dispersed in two or more agencies. No information is available for Iceland and New Zealand. Dates in parentheses refer to introduction or abandonment of tripartism in PES institutions.

2.3 The influence of the social partners on active policies

A formal role for the social partners in tripartite institutions does not necessarily mean a realinfluence on active policies. The influence of the social partners depends on the extent to which tripartite employment service institutions exercise real autonomy vis-à-vis the state and on the influence of the social partners within them. Our survey of experience with tripartism in four countries indicates that the parameters of labour market policy are clearly set by law and by government policy, which the social partners may influence through other political channels. Tripartite public employment service institutions play an important but clearly subordinate role in policy-making; their principal influence is rather at the level of policy implementation. There are of course important national differences in the role and influence of the social partners. This section presents a comparative overview and assessment of the influence of the social partners in four employment service regimes with tripartite institutions.

The Netherlands

In the Dutch Arbeidsvoorziening,⁽⁶⁾ both the central and the regional boards of the new labour market authority, which is formally independent of the labour ministry, are tripartite bodies. During the 1991-1996 period, the central board (CBA) consisted of three representatives of the national organizations of the employers and trade union and three state representatives (Ministry of Labour and Social Affairs, Economics Ministry, Education Ministry), while the regional (RBA) offices included representatives of employers, trade unions, and the municipalities. At both the national and regional levels a qualified majority of 2 representatives of each group in the tripartite board was required for substantive decisions, i.e. any group could veto a decision. The fact that the government had only three seats on the central PES board and the need for a qualified majority meant too that policy could not be dictated by the labour ministry.

The new labour market authority was intended to be completely independent from the Ministry for Labour and Social Affairs. This was reinforced inter alia by giving the new organization its own statutory budget, which was supposed to provide stable financing for a multi-year period. The autonomy of the regional PES offices was reinforced by placing them under the direct control of the tripartite regional employment boards without any hierarchical subordination to the national PES office. The central board and office merely formulated overall guidelines for labour market policy. The central board was authorized to issue a directive to the regional boards only if 6 of the 9 voting members approved such a measure; moreover, this extraordinary majority had to include at least two voting members from each group on the central board.

After an evaluation of the employment service in 1995, the Dutch cabinet endorsed a number of changes in the way tripartism is implemented. Most importantly, decisions in the future will not be based on qualified majority voting but a simple majority will suffice, i.e. the group veto was eliminated. Moreover, the board members will in the future be expected to hold office in the public interest and not as interest group representatives; an even stronger proposal in the evaluation report to limit social partners' right of nomination to persons not on the payroll of these organizations was not implemented. The government itself will no longer be directly represented in the central labour market board (CBA) but will nominate independent representatives of the public interest. However, a number of changes greatly reduce the independence of the PES and its regional offices in contrast to the previous structure: The supervisory role of the Ministry of Social Affairs with respect to policies and financing was strengthened, and the responsible minister may now issue directives to the PES. Furthermore, the PES central broad is now required to confer on policies with the minister of social affairs, and its budget is subject to the annual appropriations process.

Germany

The German Federal Employment Service (Bundesanstalt für Arbeit; BA) is the product of a long tradition of tripartism in labour market institutions and of social partnership in industrial relations. It is a self-governing body incorporated under public law that is responsible for both active policies (placement, vocational counseling, labour market training and other active programmes) as well as for the administration of unemployment benefits. Its self-governing organs have a tripartite structure with equal representation of employees, employers and public bodies (Federal and Land Governments, and local governments). This principle is applied both at the national level of its Governing Council (Verwaltungsrat) and Executive Board (Vorstand) as well as at the level of the regional and the local employment offices with their tripartite administrative committees (Verwaltungsausschüsse). Representatives of the social partners are appointed on the basis of nominations from employers' and trade union organizations at the respective levels (§195 AFG).⁽⁷⁾

The BA's tripartite Council and Executive Board play an important role in the selection of principal BA officers. The presidents and vice-presidents of the BA and of the Land regional labour offices are nominated by the Federal government and appointed by the Federal President. However, the Federal government is required to consult with the BA's tripartite governing Council before making nominations and may deviate from its advice only for "serious reasons." Other top officials of the BA are nominated by the BA's executive board. (§211 AG).

The Council enacts the statutes of the BA and issues decrees and regulations within the scope of its autonomy. It must ratify the budget proposed by the Executive Board, which must subsequently be approved by the Federal Government. The BA is financed through unemployment insurance contributions by employers and employees, the contribution rate is, however, determined by statute and not by the BA itself.

Despite its status as a self-governing institution, the BA's independence is in practice limited. Both administrative regulations (Anordnungen) and the budget approved by its Council require the approval of the Federal Minister for Labour and Social Affairs (and in some cases the Minister of Finance). Moreover, regulations and, under certain circumstances, budgetary changes can be directly imposed by the Minister if the BA's own administration fails to comply with his instructions (§191, §216 AFG).

The limited autonomy of the BA vis-à-vis the government is best illustrated by the budget process (Linke 1994; Bruche and Reissert 1984). Although the BA has its own budget and separate funding through contributions to unemployment insurance,⁽⁸⁾ it has no control over the contribution rate on the revenue side nor, for example, over benefit levels or training stipends, which are fixed by statute. Moreover, its budget it has to be approved by the Federal Government (the Minister for Labour and Social Affairs). Since 1993 the Minister can implement the budget on his own authority if the Council does not accept the budgetary stipulations imposed by the Minister. This situation can arise, only if the BA's budget is in deficit (§216 AFG), i.e. it is unable to finance proposed expenditures through its own resources (unemployment benefit contributions) and any reserves it may have accumulated). However, the current high levels of structural unemployment and the high costs of transfers to East Germany mean that there is a chronic budget deficit and that, consequently, the BA has experienced a significant loss of independence (Linke 1994).

The United Kingdom The British Manpower Services Commission (1973 - 1988) integrated training and placement services in an independent, tripartite labour market authority with its own budget, personnel administration and subordinate regional and local organizations. Although responsible for most active programmes , the MSC was by design strictly separated from the aministration of unemployment benefits, which was the responsibility of a separate organization within the Employment Department.

The MSC's tripartite governing body included three trade union and three employer's representatives, two representatives of local authorities, one member from the vocational training sector, and a chairman chosen by the government. Although formally independent of the government in its day-to-day operations, the MSC was clearly subordinate to government policy: Its chairman was chosen by the government, and its proposals had to be approved by the responsible minister. Moreover, its budget was controlled though the MSC's dependence on annual grants in the government budget. The MSC may have been capable of exercising influence, but it was never independent (Evans 1992:16-17). This relatively centralized organization also had tripartite Area Manpower Boards, which were supposed to provide a mechanism for co-ordination at the operative regional level, but they had only advisory status. The MSC was abolished after the withdrawal of trade union representation in connection with the controversy over the introduction of the Employment Training programme for the adult unemployed. ⁽⁹⁾ In retrospect it is not the abolition of the MSC but the survival and even expansion of this corporatist institution during the 1980s under the Thatcher government that is noteworthy.⁽¹⁰⁾

Subsequently the government delegated responsibility for training and most active measures to the Employer-led Training and Enterprise Councils (TECs). The TECs carry out the planning, management, and control tasks in the delivery of training and enterprise programme s that were previously the responsibility of the former tripartite Manpower Services Commission. In essence these management functions have now been contracted out to private organizations with governing bodies in which local employers have by law a 2/3 majority.⁽¹¹⁾

France

Responsibility for the implementation of labour market policy is highly fragmented in France, The main French employment service institutions are ANPE (French National Employment Office), AFPA (Adult Professional Education Association), UNEDIC (National Union for Industrial and Commercial Employment), FNE (French National Employment Fund)⁽¹²⁾ and the employment ministry (organized at different levels). Of these institutions ANPE and AFPA have tripartite structures in which the social partners formally share authority with public representatives. UNEDIC is by contrast in form a purely bipartite institution based on a national agreement between representatives of the social partners. This section focuses on ANPE and UNEDIC, the two most important channels of influence of the social partners on labour market policy in the French employment service regime.

