Industrial relations and the welfare state in Italy: Assessing the potential of negotiated change

The 1990s saw an important shift from long-term reform sclerosis in the Italian industrial relations and welfare state systems to important innovations, both in the mode of policy making (concertation via social pacts) and the content of reform ( decentralisation in the collective bargaining system and greater flexibilisation of a highly rigid labour market). After 1998, concertation weakened considerably once macroeconomic convergence for membership of EMU had been achieved, and contestation of the collective bargaining system and labour market regulation reappeared. This article seeks to explain the rise and demise of concertation over the past decade or so, and to assess the consequences of reform for wage bargaining and employment.