Stella Zambarloukou

Collective Bargaining and Social Pacts: Greece in Comparative Perspective

Keywords: collective bargaining, Greece, institutionalism, social pact, variety of capitalism

■ What are the institutional prerequisites for the creation and maintenance of centralized collective bargaining and social pacts? This article compares Greek experience since 1990 with that in other countries, arguing that societies are likely to diverge on how they respond to the issues of changing bargaining structure and tripartite policy-making. While neo-institutionalist approaches, and particularly their 'varieties of capitalism' variant, can go a long way in interpreting these diverse responses, they have problems accounting for institutional change. To accomplish this we need a more dynamic understanding of how past institutional arrangements in combination with current tensions over particular issues, and the costs and opportunities presented to actors, give rise to distinctive responses.

Introduction

The breakdown in the 1980s of neo-corporatist arrangements, prevalent in many western European societies, encouraged social scientists to proclaim the end of centralized collective bargaining and social pact agreements, with a convergence towards decentralized bargaining driven by market forces. An underlying assumption of convergence theories is that technological restructuring and economic internationalization have weakened labour and rendered centralized bargaining obsolete. Moreover, it is believed that globalization and labour market restructuring necessitate cutbacks in public welfare and greater reliance on market mechanisms.

However, such claims have been widely questioned, particularly from the neo-institutionalist perspective [START_REF] Crouch | Introduction: The Future of Capitalist Diversity[END_REF][START_REF] Hall | An Introduction to Varieties of Capitalism[END_REF][START_REF] Hollingsworth | Coordination of Economic Actors and Social Systems of Production[END_REF][START_REF] Kitschelt | Convergence and Divergence in Advanced Capitalist Democracies[END_REF][START_REF] Soskice | Divergent Production Regimes: Coordinated and Uncoordinated Economies in the 1980s and 1990s[END_REF]. While all European countries have experienced pressure

The Role of Institutional Arrangements

Neo-institutionalist perspectives stress the need to focus on the variety of social and economic arrangements present in contemporary capitalist societies: countries respond differently to economic challenges according to prior institutional arrangements. This implies that there are choices to be made in economic governance, even if many of these choices are circumscribed by current institutional arrangements.

The main proposition underlying this perspective is that actors' behaviour is path-dependent, meaning that previous shaping of institutions steers responses to problems and challenges in a particular direction. The most common definition of institutions is that of [START_REF] North | Institutions, Institutional Change and Economic Performance[END_REF], as norms and rules of the game that guide the structuring of organizations. Institutions are historical constructs that shape the way interests are structured; the institutional arrangements of a society coordinate economic actors and provide the tools, resources and cognitive frameworks that allow them to respond to challenges [START_REF] Hollingsworth | On Institutional Embeddedness[END_REF][START_REF] Hollingsworth | Coordination of Economic Actors and Social Systems of Production[END_REF].

One of the main institutionalist arguments is that the state, formal associations (for example unions) and informal networks are just as important as markets in economic governance: their interventions modify the performance of markets and hence firms' behaviour. In particular, institutions are a mechanism of instilling trust. But some societies are in this sense more institutional than others, with arrangements other than markets playing a greater role in economic governance [START_REF] Crouch | Introduction: The Future of Capitalist Diversity[END_REF].

Following [START_REF] Soskice | Wage Determination: The Changing Role of Institutions in Advanced Industrialized Countries[END_REF][START_REF] Soskice | Divergent Production Regimes: Coordinated and Uncoordinated Economies in the 1980s and 1990s[END_REF], neo-institutionalists commonly distinguish between coordinated market economies (CMEs), such as Germany, and liberal market economies (LMEs), such as Britain and the USA. The primary difference between these two types centres on the degree to which economic activities are determined by market forces as opposed to other coordinating mechanisms. Emphasis is placed on how firms and business associations interact and pool resources. Within CMEs, firms coordinate their activities on such matters as wages, training programmes and research, while the state sets the framework within which this is accomplished. Industrial relations are coordinated through employer and labour associations on a national and/or sectoral level. By contrast, in LMEs firms lack centralized organizations and coordinating mechanisms and rely much more heavily on market mechanisms to generate the necessary resources. Within these economies labour relations are decentralized, and deregulated labour markets prevail.

The 'varieties of capitalism' (VoC) approach differs from previous attempts to categorize countries by their institutional characteristics, and particularly from the neo-corporatist literature, in that convergence is not expected. While the VoC approach does not primarily focus on forms of collective bargaining and policy-making, it provides insights as to why societies differ on these dimensions. Moreover, it improves on the neocorporatist literature by considering factors other than the organizational strength of labour (see also [START_REF] Regini | Tripartite Concertation and Varieties of Capitalism[END_REF]. For example, in CMEs it is employers who seek coordination and centralized bargaining as the best way of achieving their economic goals. In contrast, in LMEs firms are not in a position to build institutional structures to incorporate labour, which has led governments to reduce the influence of unions and impose change unilaterally [START_REF] Hall | An Introduction to Varieties of Capitalism[END_REF][START_REF] Soskice | Wage Determination: The Changing Role of Institutions in Advanced Industrialized Countries[END_REF][START_REF] Soskice | Divergent Production Regimes: Coordinated and Uncoordinated Economies in the 1980s and 1990s[END_REF]. This approach is particularly relevant to understanding recent social pacts, because unlike the corporatist policy-making of the 1970s, today's efforts are not a result of labour's strength but of increased competitive pressures that drive governments to cut back on welfare spending and limit labour's bargaining position in the labour market [START_REF] Ferner | Introduction: Towards European Industrial Relations?[END_REF].

The virtues of the VoC approach notwithstanding, there are also certain shortcomings. It has little power to explain change or to account for variations in policy-making not only between but also within countries [START_REF] Regini | Between Deregulation and Social Pacts: The Responses of European Economies to Globalization[END_REF]. An underlying assumption is that the prevailing institutional arrangements will persist: CMEs are expected to remain organized, regulatory and socially supportive, so that reforms occur through cooperation and concertation between the state and collective associations. LMEs, on the other hand, are expected to weaken further their regulatory mechanisms and social supports [START_REF] Kitschelt | Convergence and Divergence in Advanced Capitalist Democracies[END_REF]. Moreover, policies enacted in different areas are believed to be interdependent and complementary, and tied to a particular national cultural style. In short, responses to current economic challenges are expected to follow the logic inherent in their respective production systems. In reality, however, policy responses are rarely reached without tension and there is rarely only one outcome available.

Part of the problem emerges from the fact that the VoC literature focuses on a limited number of countries that are very close to the idealtype models constructed. In these countries it has been common for policies enacted to be complementary and consistent, and to reflect the predominant policy style. In part this was the case because both the CMEs and the LMEs examined were considered relatively successful, and as a result there was little pressure for institutional change. However, this has been changing during recent years and even countries like Germany are experiencing increased pressure to introduce reforms that challenge some of the existing institutional arrangements.

In addition, when one examines countries that do not fit neatly into either the CME or LME categories, and particularly countries where policy failure has been common, such policy consistency is rarely observed. Moreover, where 'policy failure' is identified tensions are likely to arise over the adjustments to be made, and responses will deviate from the current path. This has been the case in many countries of southern Europe, where social pacts for introducing reforms have been widely used, even though these countries do not share those institutional characteristics that are commonly identified with concerted policy-making. Some parallels may also be noted in central and eastern Europe.