ANPE ("Agence Nationale Pour l'Emploi") is the national employment office and the central organization of the public placement service. Established in 1967, it is a national public body with an independent legal status but under the authority of the employment minister. It is governed by a board headed by a Director-General, who is appointed by the minister of employment. In 1980 a tripartite board of management was introduced in which ANPE's users are represented. By law the board of management deliberates on ANPE's general strategies and development plans, cooperation agreements at the national level (in particular with UNIDEC), and its budget. Tripartite regional and departmental committees were introduced in 1986.⁽¹³⁾ The representatives of the employers and workers are appointed by the most representative employers' and workers' organizations.⁽¹⁴⁾

Despite its formally autonomous status, the ANPE and its governing board have basically very little independence vis-à-vis the state (Hamoniaux, 1995). Its principal officials (the president of the board of directors and the managing director) are appointed by the labour minister, and the decisions of its governing board are enforceable only if approved by the minister; and finally, its personnel is subject to civil service status. Its financial autonomy is even more limited: 70 per cent of his budget comes from a direct state grant and the rest from the Fonds National de l'Emploi.

The French unemployment insurance benefit carrier UNEDIC ("Union Nationale d'Emploi dans l'Industrie et le Commerce") is a non-profit association established in 1958 by interprofessional agreement, i.e. by the social partners. Because the unemployment insurance system originates from an agreement between the social partners, its decision-making bodies are bipartite structures. UNEDIC is governed by a bipartite council which every two years appoints a managing board from among its members. Its chairman is alternately a representative of the employers' associations and a union representative. The managing board has the task of managing the day-to-day operation of UNEDIC.⁽¹⁵⁾ From a formal point of view, UNEDIC corresponds exactly to the description of pure bipartism. Yet, the real influence of the social partners is more ambiguous since the government continuously intervenes in its activities.

Although primarily responsible for unemployment benefits, UNEDIC's role in active labour market policy has recently increased. In fact, since 1986 UNEDIC has been developing a programme of activating passive benefits.⁽¹⁶⁾ These measures mark the first step in the development of the social partners' own employment policy.

Although formally a bipartite organization, the state has frequently intervened directly in negotiations between the social partners. For example, in the tripartite agreement of 23rd July 1993, which aims at restoring the fiscal soundness of the system, the state committed itself to paying a subsidy, and the social partners committed themselves neither to lower the contribution rate nor to increase benefits. A tripartite supervisory council was also established, the "Conseil d'Orientation et de Surveillance" (COS), which is responsible for the auditing of UNEDIC's accounts as well as for co-ordination and control measures.

Our survey of the most important stages of UNEDIC's evolution (see French case study below) shows the ambiguity of the relationship between the social partners and the state: The latter seems to encourage and support the bipartite system, though it constantly intervenes. In crisis situations conflicts between the state and the social partners typically relate to their respective roles in financing the system.

The social partners in four employment service regimes

Table 2 (on page 14) presents a synoptic comparison of organizational features of the four tripartite employment service regimes surveyed. The Dutch Arbeidsvoorziening in the 1991 to 1996 period enjoyed the greatest independence in its policies and its budget decisions, although the government's original commitment to provide the labour market authority with a fixed four year budget allocation was in practice revoked by a series of budget cuts. The social partners had a majority in the central board, controlled the selection of top PES officials, and enjoyed a great deal of independence in policy making (table 2). Conflict with the government over financial resources, the autonomy of the institution, and its policy-orientation led, however, to a policy reversal and a clear subordination of the employment service to the government through changes that came into effect in 1997.

The German employment service, which is responsible not only for active measures but also for unemployment benefits, is the product of a long tradition of tripartism in labour market institutions and of social partnership in industrial relations. Its independence - within the broad constraints of the Labour Promotion Act - is underlined by the unique attribute of being autonomous in developing its own budget on the basis of financing through unemployment insurance contributions rather than annual appropriations (table 2). Chronic deficits in the unemployment insurance fund have, however, now rendered the BA dependent on the government for approval of its annual budget and led to repeated conflicts between the BA and the government. Recent statutory changes have clearly subordinated the BA's tripartite governing council to the government in both budgetary and policy questions. Nevertheless, the German employment service still influences policy and has significant autonomy at the implementation level, for example, the Arbeitsamt 2000 employment service reforms.

The independence of the British Manpower Services Commission and hence the influence of the social partners appears to have been quite limited. Its chairman was appointed by the government; it was subject to the government's annual budget process and to ministerial direction (table 2). Moreover, the autonomy of any tripartite institution depends not only on its own institutional position but also on the political context. By this test too the political position of the MSC in the policy process appears to have been weak: Governments are stronger in the United Kingdom, where single-party majority governments rather than coalitions are the rule, and the institutionalized political 'clout' of the social partners is weaker than, for example, in Germany or the Netherlands.

The impact of tripartite employment service institutions on policy appears to be weakest in France. Thus, in the case of ANPE, the most important of these institutions, its top officials are government appointees, its budget is controlled by the government, and it is subject to ministerial direction in policy matters (table 2). In short, the social partners have no role in the design but influence at most the implementation of active measures. Tripartite institutions appear to largely instrumentalize the participation of the social partners for policies made by the state. Most measures of active policy are decided by the French state without consultation with the social partners. Policy orientation depends on the color of the government and not on the opinions of the social partners. Other channels of influence of the social partners are clearly more important in France. The case of UNEDIC, which is a bipartite institution based on collective agreement rather than a tripartite institution based on law, is particularly interesting. UNEDIC is an autonomous institution of the social partners which, in comparison with the rather weak tripartite institutions in France, is highly independent. It selects its own officials, has its own autonomous budget and source of financing (contributions and a regular state subsidy), and stands in a bargaining relationship to government rather than one of hierarchical subordination (table 2 on page 14).⁽¹⁷⁾

2.4 Legitimation and lobbying function

Tripartism in PES institutions management might be expected to be associated with high and more stable levels of political support for active measures because it is indicative of the existence of a broad consensus between the social partners and represents a long-term and formalized commitment by major societal actors. This was, for example, an explicit consideration in the establishment of a tripartite labour market authority in the United Kingdom (MSC) ("lobbying function"; Reissert 1984) and is certainly a plausible effect of tripartism. Nevertheless, the determinants of political support for active measures are complex and a number of factors are likely to be important. For example, a corporatist-type consensus between the social partners and the state at a higher political level may be more important for public support for active measures than the direct involvement of representatives of the social partners in a tripartite labour market authority, which may in fact be a relatively subordinate implementation level in the policy chain.

In the OECD as a whole there is likewise only a loose relationship between these two modalities of influence of the social partners on active labour market policies (see table 3). Some countries with a strong corporatist tradition and a consensual style in policy formulation do not give the social partners a formal role in the tripartite administration of active labour market policies (Denmark, Finland, Norway), or have only recently experimented with this institutional form (Netherlands, Austria) while Sweden has recently abandoned tripartism. By contrast other countries with rather weak corporatist traditions have sometimes established tripartite labour administrations (Canada, France, Greece, Ireland, and - until 1990 - the United Kingdom).

Among the countries examined in our case studies, the strongest corporatist traditions are found in the Netherlands and Germany and the weakest in France and the United Kingdom. The system of industrial relations, especially the organization of the trade unions, is most fragmented and conflict-prone in the latter two countries. Nevertheless, all four countries have experimented with tripartite forms of participation of the social partners in labour administrations. Germany is a rare example of a country with a strong corporatist tradition in industrial relations that has had a tripartite administration since the legal establishment of a public employment service.⁽¹⁸⁾

In the case of the United Kingdom there was a clear relationship between the establishment of the tripartite MSC in the early 1970s and (unsuccessful) efforts to establish a corporatist pattern of policy-coordination between the government and the social partners. Noteworthy in the case of the United Kingdom is that the tripartite labour market authority actually survived for 10 years under Thatcher's neo-liberal policy regime - a fine illustration of the historical momentum of institutions.

Table 4 provides a simple test of the relative importance of tripartism and corporatism as influences on the level of active expenditure. It compares average active expenditure as a percentage of GDP in 1994 for the four categories of policy regimes reported in table 3 classified according to whether a country has tripartite employment service institutions and the strength of corporatism. The results show that while OECD countries that rank high on the corporatism indicator also have a markedly higher average level of expenditure for active measures (1.4 per cent to 0.69 per cent), countries with a tripartite PES self-administration actually have a lower average level of active expenditure on GDP in comparison with countries without tripartite employment services (0.91 per cent to 1.03 per cent). These simple bivariate findings suggest that a corporatist pattern of industrial relations is a stronger determinant of the level of active expenditure than tripartism. The impact of the social partners on labour market policy through corporatism is discussed below (3.), where the results of a quantitative analysis of the impact of corporatism on labour market policy expenditure are reported.

