chapter  Chapter 7
The coordination paradox
A comparative political economy perspective on transnational wage coordination
WithMartin Höpner
Pages 6

This chapter argues that European wage policy faces a coordination paradox: while in structural terms, internal coordination is the precondition for external coordination, in functional terms, countries with coordinated wage regimes are precisely those that “beggar their neighbours.” “A field of transnational wage policy coordination based on voluntary negotiations between business and labour,” Susanne Pernicka and Vera Glassner say, “has never emerged.” A large comparative political economy literature has dealt with the international variation of wage regimes. It distinguished between two forms: coordinated and uncoordinated wage bargaining. The comparative political economy perspective confirms Pernicka and Glassner’s pessimism: the preconditions for transnational wage coordination have not emerged in the Eurozone and nor are they likely to in the foreseeable future. The Eurozone members may therefore, in the medium to long-term, face a hard choice, namely between fixed exchange rates and the autonomy of collective wage formation.