For the dynamics of change to be better understood, a more finegrained analysis of institutional arrangements is needed, as well as a better understanding of what motivates actors' responses to change. While these are in part shaped by pre-existing institutional arrangements, changing circumstances and shifts in the balance of power are likely to encourage actors to interpret reality in a new frame. Policy outcomes are much more likely to be the joint result of past institutional arrangements and pathdependent behaviour, on the one hand, and, on the other, the tensions and frictions arising between those sectors of society seeking change and those wanting to preserve existing arrangements [START_REF] Berger | National Diversity and Global Capitalism[END_REF].

Change will be harder where institutional arrangements are deeply embedded and are supported by a wide section of the population. In contrast, where the rules of the game are less explicit, political conflicts and power relations assume a greater weight in decision-making. In order to have a better understanding of the dynamics of change, the role of political actors and particularly of the party system in mediating social conflicts must be considered; such factors are very important in determining the type of adjustment policies pursued and their chances of success.

The following section will outline some of the distinguishing features of the system of economic governance that has prevailed in Greece. Recent developments in collective bargaining and attempts at concerted policy-making are then examined. 1 Finally, Greek experience is placed in comparative perspective in order to gain a better understanding of the factors leading countries to adopt different strategies for coping with similar challenges.

A System of State-led Coordination?

Greece is closer to what has been termed 'state capitalism' [START_REF] Boyer | French Statism at the Crossroads[END_REF][START_REF] Schmidt | The Futures of European Capitalism[END_REF] than to either the CME or the LME model. In this variant of capitalism the state plays an active role in economic development, mediates relationships between firms, and between firms and financial capital, and determines industrial relations outcomes. However, in Greece, as in most South European countries, the state lacks the institutional capacity to ensure economic efficiency. Moreover, southern Europe also displays weak social protection, lack of cooperation between social partners and inequality of incomes and opportunities.

In Greece, late economic development combined with strong economic protection and suppressed wages, at least up until 1974, hindered the growth of competitive industries. The state intervened in the economy through numerous subsidies and tariffs, and in the 1970s and 1980s through large public enterprises. Economic development was largely concentrated in small, labour-intensive, low added-value firms and a large service and agricultural sector. In the postwar period, many firms owed their existence to insulation from foreign competition through protective legislation and the suppression of wages [START_REF] Gianitsis | Entry in the European Community and its Consequences for Industry and Foreign Trade[END_REF][START_REF] Tsoukalas | State Society and Work[END_REF]. This situation was reinforced by the presence of a large black-market economy, estimated at 35 percent of GDP. Despite the seemingly strong role of the Greek state, it was unable to carry out the necessary reforms to allow the Greek economy to develop in line with the rest of Europe [START_REF] Lymberaki | Reforming the Economy Without Society: Social and Institutional Constraints to Economic Reform in Post-1974 Greece[END_REF]. The clientilist organization of the political system contributed to policies being to a large extent determined by particularistic interests of groups that retained close relationships with the ruling party. Rules and norms were neither clearly defined nor always observed. While in the 1990s there was a change in rhetoric and policy, with emphasis on privatization of large state enterprises, this has neither changed substantially the overall structure of the economy, nor has it brought about the desired competitiveness of its productive forces.

The model of economic development achieved in Greece was based on a highly controlled system of collective bargaining, for many years excluding labour from policy-making. A postwar system of collective bargaining developed that was highly centralized and controlled by the state, which retained the right to exercise compulsory arbitration. The state also intervened to control the leadership of the monopolistic trade unions (General Confederation of Greek Labour [GSEE] in the private sector, Chief Directorate of Public Employees Associations [ADEDY] in the public). These practices were the product of the decades of authoritarian rule up to 1974, but persisted even after the transition to democracy; however, such intervention failed to curb union activity, and accentuated divisions along partisan lines that cut across union organizations at all levels. The effort by the state to control labour and impose incomes policies, and the desire by political parties to gain influence through unions, resulted in highly adversarial labour relations, demonstrated by the exceptionally high rates of strikes towards the end of the 1970s and for most of the 1980s [START_REF] Mavrogordatos | Between Pityokamtes and Prokroustes: Occupational Organisations in Contemporary Greece[END_REF][START_REF] Zambarloukou | The State and Union Organisation in Greece, 1936-90[END_REF].

Unions derived their strength primarily from the fact that they were tightly connected to the political process, and not from their collective bargaining capacity. These close ties were often of a clientilist nature and helped boost unions' political influence. One of their main sources of strength derived from the disruptive capacity of certain sections of labour, particularly in nationalized enterprises, public utilities and banking. These sectors formed the backbone of the union movement in the 1980s. In addition to being the most militant, these unions maintained close political ties to the socialist party (PASOK), which was in power for most of the 1980s. The eve of the new decade brought about major changes in collective bargaining procedures accompanied by changes in the tactics adopted by unions and employers respectively. It is to these changes that we now turn.

Centralized Collective Bargaining: New Meaning for an Old Practice

By the 1990s it was clear that the prevailing model of industrial relations did not deliver the desired outcomes: the politicization of labour conflicts had allowed important sections of labour to gain concessions from the state and employers, but, with growing unemployment and budget deficits, this model was yielding diminishing returns. The government sought to disengage from the processes of collective bargaining so that 'social partners' could resolve disputes autonomously and thus facilitate wage restraint, which was necessary for Greece to meet the Maastricht convergence criteria and increasing economic competition.

A new law in 1990 abolished compulsory arbitration as a means of resolving disputes and replaced it by a system of mediation, with arbitration available only if requested by both sides, or by unions when employers refuse negotiations. Collective bargaining over pay remains highly centralized, with agreements signed between GSEE and the main employers' associations to establish the minimum wage and serve as a guideline for agreements signed at sectoral, occupational and local levels. The new law also enables all firms with more than 50 employees to sign enterprise agreements, impossible for most firms previously.

The abolition of compulsory arbitration has placed pressure on unions and employers' associations to negotiate and reach consensus, since they can no longer rely on the state to intervene in case of deadlock. The first general agreement reached in 1991 settled for moderate minimum wage increases over a two-year period; previously one-year agreements were customary. Under the new arrangements a broader set of issues related to work organization were discussed, such as hours of work and health and safety [START_REF] Mouriki | Labour Relations and Social Dialogue in Greece: The Difficult Path from State Custody to Independence[END_REF], allowing greater coordination between the agreements signed at different levels. Unions have exhibited unprecedented moderation by Greek standards: wage increases have been modest and strike activity has declined substantially [START_REF] Eironline | Greece: Strike figures examined[END_REF].

Overall there is little indication of decentralization of collective bargaining, and the total number of agreements signed per year remains unchanged. However, sectoral agreements seem to be gaining ground over occupational agreements that predominated before the introduction of the new law. While bargaining at sectoral level suffers from the presence of numerous federations (over 60), the truth is that there was even greater segmentation under the previous arrangements. On the other hand, there is little indication that enterprise agreements are gaining ground, even though their signing has been facilitated by the new law: there was some increase in 2001, but year-to-year fluctuations are common. A recent survey of Greek firms has shown that 84.5 percent based the wage rates on sectoral collective agreements and only 0.5 percent on enterprise agreements [START_REF] Kouzis | Employment and Labour Relations in Greece: Reality, Trends and Prospects[END_REF].

Appearances are to some extent misleading: the presence of numerous small enterprises and an undocumented labour force has always meant that labour relations are less regulated than the official bargaining system might imply. Moreover, there are large tourist and agricultural sectors that rely heavily on seasonal employment where it is easy for employers to use flexible employment arrangements that are not found elsewhere. This phenomenon is accentuated by a large influx of undocumented immigrants. While these developments indicate that Greek labour is becoming more vulnerable, their negative impact might be restricted by greater coordination in collective bargaining.