2.5 Multi-actor policy co-ordination

Tripartism in the public employment service, which integrates other policy actors in PES governance, is also advocated on the basis of a co-operative policy model. In all countries labour market policies typically involve organizational actors in different functional areas and levels of government (labour, education, social security institutions; provincial and municipal governments etc.) as well as employers' organizations, trade unions and other private sector actors. Thus tripartite institutions in the countries surveyed include not only the social partners but also other government agencies and levels of government.

In this view the efficiency and effectiveness of the PES (or the TECs in the United Kingdom) depend to a large extent on its capacity to interact with these multiple actors at the national, regional, and local levels. The inclusion of the social partners and other public sector organizations in the governance of tripartite labour market institutions can be interpreted as a strategy of policy co-ordination through co-optation. Inclusion of representatives of these organizations in PES governance is expected to facilitate necessary co-operation and induce them to coordinate their own activities better with PES policies.

In an older and relatively centralized corporatist tradition perhaps best represented by former Manpower Services Commission (MSC) in the United Kingdom, the primary concern was the integration of the national and sectoral organizations of the social partners in a new commitment to active labour market policy. This was still a principal goal of the introduction of the tripartite labour administration in the Netherlands in the early 1990s. Another related goal was the improved co-ordination of several government departments concerned with labour market policy, which are represented the PES's central governing body.

Table 2. Synopsis of employment service regimes and their impact on active policies

	France			Germany	The Netherlands	The United Kingdom
	ANPE	AFPA	UNEDIC	BA	Arbeidsvoorziening	MSC (1974-1988)
Role of tripartite body in decision making	Decision-making authority within legal framework	Decision-making authority within legal framework	Independent bipartite council	Decision-making authority within legal framework	Decision-making authority within legal framework	Decision-making authority within legal framework
Do social partners have majority?	Yes 2/3	Yes 2/3	Only SP	Yes 2/3	Yes 2/3 ⁽¹⁹⁾	Yes 2/3
Selection of top officials	By minister	By AFPA subject to ministerial approval	By UNEDIC	By BA Council ⁽²⁰⁾	By national board (CBA)	By government
Policies require govt. approval/ subject to ministerial direction?	Yes	Yes ⁽²¹⁾	No	Yes ⁽²²⁾	No ⁽²³⁾	Yes
Does PES organization have budget autonomy?	No Annual grants with line item budget	No Annual grants with line item budget	Yes Own budget financed through contributions to unemployment insurance and regular govt. subsidy	Yes Own budget financed through contributions to unemployment ins. Minister must approve.⁽²⁴⁾	Yes Own budget but subject to ministerial approval and annual budget authorization ⁽²⁵⁾	No Annual grants with line item budget
Perception of impact of social partners	Government dominant with little SP impact	Government dominant with moderate SP impact	Relatively autonomous SP organization; bargaining relationship to govt.	Govt. increasingly dominant but with significant administrative autonomy	Relatively autonomous labour market authority (until 1997)	Government dominant. SP influence on implementation ⁽²⁶⁾

Table 3: Corporatism and PES tripartism in OECD countries

	Corporatism
	High	Low	Total
PES tripartite self-administration	Austria (since 1994) Belgium Germany Luxembourg Netherlands (since 1991)	Canada France Greece Ireland Portugal	10
PES ministry or other	Denmark Finland Norway Sweden (since 1991)	Australia (since 1997) Italy Japan New Zealand Spain Switzerland UK (since 1990) USA	12
Total	9	13
Sources: For PES tripartism see table 1. Corporatism ranking based on degree of centralization in wage bargaining (union density and coverage) from Calmfors and Driffill 1988, High = 1 to 8 in ranking. Luxembourg and Greece interpolated based on OECD data on union density, coverage, and days lost to due to strikes. Dates in parentheses refer to introduction or abandonment of tripartism in PES institutions.

By contrast in a new co-operative policy model, which is perhaps most clearly articulated in the Dutch and British cases, the emphasis is now on decentralized and locally oriented implementation structures in which the role of the PES is not primarily the administration of national programmes but active networking of public and private actors at the regional and local level. In comparison to the traditional emphasis on the role of the social partners in tripartism, local policy networks and in particular local authorities are perceived as being increasingly important actors. This trend is due in particular to the shift in responsibility for income maintenance and active policies for the unemployed in many countries (e.g. the Netherlands, Germany, Sweden) toward the local authorities, who are typically responsible for social assistance for individuals who have exhausted their unemployment benefits.

One consequence of the new policy model is that it calls into question the traditional tripartite formula: Should the social partners always be equally represented? Should the social partners themselves have a majority? Should other societal groups be excluded? For example, in some innovative implementation regimes such as the Training and Enterprise Councils (TECs) in the United Kingdom and the JTPA system in the United States local employers have been given a dominant voice in decentral implementation of labour market policies, and even Sweden, a country like with strong corporatist traditions, now gives majority control in PES local boards to the municipalities in order to improve linkages to active measures at the municipal-level.⁽²⁷⁾

Table 4: Average expenditure for ALMP by PES tripartism and strength of corporatism, 22 OECD countries, 1994

	Corporatism				Total
	High		Low		Total
	ALMP%GDP	ALM%GDP per % unemployed	ALMP%GDP	ALMP%GDP per % unemployed	ALMP%GDP	ALMP%GD % unemployed
PES tripartite	0.93	0.13	0.90	0.08	0.91	0.10
PES ministry or other	2.00	0.20	0.55	0.06	1.03	11.00
	Total Corporatism High		Total Corporatism Low
	1.40	0.16	0.69	0.07
Source: OECD expenditure data and standardized unemployment rates (UR)

Good process evaluations of whether these goals of enhanced co-ordination are reached are rare, and we are largely dependent on circumstantial evidence. In countries in which the oganizations of the social partners are important and willing labour market policy actors, for example, because of linkages to collective bargaining, to social insurance carriers, or their role as programme sponsors, close co-ordination with them is both advisable and necessary. Participation by the social partners in national and local PES governing bodies is one way to pursue this goal, which has been institutionalized in many OECD countries. Such contacts provide the actors involved with information about PES policies and a network of interoganizational contacts that facilitates co-operation. However the same goal may also be achieved by participation in advisory bodies to the labour ministry or the PES, which exist in all countries without tripartite self-administrations. The quality of the contacts and communication is probably more important for co-ordination than the institutional form. On the other hand, where the social partners are weak and fragmented or do not play an important role in labour market policy participation through advisory bodies would appear to be more appropritate than direct involvement in tripartite institutions

Inclusion of other policy actors in PES governing bodies is of course only one possible organizational strategy to improve policy co-ordination. After the evaluation of tripartite reforms in the Netherlands it was concluded that co-operation between the PES and sectoral social insurance carriers and the municipalities was still unsatisfactory, the incentives for co-operation were changed by allocating part of the PES's funding to these organizations to use to purchase services from the PES for their clienteles (i.e. especially the long-term unemployed and social assistance recipients).

2.6 Internal conflict and deadlock

A possible negative effect of tripartism is disruption of organizational cohesion and efficiency and internal conflict that may result from the incorporation of the social partners (and other actors) in PES governance. The number and diversity of the actors represented may make decision-making more cumbersome, and in worst cases may result in politicization, which is the downside risk of the co-operation gain that tripartite forms aim to capture. This was a major criticism of the evaluation of the Dutch experiment with tripartism and is evident in the recent controversies in the German public employment service described above.

It is noteworthy that conflicts over policy are most often between the government and the social partners and not between the employer and employee groups within the tripartite bodies (see table 5). Typically conflicts between the social partners and the government are related to joint opposition to cuts in funding (Netherlands), or to the extent to which non-insurance related costs (e.g. special measures in East Germany) are to be financed through the unemployment insurance funds (in Germany and France).⁽²⁸⁾ Another common standpoint is against government interference in the autonomy of the PES organization (France, Germany, the Netherlands), or opposition to government initiatives to target services restrictively on problem groups in the Netherlands, or to shift the costs of early retirement or redundancies in adjustment situations back onto enterprises in Germany. By contrast major differences or clashes of interest between the social partners on active policies are less important than we had anticipated.

