Wage Setting Institutions and Economic Performance

The chapter adheres to a school of interpretation which is sceptic with respect to the virtues of neo-corporatism while asserting the several other institutional aspects, referred both to the labour market and the overall economic system that affect the macroeconomic performance. The chapter is also sceptic with respect to the idea of a decentralized corporatism, claiming that unemployment in Europe is a regional problem (being located mainly in some countries and regions). Therefore possible solutions should be based on a greater flexibility in the geographical wage structure, which, in turn, requires a reduced level of coordination, both formal and informal, at the national level. As in Sweden, a kind of ‘organised decentralisation’, may be of interest at the European level too.