Another development since the introduction of the new law is the reduction of the number of agreements reached through arbitration. In the 1980s these represented on average 42 percent of all agreements, but the proportion fell to about 14 percent of the total. 2 It is the weak unions in the private sector that usually resort to arbitration, when employers refuse to negotiate and give wage increases along the lines proposed by the general collective agreements [START_REF] Koukoules | Retrospect on a Controversial Past[END_REF]; no centralized agreements have been signed through arbitration procedures. Hence bipartite negotiations are today assuming greater weight than during the previous decades.

Developments in collective bargaining need to be understood as the joint result of existing institutional factors and the way unions and employers interpret the opportunities and costs of alternative options within the new economic and political context. Both had learned to organize and promote their interests through centralized associations and believed that they could defend their interests best if centralized forms of representation and bargaining were preserved. Furthermore, neither expected to promote their interests merely through market mechanisms, given that markets did not act spontaneously but were highly regulated. The primary role of the state in coordinating all economic activities encouraged all sides to address their demands or grievances to the government and to try to enter into a special relationship with political actors. This enhanced their eagerness to maintain the bargaining role of their respective national associations.

Unions' willingness to show moderation needs to be understood within the context of both the weaknesses of Greek labour and the changing economic circumstances of the 1990s. As already noted, the presence of a large unofficial economy and undocumented labour, in combination with numerous small family-run firms and a large percentage of self-employment, has meant that in practice a large section of the labour force was not unionized and remained outside collective bargaining. In the vast majority of Greek firms unions cannot be formed, since 96 percent of firms employ fewer than 21 employees, which is the minimum union membership demanded for a union to be established in an enterprise [START_REF] Kouzis | The Impact of EMU on Labour Relations[END_REF]. Labour's position has been further weakened by technological change and the opening up of the Greek economy to foreign competition, which has led to the closure of a number of industrial enterprises. The impact was even greater because of extensive privatization and the reduced capacity of the state to intervene in economic affairs. These factors, along with rising unemployment (over 10 percent from the mid-1990s) and declining union density (currently about 33 percent), led to the erosion of union strength at enterprise level.

Unions' strength had derived mainly from their ability to act in a coordinated way and from their ties to the political party system. In contrast, their bargaining power with private employers was not particularly strong and was further weakened as a result of economic crisis and industrial restructuring. The abolition of centralized bargaining would have significantly undermined union power and restricted union influence to a few sectors of the economy. At the same time, it became apparent to unions that for centralized collective bargaining to be maintained and to continue to play an important role, they could not continue the strategy of confrontation that had prevailed in the past, given that their capacity to gain concessions through confrontation was severely limited within the new economic context of the 1990s. Moreover, following the abolition of compulsory arbitration, centralized bargaining could only remain effective if they were willing to accept compromise. The union leadership needed to find alternative strategies to sustain a central role in social and political outcomes, and decided to adopt a more consensual and moderate style as part of a strategy. Thus union behaviour can be seen as shaped in part by previous institutional arrangements that rested on centralized associations and bargaining, and in part as the result of 'institutional learning', triggered by their weakened labour market position and their desire to retain political influence. This was facilitated by a weakening of partisan divisions within the union movement.

Employers also supported the disengagement of the state from collective bargaining, because they believed that government interference accentuated industrial conflict and had ceased to be effective in achieving wage restraint. However, all employers' organizations, particularly those representing manufacturing industry, wanted to maintain centralized collective agreements. They tended to believe that national bargaining by GSEE was more likely to preserve industrial peace, by restricting the activity of the more militant union factions, and that national agreements reduced uncertainty and allowed employers to plan ahead. This was particularly true if agreements were signed on a two-year basis, as was customary after 1990. Conversely, bargaining decentralization could lead to greater uncertainty and tension.

Institutional factors also help explain employers' continued support for centralized bargaining: they were organized in centralized associations and wished to preserve the status and influence of these. This is particularly true of the Association of Greek Industry, which enjoyed considerable political leverage. Centralized bargaining provided employers, like unions, with an important role in economic governance that they could use to seek concessions from government. In addition, the interests of the numerous small employers could best be served through centralized associations, since they did not have the direct access to the state which many large employers enjoyed. At the same time, the presence of a large unofficial economy offered exit mechanisms for those employers unwilling to adhere to collective agreements, undermining collective regulation in practice.

Tripartite Social Pacts: A Difficult Challenge

Tripartite concertation was never an established instrument in Greece. While attempts at consultation between the state, employers and labour were often made, they were never consistently pursued but tended to be of an ad hoc nature. Moreover, the state usually initiated such consultation in order to gain union consent to particular policy initiatives, never in order to create a permanent policy forum [START_REF] Gabroglou | Social Dialogue and Productivity[END_REF][START_REF] Kouzis | The Impact of EMU on Labour Relations[END_REF]. Thus such efforts came to be treated with suspicion, particularly by the unions. During the past two decades there have indeed been more systematic efforts to establish tripartite concertation, but with limited success. Two recent efforts stand out, directed at achieving reforms in labour market organization and social security.

In 1997 the government invited union and employer representatives to negotiations on the themes of growth, competitiveness and employment. After seven months of dialogue a 'confidence pact' was signed between the labour confederations of the private and public sector, employers' associations and government. Its terms were to be taken into account in the adoption of the new labour legislation and included 12 points, covering public investment as a means of creating jobs, improved skills training, active labour policies, and structural changes in the labour market designed to combat unemployment. In addition, the partners agreed to wage moderation. The pact largely excluded issues on which there were major disagreements, or referred to them only in very general terms. In particular, the proposal for increased labour flexibility, which was supported by employers but opposed by unions, was not included. However, the government included labour flexibility in legislation introduced in 1998, provoking fierce labour protests. The new law set the framework for part-time employment and flexible working-time arrangements. In practice, however, many of its clauses remained inactive, particularly those on flexible work time, because they could not be implemented without prior agreement between unions and management [START_REF] Mouriki | Labour Relations and Social Dialogue in Greece: The Difficult Path from State Custody to Independence[END_REF].

In 2000 the social partners were once more invited to present their views on employment and unemployment. The central issue was again the organization of work time, but agreement could still not be reached and GSEE withdrew from the negotiations. The government introduced a new law unilaterally, designed to enhance flexibility in working-time arrangements and to regulate overtime and redundancies. This was criticized by both labour and employers, but for opposite reasons: the unions believed that it would lead to the deregulation of labour, while employers believed that it introduced new rigidities and would increase labour costs.

A similar fate followed efforts to reform the social security system. This issue was on the agenda for many years: the system was highly fragmented and delivered very unequal benefits to different occupational groups and different generations, and there were widespread doubts as to its viability [START_REF] Matsanganis | Yet Another Piece of Pension Reform in Greece[END_REF]. In 2001 the centre-left PASOK government put forward a reform plan, and invited unions and employers to discuss the proposed changes. These would have raised the retirement age to 65 for all employees and reduced the final entitlements for most. The reforms would have streamlined the pension benefits for most lower-paid employees, without, however, radically changing the way the social security system is organized. Both GSEE and ADEDY rejected the proposals outright, and a massive wave of strikes followed, after which the government was forced to withdraw the proposal.

One year later unions and employers' organizations were invited to discuss the reform of the social security system from scratch. However, a climate of mutual suspicion had already been established, making serious negotiations impossible. Following inconclusive consultations with the unions, in June 2002 the government introduced a reform bill which contained much more limited reforms than the initial proposals. Despite this, both the public and private sector unions disagreed and called for a general strike. The government proceeded unilaterally and introduced the proposed reform of the social security system.