In the recent controversy over cutbacks in the German employment service employer representatives sided with the government not because of any principled opposition to active measures but because of overriding fiscal concerns about the government's deficit and opposition to financing the measures through increases in taxes or social security contributions. This is probably a typical policy difference between the social partners in tripartite labour market policy regimes in countries in which both social partners are committed in principle to active measures.

Differences between the social partners are more often in emphasis rather than about principle: Thus Lechner et al. (1993: 215f) report that employers' organizations in Austria give greater emphasis to the importance of enterprise-oriented programmes , whereas trade unions are more concerned about individual measures and programmes for problem groups. In France trade union representatives have also been critical of the extent to which active measures take the form of subsidies to firms without adequate controls for their labour market effects.

Decision-making rules are an important institutional design feature affecting the management of tripartite administrations: Whereas the tripartite regime in the Netherlands initially required unanimity (2/3 of any of the three 'blocks' could veto a decision), a simple majority suffices in the German employment service.⁽²⁹⁾ In both the Netherlands and Germany, conflicts between the government and the social partners in the employment service have led to changes designed to give the government clear authority to decide any serious controversy between it and the tripartite governing board of the employment service. The importance of such procedural rules should not, however, be exaggerated.

Evidence from experience with tripartite PES organizations suggests that internal conflicts are not an inherent weakness of these institutions. They are rather a reminder that a key precondition for the functioning of tripartism is a working policy consensus between employer, employee, and government representatives. Where this does not (or no longer) exists, tripartite institutions are inappropriate or at risk; the collapse of tripartism in the United Kingdom at the end of the 1980s and in Sweden after 1991 are two recent illustrations.

Given its strong tradition of social partnership, the Swedish case is especially interesting in this respect. The Swedish employers' association's (SAF) 1991 decision to withdraw its representatives from all the main tripartite organizations, including the national and regional labour market boards, apparently mainly reflected an ideological sea change in its definition of its role vis-à-vis government. It now rejected "corporatism," in which "interest organizations participate in government decision-making or perform government functions." SAF argued that corporatism weakens democracy and hinders the modernization of public authorities; in its view government should be responsible for policy and not interest groups, which should be free to represent their organization and the interests of their members. SAF endorsed tripartite advisory bodies as an alternative, in which representatives of interest organizations represent the views of their organizations without assuming responsibility for governmental policies (SAF 1992; Debois 1997). The Swedish employers' organization was also apparently frustrated by the fact that its representatives were usually outvoted by the trade union and government representatives; SAF no longer wished to share responsibility for decisions it could not prevent because of majority voting rules (Debois 1997; OECD 1996). After the withdrawal of the SAF representatives, the AMS board structure was reorganized in 1992-93 and now consists of six independent members and a director general appointed by the government for a fixed term. The social partners now participate in PES governance only as members of a 12-member bipartite AMS Advisory Council. in which employers' and workers' organizations are equally represented and the AMS director general acts as chairman (Debois 1997; 289). Recently, the government has restructured the regional labour market boards to give representatives of the municipalities a voting majority.

2.7 Insider policies

A classical problem of the devolution of responsibility for government functions to private actors is that recognized interest groups may not adequately reflect the public interest or even that of all their members. For example, employers' organization may not adequately represent the perspective of SMEs or trade unions may not adequately represent the interests of unorganized workers or of labour market problem groups. There are some indications of insider policies and interest conflicts along these line in the Netherlands, Germany and the United Kingdom. In all these countries a principal issue is the extent to which PES active measures should be targeted on the disadvantaged and problem groups.⁽³⁰⁾ In the Netherlands, where this issues has been most prominent, the social partners clearly favor a slip stream approach according to which the PES can best assist problem groups to find regular employment if the PES has a good reputation with employers and a high market share in placements. Adoption of this strategy means that the PES serves a broad segment of the labour market, including the social partners' own clienteles, whereas the government wishes to focus PES activities on labour market problem groups. The recent official evaluation of Dutch tripartite labour market authority actually accuses the representatives of employers and trade unions of acting "in the interest of their own members" rather than for the common good. A principal issue during the adoption of the new employment service law in 1995/96 was the target group orientation of the PES. Whereas the government (Ministry of Social Affairs) wanted it to focus on the hard-to-place, the social partners rejected this proposal, fearing that that PES offices would become a dumping ground for social problem groups, and even threatened to withdraw from the tripartite institutions if such a policy were adopted. The final compromise categorizes the unemployed according to the amount of training and work experience needed to place them, ranging from category one workers, who should be able to find a job on their own, to category four workers who have no chance of finding employment. The PES is to target its own resources on intermediate groups, i.e. neither the easy to place nor those who cannot be realistically placed but on those among the long-term unemployed, women, foreigners, and the partially disabled, for whom placement is possible in combination with active measures.

In Germany too targeting of measures has been a problem. The influence of the "insurance principle" in the tripartite Federal Employment Service, has meant that unemployment benefit recipients have in practice been given priority access to active measures (Schmid, Reisssert, Bruche 1994). Until 1994 a very high percentage of individuals in training programmes were previously employed and the probability of entering labour market training was lowest for the long-term unemployed. The recent initiative in Germany to target training on the unemployed came from the government.⁽³¹⁾

In the United Kingdom it was initially feared, for example, that devolution of responsibility for active measures to the employer-led TECs would entail a shift in public training away from the reintegration of problem groups toward serving the skill needs of the private business sector (Meager 1991). Although the TECs are - given the interests of their employer-led boards and their broad mandate - more inclined to invest additional resources in training for the employed, or for the readily employable, in order to to meet skill shortages rather than to provide training for problem groups, this has not taken place because relatively strict eligibility criteria for training programmes are defined by the ministry and not by the TECs (Mosley and Degen 1994). The extraordinary focus of labour market policy in the United Kingdom on problem groups, particularly youth and the long-term unemployed (>6 months), is of long standing and has been unaffected by the heightened influence of employers on the implementation of active measures.

Although a realistic analysis has to be cognizant of the fact that the social partners are interest organizations, albeit with very broad rather than narrow constituencies, experience with tripartite organizations reported in the case studies shows the importance in this respect of the mediating role of government as a representative of the public interest in the functioning of tripartite institutions. Moreover, the likelihood of insider policies is clearly related to the characteristics of the organizations of the social partners. Where employers' organizations and trade unions are broadly based and inclusive with a high level of coverage, the problem of insider policies is probably not very great. Where, on the other hand, the organizations of the social partners are weak and fragmented, the danger that they may pursue particularistic interests appears correspondingly greater.

3. Corporatism and active policies

Classical neo-corporatist forms of policy co-ordination in the 1960s and early 1970s focused on economic and incomes policies, but social and labour market policies also played an important if auxiliary role. For example, the Swedish original commitment to active labour market policies in the 1960s was an element of a broader consensus on economic and social policy (Rothstein 1996).

Table 5: Types of conflicts in employment service regimes: France, Germany, the Netherlands, the United Kingdom

	France			Germany	Netherlands	United Kingdom
	ANPE	AFPA	UNEDIC	BA	Arbeids- voorziening 1991-96	MSC 1974-1988
Examples of conflicts between social partners in tripartite/bipartite organization	Unions stress mission of serving unemployed and low-skilled & criticize employer and market orientation		1) Conflicts over presidency of organization 2) Over activating benefits: Employers favored activation whereas unions wanted only insurance benefit function	1) Conflicts over level of budget for active programmes - unions opposed cuts 2) Conflict over legalization of commercial placement services		1) Union opposition to 'workfare,' 2) Removal of employment service from tripartite MSC
Examples of conflicts between social partners in tripartite/bipartite organizations and government			1) Conflict over financing of non-insurance (solidarity) benefits; 2) Over state intervention in UNEDIC	1) Financing of non-insurance related expenditure (e.g. for Eastern Germany); 2) Severance payments offset unemployment benefit	1)Opposition to: a) government budget cuts; b) interference in operations of labour market authority; 2) Advocacy of "slip stream" strategy as opposed to problem-group orientation
Sources: See national case studies reported in Part II below

For a variety of reasons the era of corporatist attempts at co-ordination of economic policies at the macro-level has passed. A number of reasons can be cited for this turnabout: (1) National income policies negotiated between the social partners in neo-corporatist policy regimes arose in the context of tight labour markets in which the co-operation of the trade unions was needed in order to avoid inflationary disruption of macro-economic policies in economies at or near full-employment. Today the position of unions has been greatly weakened by structural changes toward a service economy and high levels of unemployment. The need for corporatist forms of co-operation with trade unions in order to enforce wage moderation is not as great as in the past, but there is now a greater need for co-operation in the process of structural adjustment. (2) Moreover, the internationalization of product markets and the increasing exposure of formerly protected sectors to competition (public sector, service sector) has reduced the policy room for maneuver for any type of centralized bargaining at the national level (Traxler 1993). (3) Finally, in an increasingly integrated European and world market, the room for maneuver for national economic policies appears to be more limited than in the past (Marks et al. 1997; Traxler 1993). There are, nevertheless, still marked differences across OECD countries in the organizational strength and political influence of the social partners and in the respective national styles of political co-ordination and collective bargaining (see tables 1-3 in the Appendix below). Moreover, new phenomenon such as the "social pacts," which have been a widespread response to the labour market crisis in Western countries, may be interpreted as being a softer, contemporary form of corporatist co-ordination (IRES 1994).

