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More importantly, a close look at these two countries
serves to dismiss some of the claims of a well-known
globalisation thesis, according to which sustained economic
growth can only be attained through opening spaces for market
competition and removing barriers to the free movement of the
factors of production, including protection of employees. Even
though I will show how the opening of the two economies to
inflows of capital and labour has been critical to achieving
higher growth levels, these processes have been managed,
albeit in different ways and to different extents, through the
mechanism of social dialogue between trade unions, employers,
civil society actors and the state. The Spanish and Irish
experiences hence show that there are benefits to cooperation
and that globalisation cannot necessarily be reduced to a
zero-sum game. In the following paragraphs I will explore the
three ingredients for growth and will discuss their role in
the two countries. Finally, I will discuss some of the
problems that lie ahead and will stress the need to search for
innovative solutions within the consensual framework of
national social dialogue in order to manage the challenges
posed by global competition and migration.
The keys to
success:
1. Social Pacts and Concertation
According to some of the more enthusiastic supporters
of globalisation, this process is changing the shape of the
world as national governments are losing their capacity to
manage their economies autonomously. The increasingly
interconnected character of economic and social activities as
well as the significant role of multinational corporations,
the argument follows, are imposing binding constraints upon
the set of policies available to national actors. As a
consequence, governments are powerless, and are forced to
adopt a market logic in the design of their economic policies
in order to suit the demands and preferences of mobile
capital. The corollary of this trend is the extension of
neo-liberal economic policies that according to the so-called
Washington Consensus developed in the 1980s, deliver higher
economic growth and employment rates, though at the cost of an
increase in social and economic inequalities. More
specifically, by forcing the de-regulation of labour markets
and cuts in social policies, capital will be able to increase
profits at the expense of increasingly lower levels of
protection for employees.
The success stories of the Irish and Spanish economies
in the past fifteen years however show that there are ‘third
ways’ to achieve growth in addition to the neo-liberal one. As
a matter of fact, developments in these two countries portray
a very different picture to the one suggested by the
neo-liberal path and the hyper-globalist thesis. Hence, rather
than simply giving in to the pure market demands of
transnational capital, both the Spanish and Irish government
have engaged during the last twenty years in processes of
tripartite social dialogue with trade unions and employer
organisations whereby they have – rather successfully judging
by their results - managed external pressures through domestic
processes of consultation, concertation and social pacts. The
first objective of these processes has been to achieve
macroeconomic stability through wage moderation and the
negotiation of cuts in the welfare state. The second main
objective has been to introduce structural reforms in the
economy aimed at enhancing their growth and employment
potential. Finally, these agreements have also tried to
re-distribute the benefits derived from economic growth.
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Table 1: Social Pacts and Partnership Agreements in
Ireland and Spain |
Table 1
shows the most important steps in social dialogue in the last
twenty years. The experience of national tripartite social
dialogue was initiated in Spain in the late 1970s and early
1980s in the context of the country’s transition to democracy.
It has been argued that a strategy of consensus with all the
relevant social and political actors became the cornerstone
for a successful political transition. However, social pacts
in these years also had an important economic role, as the
Spanish economy only started to suffer from the full effects
of first oil crisis in the late 1970s. Accordingly, the social
pacts served to find negotiated or consensual solutions to a
situation of political, economic and social emergency. From a
political perspective, social pacts served to show the strong
determination of all social and political forces to
consolidate democracy in Spain after more than three decades
of dictatorship. The political role of social pacts became
particularly clear in 1983 when a new agreement was signed
right after a failed coup d’etat. However, the most
visible contribution of social pacts and tripartite agreements
was to economic stability. Even though these pacts covered a
large number of issues ranging from social policy to union
recognition and the labour market, the central theme to all of
them was the reduction of inflation through wage restraint and
changes in wage setting mechanisms. |