These failures to achieve tripartite policy-making reflected in part the lack of trust between social partners and the absence of a culture that promotes dialogue and consensus. Social actors were accustomed to influencing the state through their particularistic ties with political actors rather than through official channels of consultation. For unions, reaching a compromise was made more difficult by the partisan divisions that run across the labour movement and the close connection between political parties and union leaderships. As union organizations affiliated with opposition political parties almost always opposed reforms proposed by the government, even those unions affiliated with the ruling party were forced to adopt a more confrontational stance so as not to be accused by other labour factions of failing to protect workers' rights.

However, the absence of institutions promoting consensus and negotiation was not the only factor inhibiting concertation and successful social pacts. As evidence from other countries indicates, such institutional supports are neither sufficient nor always a necessary condition for concertation to be achieved. Introducing reforms that are likely to lead to diminished benefits for large sections of the labour force are a difficult endeavour even in countries where concertation has been the norm in the past. In the 1990s, social pacts on labour market and social security reforms were more often achieved in countries like Italy or Ireland without a strong tradition of concertation [START_REF] Siegel | Social Pacts Revisited: Competitive Concertation and Complex Causality in Negotiated Welfare State Reforms[END_REF]. This shows that while past institutional arrangements influence actors' assessments, changing circumstances will incline them to reassess their policy options and to weigh the opportunities and costs of entering into concerted policy-making.

Unions in Greece had much to lose by accepting the proposed reforms, given that these were highly unpopular among their members. Moreover, they were not offered anything substantial in return. Conversely, they knew that they could exert greater pressure on the government through confrontation than at the negotiating table, where they also had to face the employers' side. Unions retained close ties to the political party system while their strength was greatest in public enterprises, giving them the power to veto many government initiatives. In contrast, their position vis-a-vis private sector employers was rather weak, which partly explains why they have opted out of an adversarial strategy in bipartite collective bargaining.

The final outcome of these reform efforts reflects to a greater extent the tensions present and the political stakes confronting the government. The fact that, for the most part, it introduced much more moderate reforms than initially intended reflected the political costs of each solution and the relative power exercised by the various groups affected by the proposed measures. As pointed out by [START_REF] Kitschelt | Convergence and Divergence in Advanced Capitalist Democracies[END_REF], mass-party organizations and networks of clientilism hinder changes that are likely to affect important constituencies. In Greece the clientilist organization of politics has meant that policies privileged certain groups over others, in ways that were neither in accordance with market criteria, nor based on a rationale for social equity and redistribution of income, but reflected ties to the ruling party [START_REF] Petmezidou-Tzoulouvi | Social Inequalities and Social Policies[END_REF][START_REF] Sotiropoulos | Facets of Babylonia: Interpretations of the Development of the Welfare State in Greece[END_REF]. The fact that unions were able to resist reforms put forward by the government, and particularly those concerning the social security system, must be understood in light of the particularities of the political party system and the clientilist ties formed with sections of labour. The proposed changes of the social security system would have particularly affected those groups that formed the backbone of the union movement in Greece, namely public utility employees and the banking sector, which were also traditionally affiliated with the ruling socialist party. In addition they threatened the benefits enjoyed by a number of powerful professional groups. Restricting the benefits enjoyed by these sectors of labour entailed a high political cost, which largely explains why the government did not proceed with its initial proposals.

While both employer and union behaviour was influenced by prior institutional arrangements and ideological preferences that made pactbuilding a very difficult endeavour, the outcome might have been otherwise if power relations and political alignments were different, and if social actors had been forced to rethink their options. At the same time the ability of unions to resist many of the intended changes cannot be explained in terms of power relations alone. Unions in Greece are, for reasons mentioned in a previous section, not very strong in a strictly market sense. Thus the capacity to block adjustment policies must be seen in terms of both the relative strength of sections of labour and their links to the political system. This factor raised the costs of introducing unpopular reforms, which explains why change has been so slow. It also explains in part why the unions did not feel pressured to enter into a process of political exchange.

Comparing Results Across Europe

Recent pressures towards the deregulation and decentralization of industrial relations and cutbacks in social spending have left no country unaffected. Nevertheless, not all countries responded in the same way. Moves towards greater deregulation and decentralization have gone furthest in LMEs, while in CMEs and state-led market economies the outcomes vary. While in many ways these countries have also moved towards greater liberalization, it is significant that in other respects greater coordination seems to have been achieved.

In Europe, changes have gone furthest in the UK, where low institutionalization of non-market forces has facilitated the unilateral action of employers and government in introducing further decentralization and deregulation of industrial relations and working conditions. The role of trade unions has largely been restricted to collective bargaining at enterprise level, but bargaining coverage has fallen sharply and individual contracts are becoming the norm. Welfare benefits have been reduced and market mechanisms increasingly determine industrial relations.

In CMEs such sweeping changes have been prevented and governments have been more eager to bring about reforms in a concerted way; but this has not always been possible. On the whole, it has been relatively easier to reach agreement on a collective bargaining strategy and structure than to deal with pressures to reform the social security system or to bring about greater labour market flexibility. Even though decentralizing tendencies have not been totally avoided, with the exception of Sweden, most countries have not radically altered their collective bargaining structures and in some cases there has been a shift towards greater coordination.

Germany had for a long time resisted pressures for change but in the 1990s the dual effects of global competition and the costs of unification put increasing strain on existing arrangements. While changes towards a greater market orientation can be detected, the main features of the system have not been altered. Collective bargaining at sectoral level has been maintained as the dominant form of negotiation, while industrial relations remain for the most part cooperative. The persistence of collective bargaining arrangements in Germany can be explained by the fact that the majority of employers continue to favour existing arrangements as a source of stability and social peace. There are, however, increasing tendencies for sections of labour to be left outside the scope of collective bargaining, particularly because many small employers have opted out of the process, especially in the East. As a result a dual labour market is increasingly evident [START_REF] Thelen | The Future of Nationally Embedded Capitalism[END_REF].

While consensus continues to characterize collective bargaining, efforts to reform the social security system and bring about greater flexibility in employment relations through tripartite policy-making have been unsuccessful. In the past it was customary for changes on such issues to be piecemeal and implemented following bilateral negotiations with government. In 1996, an initiative was made to develop formal tripartite concertation, following the offer by the largest trade union to accept wage restraint in exchange for employment creation measures and the maintenance of welfare benefits. The Kohl government sought to take forward this 'alliance for jobs' but added to the agenda its own plans for welfare retrenchment, and the talks broke down. The Schröder government elected in 1998 revitalized the alliance, in a new effort to bring about reforms through tripartite concertation. Though the alliance formally continued until 2002, little was achieved partly because the sense of crisis that pushed unions in other countries to consent to reforms was absent. Moreover, the institutional legacy of welfare corporatism paradoxically inhibited a tripartite social pact, because it provided unions with a veto role in government policies and accustomed them to making concessions only when offered something in return. It has also been easier for German unions to accept piecemeal changes through less official channels of bilateral consultation than to agree to far-reaching 'package deal' reforms, in part because the sectoral organization of German unions makes it hard for them to determine a common strategy [START_REF] Hassel | The Problem of Political Exchange in Complex Governance Systems: The Case of Germany's Alliance for Jobs[END_REF].