This section summarizes the main findings of an empirical analysis of the impact of corporatism on labour market policy expenditure in OECD countries, "Corporatism and Active Labour Market Policy: Empirical Evidence from OECD Data," which is reported in detail in the statistical appendix below. In most industrialized countries, the system of industrial relations plays an important role for economic and labour market performance (cf. Janoski 1997). The actors in industrial relations, "the social partners", constitute a "web of rules" (OECD 1994: 167), providing procedures for conflict management. We hypothesize that the characteristics of the industrial relations system and the integration of social partners in the policy process have an impact on the level and composition of active measures. The influence of the social partners on level and design of labour market policy expenditure is examined in different multiple linear regression models (see table 1-1 in statistical appendix below). Our models test the influence of social partners within an institutional model that also takes into account the level of unemployment and party constellations in the political system. Two different indicators for the role of the social partners are used: union density and consensus orientation.

The dependent variables in our models are expenditure rates for passive and active labour market policy as a percentage of GDP (with the subgroups training and subsidised employment for active policies) as well as the overall "activity rate" of labour market policy, i.e. the share of active measures on all labour market policy expenditure.

The models are tested for two periods: 1985 to 1990 and 1991 to 1994. Cyclical and extraordinary peaks in the data set are smoothed by taking an average of the unionization and conflict indicators for the last five years. The analysis is based on the data collected by the OECD, enabling on the one hand a cross-national comparison between different national institutional regimes, and, on the other hand, a sample that is large enough for statistical analysis. The OECD data refer to national data sources, that are adjusted according to international standards as far as it is possible.

The results of our analysis, which are reported in detail in the statistical appendix below, can be interpreted as providing robust evidence for a positive relationship between corporatism as measured by union density and low strike rates on both total and passive expenditure for labour market policy as a percentage of GDP. If we interpret corporatism in this sense as a proxy for social partnership, we can conclude that labour market policy expenditure is significantly higher in countries in which social partnership is stronger. On the other hand, the evidence for an impact of social partnership on levels of active expenditure (here training and subsidized employment) is weaker and inconsistent. Finally, as expected, the unemployment rate is strongly and significantly positively related to both active and passive labour market expenditure. Neither social partnership nor any of the other variables included in the model are statistically significant when regressed on activity rates, i.e. the ratio of active to passive measures in labour market policy expenditure.

4. Conclusion

There are a variety of different roles open to the social partners in the design and implementation of active labour market policies. In this report, we have identified and examined four principal channels of influence: (1) political influence on government policy, especially in corporatist policy regimes; 2) tripartism in employment services, 3) collective bargaining; 4) programme participation. We have focused in particular on the first two, which represent forms of direct involvement of the social partners in policy making. Although both of these channels of influence are still important in a great many OECD countries, both appear for a variety of reasons to be less important than in the past. Corporatist forms of policy co-ordination, in which the social partners have historically played a central role, have been weakened in particular by globalization of economic relations, which has clearly reduced the room for maneuver for national policy, and by a secular decline in trade union power. The independence of tripartite employment service institutions, and hence the influence of the social partners within them, has also been curtailed by increased government intervention due in particular to growing fiscal constraints.

Direct involvement of the social partners in the governance of independent tripartite labour market authorities like that found in all four of the case study countries (France, Germany, the Netherlands, and until 1988 in the United Kingdom) appears at first sight to promise the greatest influence on active policies. Our case studies show, however, that such formal responsibility does not necessarily mean real influence. Tripartite employment service institutions are more concerned with the implementation of policies, whose broad parameters are clearly set by government, although there are large differences across countries in the degree of autonomy actually exercised by tripartite institutions. This finding suggests that the distinction between tripartite PES governance and PES advisory bodies, in which the social partners merely play a consultative role, may not be very great in practice. In general it appears that the form of participation is less important than the existence of a culture of social dialogue in the political system and in industrial relations. It is thus not surprising that a simple comparison of expenditure levels in different types of employment service regimes shows no evidence for higher levels of expenditure for active measures in OECD countries with tripartite governance structures in comparison with those in which the social partners have merely an advisory function but strong evidence for higher expenditure levels in countries with strong corporatist traditions in their industrial relations systems. However, a multivariate regression analysis of the impact of social partnership as measured by union density and low strike rates on labour market policy found a positive impact on total and on passive expenditure but only weaker evidence for a positive impact on expenditure for active measures.

While involvement of the social partners in policy making and implementation is clearly desirable, it is difficult to draw general policy conclusions for the institutional design of employment service institutions based on our limited study of the experience of four western European states. As noted above, a culture of social partnership in labour market policy appears to be more important than the particular institutional form. Such a policy culture of social partnership is not, however, a matter of simple choice but deeply rooted in a national culture. Moreover, social partnership has certain prerequisites the most important of which are that trade unions and employers' organizations be broadly based and representative and that they share a basic policy consensus with government on active measures and on the appropriate role of the social partners in policy-making. These are important conditions for tripartite employment service institutions if they are to function effectively (legitimation, multi-actor policy coordination) and to avoid a number of possible negative effects (internal conflict, insider policies). The evidence from our case studies clearly indicates that, if these conditions are fulfilled, tripartite participation of the social partners in the governance of the employment service is more likely to succeed and that under other circumstances participation through consultative bodies (i.e. without direct responsibility for PES management) may be more appropriate.

II. Case studies: The role of the social partners in France, Germany, the Netherlands, and the United Kingdom

1. France

1.1 Introduction

The most important features of the French industrial relations system are the weakness and pluralism of trade unions, the fragmentation of collective bargaining, the plurality of negotiating levels, and the importance of the state in conflict arbitration. France has a long tradition of state intervention and the social partners have not been able to develop their own autonomous sphere of collective regulation.

The political and ideological fragmentation of the system of industrial relations, especially on the trade union side, has not been offset in France by the development of corporatist forms of co-ordination as was the case, for example, in the Netherlands. Rather industrial relations in France are characterized by a high degree of conflict and the lack of a consensual approach, which is manifest inter alia in high strike rates. The relative strength of the Communist left in the trade union movement and politics is undoubtedly an important reason for this conflictual style.

The principal trade union confederations are CFDT (Confédération française et démocratique du travail), CGT (Confédération générale du travail), CGT-FO (Confédération générale du travail - Force ouvrière), often abbreviated FO, CFTC (Confédération française des travailleurs chrétiens) and CGC (Confédération générale des cadres), the latter being the French managerial staff union. In contrast to the variety of trade union organizations, which are fragmented into rival religious and ideological confederations, there is only one significant employers' association at the national level: the CNPF (Conseil national du patronat français). It negotiates on major issues related to working conditions, but is not involved in wage bargaining, which is the concern of the sectoral level confederations. There is also an association which represents small and medium-sized companies, the CGPME Confédération générale des petites et moyennes entreprises). Approximately 90% of French companies are affiliated with the CNPF and its sectoral organizations. The CNPF addresses general social and economic issues relevant to business on the national level as well as employment-related issues. The CNPF comprises 83 sectoral employers' associations of various types in manufacturing, commerce and services, as well as 163 regional associations at the departmental or local level.

