ABSTRACT
Contemporary trends of the Italian welfare state and labour market have been determined through concertation between the state and social partners – most notably trade unions – in the 1990s. This chapter analyses the development of concertation and conceptualizes it as a policy alliance between the centre-left and organized labour. Starting with income policies, trade unions acquired a pivotal role in economic restructuring, which later included the reform of the pension system and the labour market. By granting participatory policy making and key concessions to union members, the centre-left gained popular consensus on hard-to-swallow economic reforms. However, concertazione increased the segmentation of the Italian labour market which, in turn, played against its main protagonists.