Italy has gone the furthest in bringing about change through concertation and pact-building: surprisingly, given its long history of adversarial industrial relations and the weak institutionalization of collective bargaining and policy-making. In 1993, against a background of political and economic crisis, the first 'technocratic' (non-partisan) government led by Amato promoted an agreement between unions, employers and government, which committed unions on moderate wage increases and abolished the cost-of-living sliding scale (scala mobile). In exchange, it replaced the fragmented bargaining processes with a more hierarchical and coordinated system, allowing unions a greater say in policy-making. In 1995, the second technocratic government led by Dini made one of its priorities the reform of the pensions system. In contrast to the first Berlusconi government which it replaced, it succeeded in mobilizing the necessary support to bring about reforms. This was achieved by bringing unions into the policy-making process and taking into account many of their concerns, including their wish to minimize the losses for older workers [START_REF] Regini | Employers, Unions and the State: The Resurgence of Concertation in Italy[END_REF]. Unions, for their part, undertook the task of persuading their rank and file of the necessity for change, and referendums were held across the country on the issue [START_REF] Baccaro | The Construction of "Democratic" Corporatism in Italy[END_REF]. Employers disagreed early on, demanding more radical changes, and left the process; the reform was thus based on a bilateral agreement between the unions and government. The following year, however, a tripartite employment pact was signed, introducing greater labour market flexibility in exchange for measures to combat unemployment.

The Italian and Greek cases share many similarities but also display important differences. Both countries had a tradition of adversarial industrial relations and unions plagued by partisan divisions. Economic pressures and growing insecurity among workers created doubts about the continuing capacity of unions to defend rank-and-file demands. The need for greater stability to meet new challenges led the government to enhance the institutional role of labour, while in exchange unions conceded wage moderation. Employers, too, consented in an effort to gain the desired stability. The process was facilitated by the crisis situation stemming from a series of political scandals, poor economic performance and the urgent need to meet the Maastricht convergence criteria and join the euro. The latter, coupled with the low returns of previous adversarial relations and the low institutionalization of bargaining arrangements, facilitated institutional change, leading to greater coordination of industrial relations.

Italian and Greek unions reacted differently to attempts at pactbuilding. The different responses should be attributed primarily to the different political climates that prevailed in the two countries, which led unions to interpret differently the alternative costs and benefits of consenting to the proposed reforms. Italian unions had fewer chances to exert political pressure to stop the reforms, in part because the technocratic government that came to power in 1995 was less susceptible to such pressure. Moreover, the crisis that prevailed in the political system and the economy was so severe as to persuade the unions that it was in their interests to compromise in order not to lose more in the long run. The fact that the pensions agreement took place only between unions and government legitimized the processes in the eyes of rank-and-file workers. Despite organizational divisions, all main unions shared common perspectives: they were persuaded that the social security reform was the best compromise, and also saw a long-term gain from being included in the policy process.

In contrast, the Greek unions felt that they could veto social security reforms because of their close ties to the ruling party, which they could use to exert pressure on the government, while the strength of partisan conflicts made internal opposition more effective. The lack of political consensus over the proposed reforms made it harder for unions to sell these to their rank and file, which explains why they were rejected even on those occasions when their introduction appeared inevitable. Moreover, the Greek government made no systematic attempt to engage in dialogue with unions and failed to persuade them that they would gain something in return. While Greece and Germany differ greatly in their institutional characteristics and the organizational basis of trade unions, in both countries the latter decided not to accept the reforms promoted through tripartite consultation, in large part because of their capacity to veto government decisions. In neither country were the unions persuaded that they had something to gain by entering into a tripartite agreement.

Conclusions

While neo-institutionalist analysis can go a long way in interpreting actors' responses in different countries, it has difficulties interpreting changes in institutional behaviour. In order to have a better understanding of actors' responses to change we need to combine institutional analysis with a more actor-centred approach. The examples presented above show that while past historical and institutional legacies help to shape actors' interpretation of reality and constrain their behaviour, there are still choices to be made. Moreover, historical legacies during periods of crisis might prove a springboard for dramatic changes. This is demonstrated in the case of Italy and to a lesser extent Greece, which have undergone some of the more radical changes in collective bargaining and social policy-making. In both countries, the shared feeling that previous arrangements no longer delivered the desired results facilitated shifts in institutional behaviour.

On the whole, centralized or coordinated collective bargaining and tripartite social pacts are more likely in countries where non-market mechanisms have always had a more central coordinating role. But this in and of itself does not guarantee that they will in fact occur. It has been easier to maintain or even enhance centralized or coordinated collective bargaining than to negotiate tripartite pacts. This can be explained by the fact that both unions and employers have so far felt that they have something to gain by compromising on collective bargaining arrangements, whereas social pacts on welfare and labour market reforms imply more fundamental concessions on the part of unions -in effect, they can represent a zero-sum game. In this sense the signing of such pacts constitutes, in most cases, a deviation from previous practices, and the decision to accept such a compromise involves primarily a strategic choice. Social pacts between unions, employers and the state are more likely to be achieved when unions judge that the alternative of not consenting would have more far-reaching negative outcomes in the long run. In contrast, where unions maintain a strong veto role in government decisions they are less likely to concede. NOTES

European Journal of Industrial Relations 12(2)

The article takes into account developments up to the spring of

2004, when the conservative New Democracy party was elected to office. 2 Figures are provided by the mediation and arbitration service, OMED. Arbitration agreements have increased since 2001, reaching 23 percent in 2003, but they remain far below the pre-1990 level.


Robert Plasman

Michael Rusinek

François Rycx

Keywords: collective bargaining, manufacturing industry, trade unions, wage structure

teaching and research institutions in France or abroad, or from public or private research centers.

Introduction

Institutions are an important determinant of the shape of the wage structure. Research using cross-country comparisons shows that the more centralized and/or coordinated the wage setting system, the more compressed is the wage distribution [START_REF] Blau | At Home and Abroad. U.S. Labor-Market Performance in International Perspective[END_REF][START_REF] Teulings | Corporatism or Competition? Labour Contracts, Institutions and Wage Structures in International Comparison[END_REF][START_REF] Wallerstein | Wage-Setting Institutions and Pay Inequality in Advanced Industrial Societies[END_REF]. This is due to two factors. Within centralized countries, multi-employer agreements set minimum wages that increase wages at the bottom of the wage distribution. In addition, multi-employer bargaining coordinates wage-setting, reducing inter-industry and inter-firm differentials. Research into the wage-structure effect of different bargaining regimes within countries where multi-employer bargaining is the prevalent bargaining mode, which is the case in most Western European countries, is much less extensive and produces more heterogeneous results. Under such settings most workers, irrespective of their union status, are covered by a nationwide and/or sectoral multi-employer agreement which sets minimum wages for defined categories of workers. Wage bargaining may also occur at the firm and/or establishment level, generally increasing wages above the national or industry standards. It is interesting to know the wage structure effect of the different bargaining regimes under multi-level bargaining since many actors, including the OECD (2004) and European Commission (2004) favour giving more weight to single-employer bargaining in the process of wage determination.

Previous studies have shown that single-employer bargaining increases wage levels relative to multi-employer bargaining [START_REF] Cardoso | Bargained Wages, Wage Drift and the Design of the Wage Setting System[END_REF]Dell'Aringa and Lucifora, 1994a;[START_REF] Hartog | Wages and the Bargaining Regime in a Corporatist Setting: The Netherlands[END_REF][START_REF] Palenzuela | Wage Drift in Collective Bargaining at the Firm Level: Evidence From Spain[END_REF][START_REF] Rycx | Industry Wage Differentials and the Bargaining Regime in a Corporatist Country[END_REF]. Findings concerning the effect of the bargaining regime on the dispersion of wages are much more heterogeneous. Theoretically, the dispersion of wages is expected to be higher for workers covered by single-employer agreements because they may increase inter-firm wage differentials by taking into account firm-specific characteristics and local economic conditions. This was observed in Sweden by [START_REF] Hibbs | Wage Compression, Wage Drift and Wage Inflation in Sweden[END_REF], who found that the sensitivity of wage changes to local market conditions was significantly higher after the move from central to industry and local bargaining in 1982, and that wage dispersion has been increasing since then. For Belgium, [START_REF] Rycx | Industry Wage Differentials and the Bargaining Regime in a Corporatist Country[END_REF] found a lower dispersion of inter-industry wage differentials for firms covered only by a multi-employer agreement, compared to firms covered additionally by a single-employer agreement. This suggests that rent-sharing or efficiency wage practices are more common when there is a firm-specific agreement and that it increases the dispersion of wages. For Portugal, [START_REF] Cardoso | Bargained Wages, Wage Drift and the Design of the Wage Setting System[END_REF] conclude that wage drift (ratio between actual and negotiated wages) works to overcome the constraints imposed by multi-employer bargaining, allowing firms wider flexibility in their wage policy.