Although corporatist institutions for policy co-ordination have never developed in France to the same extent as, for example, in Austria, Sweden, or the Netherlands, two high-level institutions in the industrial relations system should be mentioned before discussing institutional channels more directly related to active policies: the "Conseil économique et social" (CES) and the "Commisariat Général au Plan" (CGP). The CES, that is the Economic and Social Council, was established in 1958 (Constitution of the 4th October 1958; decree of the 29th December 1958).⁽³²⁾ The CES was established to serve three purposes: to be a consultative body to government, providing it with independent advice on a variety of issues; to give interest groups the opportunity to participate in a public policy forum and to express their opinions to the government; and to provide a forum for the development of a consensus on important national issues. The CES includes 231 members divided up into 18 groups and serving for five years. The appointment procedures of these advisers differs: 163 among them are appointed by socio-professional groups, and 68 others are appointed by the government.⁽³³⁾ According to the officials interviewed, the CES concerns itself with so many aspects of social and economic life, that it cannot be regarded as a consultative body to the government on active labour market policy. However the government may ask the CES to give its opinion on a specific subject when preparing a law, and the CES sometimes offers its advice.

Employers' Associations

CNPF Conseil national du patronat français (National Council of French Employers). Ca. 90 per cent of French companies are affiliated with the CNPF.
CGPME Confédération générale des petites et moyennes entreprises (General Confederation of Small and Medium-sized Companies).

Trade Union Confederations

CFDT Confédération française démocratique du travail (French Democratic Confederation of Labour). Socialist orientation with ca 500,000 members, it receives about 20 per cent to 25 per cent of votes in works council elections.⁽³⁴⁾ Participates in all national negotiations and is represented in all important consultative bodies.
CGT Confédération générale du travail (General Confederation of Labour). Communist orientation with ca. 1 million members, it receives 25 per cent to 30 per cent of votes in works council elections.
CGT-FO Confédération générale du travail - Force ouvrière (Workers' Force). Reformist-socialist orientation with ca. 1 million members it receives 10 per cent to 15 per cent of votes in works council elections.
CFTC Confédération française des travailleurs chrétiens (French Confederation of Christian Workers). Ca. 250.000 members, this Christian-reformist union receives about 3 per cent to 5 per cent of votes in works council elections.
CGC Confédération générale des cadres (General Confederation of Executive Staffs). Circa 180,000 managerial personnel. Participates in national negotiations and negotiations at firm level. Represented in various consultative organizations

The CGP, the General Planning Commission, was established in 1946 by a government seeking to bridge divided interests for the task of post-war reconstruction. It was conceived as a way of providing permanent and systematic reflection on the problems and prospects of the economy with a view to action; its role was to advise the government in the drawing up of plans (long-term policy presentations). Indeed, several Plans have been set up with the participation of CGP (and its commissions). Today, CGP no longer has this role; it is still a forum for discussion but no longer directly linked to policy.⁽³⁵⁾

In general the social partners have three institutional channels for influencing the design and implementation of active labour market policy measures (apart from their participation in the general political process). The first way is so-called "tripartism", by which is meant institutions involving both the state and social partners, especially the public employment service and related institutions. The second way, "bipartism," is quite similar to "tripartism" with the only difference being that only representatives of labour and management are involved in the institutions. Collective agreements, the third way, represent the traditional sphere of labour regulation carried out by the social partners. Of these different channels, bipartism is the most distinctive French pattern and usually interpreted in relation to "neo- corporatism."⁽³⁶⁾

Several forms of bipartism exist. According to Ires (1996) there are two types of bipartism: First, a "pure" bipartism based on collective agreements. The institutions of pure bipartism are characterized by decision-making by labour and management with only a subsidiary role for the state. The second form of bipartism corresponds roughly to the participation of social partners in state management; in other words, it is constituted by institutions established by law in which all important decisions are made by the state (government, administration and recently parliament).

1.2 Tripartism in the public employment service

The main institutions of the public employment service were established in the period between the end of World War II and the early 1970s. The institutions in question are ANPE (French National Employment Office), AFPA (Adult Professional Education Association), UNEDIC (National Union for Industrial and Commercial Employment), FNE (French National Employment Fund)⁽³⁷⁾ and the labour ministry (organized at different levels) and the interdepartmental structures. The most important tripartite institutions related to active labour market policy are discussed in this section: ANPE, the national placement office, AFPA, the national vocational training association, various committees involved in employment policy and vocational training. UNEDIC, the bipartite self-administration of the French unemployment insurance system, is discussed in the following section. In addition to the tripartite or bipartite organizations described here, the labour ministry is also a major actor in the delivery of active measures.

"Agence Nationale Pour l'Emploi" (ANPE)

ANPE is the national employment office and the central organization of the public placement service. Established in 1967, it is a national public body with an independent legal status but under the authority of the labour minister. The ANPE has two principal missions. First, it has to assist people seeking employment, training or professional counseling. At the same time, it has to assist employers in recruiting personnel.

The ANPE is governed by a board headed by a Director-General, who is appointed by the minister of labour. In 1980 a tripartite board of management was introduced in which ANPE's users are represented. By law the board of management deliberates on ANPE's general strategies and development plans, cooperation agreements at the national level, in particular with UNIDEC, the bipartite organization that administers the unemployment benefit system (see below), and its budget. Tripartite regional and departmental committees were introduced in 1986.⁽³⁸⁾ The representatives of the employers and workers are appointed by the most representative employers' and workers' organizations.⁽³⁹⁾

Despite its formally autonomous status, the ANPE and its governing board have basically very little independence vis-à-vis the state (Hamoniaux, 1995). Its principal officials (the president of the board of directors and the managing director) are appointed by the labour minister, and the decisions of its governing board are enforceable only if approved by the minister; and finally, its personnel is subject to civil service status. Its financial autonomy is even more limited: 70 per cent of his budget comes from a direct state grant and the rest from the Fonds National de l'Emploi.

Recently, the state has started a devolution (déconcentation) process in the placement service ⁽⁴⁰⁾ : the government decree of the 20th December 1986 widens the number of organizations with which it co-operates but ANPE maintains management and control. The idea of partnership has been further developed in two multi-year operating agreements signed in 1990 and 1994 between ANPE and the state called "progress contracts" (contrats de progrès), which establish a link between state provision of financial resources and ANPE results.

The representatives of the social partners interviewed (members of the board of directors) were skeptical about their impact on active labour market policy through their participation in ANPE because of their limited influence within the organization and because the organization itself is largely subordinate to the state. Employers' representatives regard the acceptance by ANPE of the idea that enterprises as well as the unemployed are its clients as their most important success, while most union representatives regard their participation within ANPE as having little real impact.

"Association Nationale pour la Formation Professionnelle des Adultes" (AFPA)

AFPA, the National Association for Adult Vocational Training, which was established in 1966, is one of the key components of the public employment service. AFPA is principally a training center. About 40 per cent of training for the unemployed is carried out in its centers. It is an association under control (sous tutelle) of the state, which means that its policies are fixed by the labour minister, and nearly 70 per cent of its resources comes from public sources

The AFPA has a tripartite governance structure. Its General Assembly, in which the ministries concerned, the employers' associations and the most representative trade union organizations are represented, is in principal responsible for all issues relating to the administration and functioning of the AFPA. The Assembly elects from its members a tripartite managing committee, and it also appoints the president, who is responsible for implementing the committee's decisions and for the conduct of day-to-day business, and a director, whose appointment is subject to the approval of the Minister of Labour.⁽⁴¹⁾

A reform of AFPA that began in the early 1990s rests essentially on two contracts: the "objectives contract" (contrats d'objectifs) and the "progress contract" (contrat de progrès). The objectives contract signed in March 1991 fixed the plans of AFPA for 1991, 1992, 1993. The basic idea of this contract was to improve the management, to reinforce the autonomy of the organization, and to pursue the devolution (deconcentration) of the association. In contrast to the general principles affirmed in the "objectives" contract, the progress contract gives a precise answer concerning the mission and the organization of AFPA.⁽⁴²⁾

The social partners seem to have more influence in AFPA than in ANPE. This is probably due to their generally greater influence in the domain of vocational training. However, AFPA remains an instrument of the government: It has a public service mission and has to follow public employment policies.

Committees for employment and vocational training: CSE, COREF and CODEF, "Comités (locaux) de bassin de l'emploi" (CBE)

The "Comité Supérieur de l'Emploi (CSE), the "Comité Régional de la Formation Professionnelle, de la Promotion Sociale et de l'Emploi (COREF)" and the "Comité Départemental de la Formation Professionnelle, de la Promotion sociale et de l'emploi (CODEF) have similar roles, which they exercise respectively at the national, regional and departmental levels. Their composition is tripartite with a more or less equal number of labour, management and state representatives. Their original mission was to consult on local implementation of employment and vocational training policies. According to experts interviewed, their effective role is quite limited: They mostly deal with the examination of adjustment-related subsidies to firms financed by the FNE, usually when enterprises face mass dismissals. Conflicts arise in the meetings as a rule when unions do not agree with the necessity of dismissals and disapprove the financial support of the state, which they regard as encouraging lay-offs.

