ABSTRACT
Governments may be motivated to resort to social pacts in response to economic problems. However, as the previous chapter illustrates, economic problems by themselves hold little explanatory power for the occurrence of social pacts. Consequently, our analysis focuses on governments and political parties and their role in initiating or facilitating social pacts on wage, welfare, and labor market reforms in response to electoral pressures. Governments can, and frequently do, choose an alternative path to adjustment by using legislative procedure that excludes unions and employers. Why, then, do governments sometimes prefer negotiations with unions and employers to parliamentary procedure? This question is particularly interesting as pacts are not necessarily without cost for governments. Negotiations imply some compromising on the part of the government, mean ing governments move away from their ideal policy position. They can also be lengthy, and failed negotiations can cast a negative light on all actors involved – including the governing party or parties. Negotiations with non-parliamentary actors can raise questions of democratic legitimacy and the democratic process in the minds of the voters. Yet, governments across Western Europe have regularly initiated social pacts since the 1980s.