Other studies, however, show the opposite. Dell'Aringa and Lucifora (1994b) found that local wage bargaining significantly reduces wage dispersion across establishments in Italy. They interpreted this as a sign of a greater desire for wage standardization among establishments covered by such an agreement. [START_REF] Checchi | The Effects of Unions on Wage Inequality. The Italian Case in the Nineties[END_REF] also found that, in Italy, local bargaining reduces wage inequality.

Other researchers have focused on the effect of the bargaining regime on wage dispersion within firms. According to [START_REF] Rodriguez-Gutiérez | Wage Dispersion Within Firms and Collective Bargaining in Spain[END_REF] this results from a bargaining process between the union and the employer, who have opposite preferences. Trade unions are in favour of higher wage levels and smaller dispersion, while employers prefer greater dispersion. This preference is explained by Tournament theory [START_REF] Lazear | Rank-Order Tournament as Optimum Labor Contracts[END_REF] which predicts that a more dispersed wage structure (resulting from performance-related pay or increased inter-occupational differentials) may provide incentives for workers to increase their effort. The fact that unionism reduces wage dispersion has been widely demonstrated empirically in Anglo-Saxon countries [START_REF] Freeman | Unionism and the Dispersion of Wages[END_REF]. For Italy, Dell' Aringa and Lucifora (1994b) found that the within-firm wage dispersion decreases significantly as union density rises. A similar result has been found by [START_REF] Rodriguez-Gutiérez | Wage Dispersion Within Firms and Collective Bargaining in Spain[END_REF] for firms covered by a company agreement in Spain. Overall, the final outcome of company bargaining on the withinfirm wage dispersion seems ambiguous: Dell'Aringa and Lucifora (1994b) found no difference in within-firm wage dispersion between firms covered only by a multi-employer agreement and those covered additionally by a company agreement. Conversely, [START_REF] Dominguez | Collective Bargaining and Within-firm Wage Dispersion in Spain[END_REF] found that company bargaining reduces the within-firm wage dispersion in Spain. They attribute this result to the action of unions. Finally, Dell 'Aringa et al. (2004), studying the effect of the bargaining regime on within-establishment wage inequality in Italy, Spain, Belgium and Ireland, found greater within-establishment inequality for establishments covered by a single-employer agreement. However, when a larger set of controls was included, the association was inverted or became statistically insignificant.

To sum up, this literature review shows that, compared to multi-employer bargaining, single-employer bargaining may increase or decrease wage dispersion, and this may happen through the modification of inter-firm wage differentials and/or within-firm wage dispersion.

In this article we study the wage structure effect of different bargaining regimes in the manufacturing sector in Belgium, Denmark and Spain. Multi-employer bargaining predominates in all three countries, but the bargaining structure and its history differ greatly between them. In Belgium and Denmark, single-employer bargaining has greatly expanded since the 1980s on the initiative of employers and the government. In Spain, by contrast, the structure of collective bargaining is more inert and has not changed very much since the Franco period, when company agreements were used as a tool for worker mobilization and for political struggle. Moreover, in Belgium and Denmark single-employer agreements always complement multi-employer agreements, whereas in Spain the two are mutually exclusive. Therefore, firms covered by a single-employer agreement in Spain often display a high union presence, but this is not necessarily the case in Belgium and Denmark. Previous studies show that wage dispersion is smaller under single-employer agreements in Spain while the opposite holds true for Belgium. This has never been studied in Denmark but it has been in another Scandinavian country (Sweden), where the effects are found to be similar to those in Belgium. Multi-country comparison is necessary to determine whether this divergence in results is due to national differences or to the use of different data and methodologies.

The first objective of this article is thus to provide reliable comparative results. More precisely, we compare the wage dispersion (standard deviation and inter-decile wage differentials) and the wage levels between workers covered by a multi-employer agreement and workers covered by a single-employer agreement. We use a unique harmonized multicountry dataset, the European Structure of Earnings Survey of 1995, which contains detailed information about wages, workers' and employers' characteristics and the level(s) of the collective agreements covering each firm. Although matched employer-employee datasets are now available for a number of individual countries, to the best of our knowledge the ESES is the only multi-country dataset with matched employer-employee data. Our results confirm previous findings that, compared to multi-employer bargaining, single-employer bargaining has a positive effect both on wage levels and on wage dispersion in Belgium and in Denmark; while in Spain, single-employer bargaining also increases wage levels but reduces wage dispersion. Our interpretation is that singleemployer agreements are mainly used in Denmark and Belgium to adapt pay to the specificities of the firm and to local economic conditions. In Spain, they are mainly used by unions to raise wages and to compress the wage distribution.

Institutional Framework

Multi-employer bargaining is the dominant bargaining regime in all three countries, but they differ in many other aspects. This section provides a short description of the collective bargaining system in each country. We also link the arguments presented in the previous section to each country's institutional characteristics, in order to derive some expectations about empirical results.

In Belgium and Denmark, collective bargaining occurs at three levels in a hierarchical manner, such that an agreement at one level cannot be less favourable than higher-level agreements. Inter-sectoral agreements cover the whole country. They set national minimum wages and a margin for wage increases, and define the framework for the lower bargaining levels. Sectoral agreements set industry standards (minimum wages by category of worker) for most of the employees in the industry concerned. Finally, wages may be increased at the level of the firm or establishment by a single-employer agreement. The importance of each level in the wage-setting process has varied over time. Until the 1980s, wages were mainly determined by sectoral agreements. In the late 1960s, single-employer bargaining expanded, mainly because shop-floor unions sought pay increases in excess of higherlevel standard rates [START_REF] Traxler | National Labour Relations in Internationalized Markets. A Comparative Study of Institutions, Change, and Performance[END_REF]. The economic crisis that followed the two oil shocks led employers in many countries to call for more flexible working conditions, leading to a second wave of bargaining decentralization in the mid-1980s with company-level determination of working time. A third wave in the 1990s was initiated by employers in order to tailor wages more strictly to the performance of the individual firm [START_REF] Traxler | National Labour Relations in Internationalized Markets. A Comparative Study of Institutions, Change, and Performance[END_REF]. Because Belgium and Denmark are both small, open economies, they were severely hit by the economic crisis.

In Denmark, there was a shift in many industry agreements from the standard rate system, where the sectoral agreement prescribes the wages actually earned, to the minimum pay system, where actual pay may well be higher. Between 1989 and 1995, the proportion of workers covered by the minimum pay system rose from 30 to 61 percent [START_REF] Andersen | Changes in Danish Labor Market Bargaining: The Prototypical Case of Organized Decentralization?[END_REF]. Pay increases at company level take often the form of a 'pay-sum bargaining': the aggregate size of the pay increase is determined by collective bargaining but its allocation is left to management [START_REF] Traxler | National Labour Relations in Internationalized Markets. A Comparative Study of Institutions, Change, and Performance[END_REF]. In addition, the cost-of-living indexation mechanism was abolished in 1982, which reduced aggregate wage increases.