The "comités locaux de l'emploi" (CBE, local employment committees) were established by law in 1982 and reformed in 1993.⁽⁴³⁾ At this occasion their name was changed; now, they are called "comités de bassin de l'emploi" (labour pool committees). These committees are composed of local councilors, company managers and workers' representatives. Their primary functions is to serve as an advisory body for the prefect and to act as an intermediary for governmental employment and training measures and to promote local employment policies The coordination of the activities of the different CBE is ensured by a national "comité de liaison des comités de bassi d'emploi" (CLCBE; liason committee). According to experts interviewed, CBE essentially helps local associations and employers by giving information and forming working groups. It is an arena of communication and discussion but not of policy-making.

In most cases, the tripartite institutions discussed above are not involved in general policy orientation, but rather in the implementation of established measures. In short, the social partners don't have any role in the design but at the very most some influence on the implementation of active measures. With regard to the degree of influence it should be stressed that social partners only have a consultative role, and never decision-making power. The social partners themselves, at least those interviewed, seem to give little importance to these institutions. In their opinion, this channel provides them with very little influence. In their view the institutions of tripartism largely instrumentalize the participation of the social partners for policies made by state authorities (governments).

1.3 Bipartism in the unemployment benefit system

This section reviews the most important bipartite institution with an influence on active labour market policy: the unemployment benefit system (UNEDIC), which has recently developed a programme of activating passive expenditure. The role of the social partners in the vocational training system, which is an important area of activity in France as well as in most other countries, has been analyzed elsewhere in detail (Streeck et al. 1990) and is not discussed here.

The "Union Nationale d'Emploi dans l'Industrie et le Commerce" (UNEDIC) is a non-profit association established in 1958 by interprofessional agreement, i.e. by the social partners. Because the unemployment insurance system originates from an agreement between the social partners, its decision-making bodies are bipartite structures. UNEDIC is governed by a bipartite council which every two years appoints a managing board from among its members. Its chairman is alternately a representative of the employers' associations and a union representative. The managing board has the task of managing the day-to-day operation of UNEDIC.⁽⁴⁴⁾ From a formal point of view, UNEDIC corresponds exactly to the description of pure bipartism. Yet, the real role of social partners in the unemployment system functioning is more ambiguous, as the state continuously intervenes in its activities.

Before analyzing the real role of social partners in the system, it should be noted that UNEDIC's role in active labour market policy has recently increased. In fact, since 1986 UNEDIC has been developing a programme of activating passive benefits. In particular, four schemes were introduced to promote employment: the "Convention de conversion" (retraining contract), initiated by the inter-professional agreement of the 20th October 1989, the "Allocation Formation-Reclassement" - AFR (training/career change benefit), introduced by the inter-professional agreement of the 6th July 1988, the "Convention de coopération" (cooperation contract), initiated by the inter-professional agreement of the 8th June 1994 and the "Allocation de Remplacement pour l'Emploi" - ARPE (job replacement benefit), introduced by the inter-professional agreement of the 6th September 1995. The latter agreement also provided for creation of a Bipartite Fund to Promote Employment, the "Fond Paritaire d'intervention en faveur de l'Emploi" (FPE).

The first two schemes fall into the category of retraining and have been implemented with a strong state participation. The retraining contract scheme was made compulsory by the law the 2nd August 1989 (companies must offer all employees affected by a redundancy programme the possibility of signing a retraining contract) and is co-financed by the state.⁽⁴⁵⁾ The AFR was set up with the direct intervention of the state, which is, moreover, the principal sponsor. On the other hand, the last two schemes mark the determination of the social partners to strengthen their own action to promote employment. ARPE competes with two other early retirement programmes financed by the FNE.⁽⁴⁶⁾

These measures are really important, as they mark the first step in the development of the social partners' own employment policy. In particular ARPE is considered as resulting from an "historic" agreement. All experts interviewed agreed that ARPE is the most important measure in years with respect to the influence of social partners on active labour market policy. The employers' association CNPF even makes a (partially prospective) comparison between UNEDIC and ANPE: they are the respective employment policy instruments of the social partners and the state.⁽⁴⁷⁾

Relations between the state and the social partners in UNEDIC

The relationship between the social partners and the state (with regard to UNEDIC) can be outlined in four stages (Ires, 1996, p. 97-101). Since 1958, the unemployment benefit system had consisted of two pillars: public assistance and the contractual bipartite insurance system (UNEDIC). Faced with increasing unemployment, conflicts emerged at the end of the 1970's. On one hand, the state criticized UNEDIC's benefit structure for giving unequal benefits to different categories of the unemployed and for being too complicated. On the other hand, the social partners blamed the state for the financial problems of the system (cutbacks in the state subsidy and in some case overly generous benefits). As a result, the system was reformed in 1979.⁽⁴⁸⁾ At the beginning of the 1980's a new conflict arose over financial problems due to the rise in unemployment, the expansion of early retirement measures, high benefit levels, and the failure of the state to adhere to the 1979 greement. The social partners opened negotiations in June 1982 but broke them off in October because of a disagreement about the necessary savings. Unlike the unions, the employers' associations (CNPF and CGPME) opposed an increase in benefits and proposed major savings. In November 1982 CNPF canceled the contract of 1979 and proposed setting up a new unemployment benefit system. The government intervened to regulate "exceptionally and provisionally the functioning of the system" (decree of 24th November 1982). This decree altered neither the nature of the system nor the functioning of the bipartite institutions, but reformed the benefits (reducing their length) and the early retirement measures (restricting access). Following this crisis, negotiations started again. The CNPF proposed separating unemployment insurance, managed only by the social partners and financed by contributions, and the solidarity (new term for assistance), which was to become a state responsibility financed by taxes. But CFDT and CGT refused to sign the written agreement. The state entered directly into negotiations, and an agreement signed by all employers and employees federations was reached. It established the principle of the separation between insurance and solidarity. The state was now made completely responsible for some types of benefits: early retirement, training stipends (vocational training) and aid for enterprise creation by the unemployed. The period between 1984 and 1991 is characterized by a relative stabilization of the system, even though successive negotiations changed both the conditions of benefits and the system financing. Despite the new division of responsibility in the system, the state continued to intervene. For example, it directly participated in the setting up of the training/career change benefits (Allocation de Fromation Reclassement) and financed these measures for the most part.

Because UNEDIC has continued to experience financial problems since 1992, several modifications have been decided. Two agreements are particularly important: the agreement of the 18th July 1992, which tightens benefit conditions, and the tripartite agreement of 23rd July 1993, which aims at restoring the fiscal soundness of the system. In the latter agreement, the state committed itself to paying a subsidy, and the social partners committed themselves neither to lower the contribution rate nor to increase benefits. A tripartite supervisory council was also established, the "Conseil d'Orientation et de Surveillance" (COS), which is responsible for the auditing of UNEDIC's accounts as well as for co-ordination and control measures.

This review of the most important stages of UNEDIC's evolution shows the ambiguity of the relationship between the social partners and the state: The latter seems to encourage and support the bipartite system, though it constantly intervenes. In crisis situations conflicts between the state and the social partners typically relate to their respective roles in financing the system. By contrast other conflicts are mainly linked to state interventions in UNEDIC policies related to employment policies. Conflicts among social partners exist, too. For example, there is a traditional conflict over the mission of UNIDEC: Should it provide a pure insurance scheme or also engage in employment policies? Power conflicts between unions for the presidency are also common (usually between FO and CFDT).

It should be stressed that UNEDIC is at the heart of active labour market policy because public employment policy and unemployment benefits have been traditionally closely linked. Furthermore, and it might be the most important point, UNEDIC has recently developed an employment promotion policy through the activation of passive benefits. Yet, UNIDEC's real influence must be relativized. UNEDIC's sphere of bipartism (toward the state) has been constantly re-defined. The recent events go both in the direction of more autonomy (activating benefits programmes ) and less autonomy (institution of a tripartite council in 1993), but history seems to give more evidence in favor of state intervention, so that one could speak of "bipartism under control" (Ires 1996: 21).