In Belgium, pay determination has also shifted from industry to singleemployer level. An explosion in company agreements took place between 1980 and 1985, the number rising from 341 to 3253. It declined after this period and stabilized around 2000 in the 1990s [START_REF] Van Ruysseveldt | Weak Corporatisms Going Different Ways? Industrial Relations in the Netherlands and Belgium[END_REF]. In order to preserve the competitiveness of Belgian firms, the government froze private-sector wages for the periods 1981-2. Wage increases above inflation were forbidden from 1983 to 1986. From 1984 to 1986, the cost-of-living indexation procedure was altered so that the first two percent each year was not compensated by a wage increase but instead used to supplement the social security fund. Finally, a new wage freeze was imposed in 1995-6, followed by a law on competitiveness imposing a ceiling for wage increases based on those in France, Germany and the Netherlands. The automatic link between prices and wages stayed in place, although the system changed in order to reduce aggregate wage increases (by excluding products like fuel, tobacco and alcohol from the price index).

Because single-employer agreements cannot set wages below national and industry standards, wage levels should on average, in both countries, be higher when a company agreement supplements the multi-employer agreement. We also expect inter-firm wage differentials to be higher for firms covered by a single-employer agreement because they can take into account firm-specific characteristics (size, profit, region) that are generally not among the criteria that define industry and national standards (those criteria are principally age, experience and occupation). Finally, the presence of a company agreement may be expected to increase wage dispersion, because in the 1990s many such agreements were initiated by employers in order to introduce new flexible pay practices.

In Spain, there was no inter-sectoral agreement at the time of the survey (these occurred however between 1977 and 1986 and were reintroduced in 1997). Working conditions were determined either by a sectoral or a company agreement. Following the 'no competition' principle, the two regimes deal with the same type of subjects and there is no division of responsibility between them (EIRO, 1997). Hence in contrast to Belgium and Denmark, a firm covered by a company agreement is not constrained by the industry agreement (though the 1997 inter-sectoral agreement improved coordination between the different bargaining regimes).

These conditions were in place from the legalization of collective bargaining in 1958. Until the death of Franco in 1975, collective bargaining was strongly controlled by the government. Industry agreements covered most of the workforce, but were much less respected than company agreements which were the result of almost free collective bargaining between employers and works councils. This is why trade unions (which were illegal during this period) attached much more importance to company bargaining, which was also used as a tool for worker mobilization and political struggle [START_REF] Toharia | Un Fordisme Inachevé, entre Transition Politique et Crise Economique: l'Espagne[END_REF]. The percentage of the workforce covered by company agreements has been fairly stable over time, signalling a certain inertia in the structure of collective bargaining.

During the 1990s, while an expansion of single-employer agreements occurred in many countries, in Spain there was a decrease: 15 percent of employees were covered by a company agreement in 1990, but only 11 percent in 2001. Conversely the percentage of workers covered by industry agreements rose from 85 to 89 percent. In fact, employers' need for more pay flexibility is met by a multi-employer bargaining regime which is less binding on companies than single-employer agreements. 1 For example, since 1994 opt-out clauses have allowed firms covered by a sectoral agreement to pay wages below industry standards in the case of economic difficulties. Hence the existence of a company collective agreement is still associated with greater trade union presence. According to Garcia-Serrano and Mallo (2002: 74), more than 80 percent of collective agreements at plant/firm level are initiated by works councils; 'the existence of this sort of agreement is a proxy variable for an organized action of workers' representatives'. [START_REF] Rodriguez-Gutiérez | Wage Dispersion Within Firms and Collective Bargaining in Spain[END_REF] reports, for the period 1990-4, an average union density rate of 36 percent in firms covered by a company agreement, far above the national average of 11 percent (OECD, 2004). 2 Moreover, company agreements are more often concluded in large firms [START_REF] Izquierdo | Collective Bargaining in Spain: An Individual Data Analysis[END_REF], where unions are traditionally better organized.

To summarize, there are two mutually exclusive bargaining regimes in Spain, with single-employer bargaining in firms with a higher union presence, while multi-employer bargaining is less binding for companies. Therefore, the wage structure effect of the bargaining regime in Spain may resemble that in Anglo-Saxon countries: we would expect wages to be higher when the firm is covered by a company agreement. We would also expect the within-firm wage dispersion to be lower. Inter-firm wage differentials may also be lower under the company agreement regime because of the trade union desire for standardization. Moreover, a majority of industry agreements are regional or provincial. In 1995, 59 percent of all workers covered by a collective agreement were covered by a local, provincial or regional industry agreement while national agreements covered only 27 percent of all workers (Izqierdo et al., 2003). Large firms, which may have establishments in different regions, are often covered by a company agreement, which sets identical conditions for the different regional establishments; so regional differentials may be lower under company agreements.

Data

This study is based on the 1995 European Structure of Earnings Survey, produced by Eurostat. This unique harmonized survey contains a wealth of information provided by the management of establishments, both on the firm characteristics (sector of activity, number of workers, region, form of economic control) and on the individuals they employ (age, level of education, paid hours, gender, occupation). It is representative of all establishments employing at least 10 workers across the economy, with the exception of agriculture and public services. 3 This dataset provides information on the level or levels of collective agreement covering each establishment. Wage data relate to actual pay, not just negotiated rates, and include annual bonuses. This is relevant to our study because in many single-employer agreements, wage supplements are paid through bonuses (13th month, profit-sharing, productivity premium). On one hand, this conforms to the definition of wages that is currently used in the literature, so that we can compare our results with previous findings. On the other, we must be cautious when interpreting our results because pay levels may be the outcome of other processes besides collective bargaining. 4 We restrict our analysis to the manufacturing sector in order to minimize this problem, because we think that the differences between actual pay and negotiated rates of pay are higher in most service sectors. However, this difference may be more important for the wages observed in the industry agreements in Spain, because of the less binding nature of those agreements for companies.

Focusing on one sector has the additional advantage of estimating the effects of the bargaining regime on a sample of homogeneous individuals. Indeed, we think that these effects may differ greatly depending on the type of firm, worker and industry agreement. Moreover, manufacturing is the key bargaining sector in Denmark, setting the benchmark for agreements in other sectors [START_REF] Andersen | The Danish Flexicurity Model. The Role of the Collective Bargaining System[END_REF]. We also exclude workers who are not covered by any agreement, as well as by those that cannot be classified as single or multi-employer agreements (for instance, an industry may contain a single firm). Finally, we exclude workers belonging to a category (occupation or industry) not present in one of the two regimes within a country. In total, this corresponds to a reduction of seven, six and two percent respectively for the Belgian, Danish and Spanish samples. 5 Several interesting points may be highlighted in the analysis of the dataset. In all three countries, wages are on average significantly higher under single-employer agreements. The standard deviation of log wages is smaller under single-employer than under multi-employer agreements in Spain. The opposite result is found for Denmark. No significant difference in standard deviation can be seen for Belgium. Seniority in the company is on average six years greater under company agreements than under industry agreements in Spain, while the difference in seniority between the two regimes is much smaller in Belgium (three years) and Denmark (less than one year). This is in line with Garcia-Serrano and Malo (2002), who found that firms with company agreements in Spain had significantly lower turnover than firms under industry agreement. They interpreted this result as a consequence of a 'voice effect': when workers, by means of works councils or union delegations, can express their grievances or demands, they quit less frequently and job tenure is longer.