1.4 Collective agreements and active policies

As a rule the social partners can make collective agreements at three levels: the national inter-professional, the industry, and the enterprise (plant) levels.⁽⁴⁹⁾ Since 1980 the state has been encouraging collective agreements. In particular, the Auroux laws have stimulated collective agreements (the number of collective agreements has been constantly rising since then) by introducing several negotiation obligations: at the industry level, an annual negotiation over minimum wages and periodic (every 5 years) negotiations over wage structures and training; at the plant level, an annual obligation to negotiate over wages and working-time. In this section we do not discuss agreements at national and industrial level, since the most important ones (with respect to public employment policy) have been integrated in the discussion of UNEDIC.⁽⁵⁰⁾ We will however discuss the plant level and working time reductions.

The number of local agreements on employment has been constantly increasing since the beginning of the 1990s (2.6 per cent of all plant agreement in 1990 and 9.6 per cent in 1996. Wages and working time are the two most negotiated subjects, with the latter recently increasing in importance. In 1990 57.9 per cent of the agreements were on wages and 38.2 per cent on working time, whereas the respective proportion were 41.8 per cent and 43.1 per cent in 1996).⁽⁵¹⁾ Since 1982 the state has been stimulating collective agreements on working-time (reduction and organization) especially at the enterprise level. The most important working-time measures were the introduction of 39-hour work week (decree of the 16th January 1982), the establishment of an annual obligation of negotiating working time at enterprise level (Aroux law of the 13th November 1982) as well as the establishment of several possibilities not to comply with the labour laws (or with norms fixed by collective agreements at a superior level), a mechanism which is called in French "dérogation". In particular the possibility of varying weekly working-time over the year was encouraged by different laws (law of the 28th February 1986; law of the 22 June 1987; Five-Year Law of 1993). The special characteristic of these "dérogations" is that they must be decided through collective agreement (in most cases an enterprise agreement is sufficient). In June 1996 a working-time reduction law was passed (called "loi Robien") which is particularly interesting because it makes an employment policy subsidy to an enterprise subject to the conclusion of a prior collective agreement. In short, each enterprise reducing working-time and hiring people at the same time (or avoiding dismissals) is partially exempted from social security contributions (different modalities are allowed). The enterprise has to conclude an agreement with unions, in order to sign the contact with the state. All these legal measures can be regarded as having two aims: first encouraging collective agreements in order to delegate some labour regulation and second, having an impact on employment both through work sharing and through better adaptation of labour use to the market situation (working-time flexibility). Although the impact of these working-time measures on employment is controversial, they have increasingly been the subject of regulation through collective agreements.

By way of conclusion, we will present some general remarks on collective agreements. First of all, the interplay between laws and inter-professional agreements works in the two ways: Sometimes, the social partners conclude an agreement that inspires subsequent legislation, while at other times legislation imposes a rule which is then adapted to concrete situations by the social partners through collective agreement (this is mostly the case when social partners cannot manage to find an agreement). Nevertheless, even though the state formally encourages collective agreements, i.e. joint decisions by the social partners, historical experience suggests that as a rule it regards employer as the only legitimate partner for employment decisions; most employment subsidies result from a contract between the state administration and the employer and seldom require a plant agreement, i.e. approval by trade unions. Finally, two phenomena should be stressed, with regard to the specific role of social partners in employment policy: on one hand, active labour market policy measures are mostly decided by the state and only in a second stage applied in the firm (with different degrees of involvement of the social partners); on the other hand, even if the social partners have recently shown a willingness to strengthen their own actions to promote employment (and hence to take a partial responsibility for the employment situation), structural and cultural problems still hamper the collective bargaining process.

2. Germany

2.1 Introduction

The German social partners are highly organized and relatively centralized pillars of the industrial relations system with a recognized and firmly established role in other social and political institutions. German industrial relations have a strong tradition of autonomous collective bargaining and successful co-operation at the national, industry and plant level, with a corresponding relatively low level of industrial conflict. Although Germany has never developed the type of centralized corporatist forms of co-ordination found, at least in the past, in the Netherlands and Austria, the social partners are highly integrated in the social and political decision-making process through consultative procedures and direct participation in the management of numerous institutions (e.g. the public employment service, social insurance carriers, vocational training, universities etc.).

The national trade union confederation, the DGB (Deutscher Gewerkschaftsbund) comprises ca. 11 million members in public and private sectors in its affiliated sectoral unions. It has only indirect influence on collective bargaining at sectoral and regional levels but is the principal representative of the German trade union movement at the national level and in consultative bodies. Unlike its counterparts in France and the Netherlands the German union movement is not fragmented along ideological and confessional lines in rival confederations. The largest member unions, e.g. Metal Workers (IGMetall) and the union of public employees (ÖTV), frequently play an independent political role.

The BDA national organization of German employers' associations (Bundesvereinigung der Deutschen Arbeitgeberverbände) represents employers with about 80 per cent of private sector employment and 80 per cent to 90 per cent of employers are affiliated. It plays a leading role in consultations between employers and the state and is presented in all important consultative bodies. In contrast to the trade unions, employers' interest outside industrial relations are represented by multiple organizations, of which the Industry Associations and Chambers of Commerce are the most important.

2.2 Tripartism in the public employment service

The German Employment Service (Bundesanstalt für Arbeit; BA) is a self-governing body incorporated under public law. It is responsible for both active policies (placement, vocational counseling, labour market training and other active programmes ) as well as for the administration of unemployment benefits. Its self-governing organs have a tripartite structure with equal representation of employees, employers and public bodies (Federal and Land Governments, and local governments). This principle is applied both at the national level of its Governing Council (Verwaltungsrat) and Executive Board (Vorstand) as well as at the level of the regional and the local employment offices with their tripartite administrative committees (Verwaltungsausschüsse). Representatives of the social partners are appointed on the basis of nominations from employers' and trade union organizations at the respective levels (§195 AFG).⁽⁵²⁾

The BA's tripartite Council and Executive Board play an important role in the selection of principal BA officers. The presidents and vice-presidents of the BA and of the Land regional labour offices are nominated by the Federal government and appointed by the Federal President. However, the Federal government is required to consult with the BA's tripartite governing Council before making nominations and may deviate from its advice only for "serious reasons." Other high officials of the BA are nominated by the BA's executive board. (§211 AG).

The Council enacts the statutes of the BA and issues decrees and regulations within the scope of its autonomy. It must ratify the budget proposed by the Executive Board, which must subsequently be approved by the Federal Government. The BA is financed through unemployment insurance contributions by employers and employees, the contribution rate is, however, determined by statute and not by the BA itself.

The tripartite administrative committees of the Regional and Local Employment Offices assume the tasks of self-government for their respective districts, including submission of proposals for the central budget and consultation by the nomination of the President and Vice-President of the regional PES offices or the director of the local PES. The administrative committees oversee PES operations principally through specialized committees, e.g. the Job Creation Programme Committee. Members of the administrative committees are recruited from the regional offices of the trade unions or employers' association and from Land level of public authorities. In the case of the local PES committees, recruitment is from local union and employers' association officials and from the municipalities and their associations (Linke 1994).

National level

Despite its status as a self-governing institution, the BA's independence is in practice limited. Both administrative regulations (Anordnungen) and the budget approved by its Council require the approval of the Federal Minister for Labour and Social Affairs (and in some cases the Minister of Finance). Moreover, regulations and, if the BA's budget is in deficit, budgetary stipulations can be directly imposed by the Minister if the BA's own administration fails to comply with his instructions (§191, §216 AFG).

The limited autonomy of the BA vis-à-vis the government is best illustrated by the budget process since the fact that the BA has its own budget and funding through contributions is its greatest mark of independence in comparison with other tripartite labour administrations (Linke 1994; Bruche and Reissert 1984).⁽⁵³⁾ Although the BA formulates its own budget, it has no control over the contribution rate on the revenue side nor, for example, over benefit levels or training stipends, which are fixed by statute. Moreover, its budget it has to be approved by the Federal Government (the Minister for Labour and Social Affairs). Since 1993 the Minister can implement the budget on his own authority if the Council does not accept the budgetary stipulations imposed by the Minister. This situation can arise, only if the BA's budget is in deficit (§216 AFG), i.e. it is unable to finance proposed expenditures through its own

EMPLOYMENT AND TRAINING PAPERS27 The role of the social partners in the design and implementation of active measures

Hugh MosleyTiziana KellerStefan Speckesser