There is a large difference in job security between the two regimes in Spain: 10 percent of workers under company agreements are employed on fixed-term contracts, as against 26 percent of those under industry agreements. In Belgium and Denmark, the proportion employed on fixed term contracts does not exceed three percent in either regime. The number of employees is, on average, significantly larger in firms that sign their own collective agreement in all three countries, perhaps because workers are generally better organized in large firms. Finally, we see that firms in Belgium and Spain are more often publicly owned when there is a single-employer agreement. According to [START_REF] Dominguez | Collective Bargaining and Within-firm Wage Dispersion in Spain[END_REF], the proportion of trade union members is greater when the firm is publicly owned in Spain. In our sample, all firms in both regimes are privately owned in Denmark.

Estimation Estimation Procedure

A comparison of simple statistics, as in the previous section, does not adequately measure the effect of the bargaining regime on wage structure. Indeed, differences in characteristics between the two regimes may bias results. Therefore, in order to estimate the 'pure' effect of the bargaining regime, we must control for the differences in characteristics, using a more complex estimation procedure. In the remainder of this section we present a non-technical explanation of our estimation procedure. The equations are given in the technical appendix.

The bargaining regime has an effect on the wage structure because there are differences in the monetary return of firms' and workers' characteristics between the two regimes. For example, industry wage rates are generally independent of the size of the firm. On the other hand, many studies have shown there to be a correlation between actual wages and company size. Hence, there would be larger wage differentials between firms of different sizes (in economic terms: a higher return to firm size) among those covered by a single-employer agreement than among those that pay the sectoral rate. This will affect the wage structure: larger wage differentials between firms contribute to a larger dispersion of wages.

Therefore, we base our measurements of the wage structure effects of the bargaining regime on the differences in returns to firms' and workers' characteristics between the two regimes. We estimate separate wage equations by bargaining regime in order to obtain estimates of the returns of several characteristics for each. Those characteristics are: seniority (in years), potential experience (years since completing education), level of education (in years), gender, types of employment contract (fixed/unlimited, full/part-time), whether a worker supervises the work of co-workers, shift, night or weekend working, overtime working, occupation (ISCO two-digit category), firm size (number of employees in the establishment), form of financial control (private, semi-private, public), region of the establishment and industry affiliation (NACE rev.1, two-digit category). Those estimates are used to compute an estimation of:

• the difference in average wages between the two regimes;

• the difference in the standard deviation of wages between the two regimes; • the difference in inter-decile (90-10, 90-50 and 50-10) wage differentials between the two regimes.

Wage Equations

We begin by analysing the results of the wage equations estimated separately for workers covered by single-employer and by multi-employer bargaining. The large R 2 indicates that the variables used in the estimation explain the determination of wages to a great extent, and the signs of the coefficients are in line with theoretical expectations. More interesting are the differences in coefficients between the two regimes. Among human capital variables, only the return to potential experience exhibits no significant difference between the two regimes for any of the three countries. The return to seniority is smaller under singleemployer agreements in Belgium and Spain (by respectively 0.2 and 0.4 percent). But it is larger by 0.8 percent under single-employer agreements in Denmark. This is in line with the study by [START_REF] Bingley | Returns to Tenure: Firm and Worker Heterogeneity[END_REF], who found that the return to tenure has increased since bargaining decentralization began in the 1990s. Their explanation is that tenure was very low in Denmark, compared to the other OECD countries. 6 Employers have taken the opportunity afforded by a more decentralized system to raise the return to tenure in order to increase the attachment of workers to their firms. Decentralized bargaining seems to reward better human capital characteristics in Belgium and Denmark, as shown by the difference in the coefficient of years of education. The difference is not statistically significant in Spain. The wage penalty for female workers is smaller (by two percent) under single-employer agreements in Spain, where the gender wage gap under multi-employer bargaining is very wide (20 percent, compared to 16 percent in Belgium and nine percent in Denmark), so unions may want to close this gap through single employer agreement. Singleemployer agreements increase the gender wage gap in Denmark (by one percent), but the gap under this regime is still lower than in the two other countries. The difference is not statistically significant in Belgium.

An analysis of the effects of the bargaining regimes on wage differentials between occupations reveals interesting results. The occupation of reference is 'machine operators and assemblers', the largest blue-collar group. In Denmark, 12 occupations increase their position relative to the reference when there is a single-employer agreement in addition to the sectoral agreement. Most of these are white-collar, and eight were already better paid than the reference when only a multi-employer agreement was in place. Conversely, two of the three occupational groups whose positions worsened under a single-employer agreement are blue-collar. Hence it seems that, in Denmark, single-employer agreements widen the interoccupation wage differentials and mostly benefit white-collar workers. In Spain, by contrast, single-employer agreements seem to reduce the differentials between occupations: the three groups that have a better position under single-employer agreements are paid less than or equal to the reference under multi-employer agreements. Conversely, the four groups that have a worse position under single-employer agreements are better paid than the reference under multi-employer agreements; three of these are white-collar. This may be explained by trade union efforts in company bargaining to increase the relative wages of their members who are traditionally low-paid and unskilled. Surprisingly, it seems that in Belgium also, singleemployer agreements reduce wage differentials between occupations. Five out of the six groups that have improved their position by being covered by a single-employer agreement in addition to the sectoral agreement were paid less than the reference under multi-employer agreements. The opposite is true for the two groups that have worsened their position.

The return to firm size is larger under single-employer agreements in Belgium and in Denmark. This indicates for those two countries that firm-specific characteristics (at least size) are better taken into account under single-employer agreements. The fact that the reverse is found in Spain may be a sign of the union policy of wage standardization between firms. Finally, we observe that in Spain, the wage penalty relative to the reference region 'East' is larger under multi-employer agreements than under single-employer agreements in four regions. The difference is not statistically significant for the two other regions. So regional wage differentials seem to be larger under multi-employer than under singleemployer agreements in Spain. This may be explained by the fact that multi-employer agreements are often regional or provincial, while singleemployer agreements may cover large firms that have establishments in different regions, thus setting the same wages for the different regional establishments.

Effect of the Bargaining Regime on Wage Levels

Table 1 shows that wages are on average higher under single-employer agreements, even if we control for differences in observed characteristics. The wage differentials are around four percent without statistically significant differences between the countries. This result is not surprising for Belgium and Denmark because single-employer agreements can only increase the wages set at higher levels. It is in the range of previous findings for multi-level bargaining systems: 4.4 and 7.5 percent respectively for blueand white-collar workers in Italy (Dell'Aringa and Lucifora, 1994a), 0.5 percent in the Netherlands [START_REF] Hartog | Wages and the Bargaining Regime in a Corporatist Setting: The Netherlands[END_REF], 5.1 percent in Belgium [START_REF] Rycx | Industry Wage Differentials and the Bargaining Regime in a Corporatist Country[END_REF] and 1.6 percent in Portugal [START_REF] Cardoso | Bargained Wages, Wage Drift and the Design of the Wage Setting System[END_REF]. In Spain, because company agreements are not constrained by sectoral agreements, this result may be due to stronger union bargaining power in companies covered by a company agreement. It is line with the wage differential of five percent found by [START_REF] Palenzuela | Wage Drift in Collective Bargaining at the Firm Level: Evidence From Spain[END_REF].

Effect of the Bargaining Regime on Wage Dispersion

Our estimations show (Table 2) that, other things being equal, singleemployer agreements increase the standard deviation of wages in Denmark by 0.022 relative to multi-employer agreements. In Belgium, single-employer agreements increase the standard deviation by 0.004. In Spain, by contrast, the standard deviation is smaller by 0.027 under singleemployer agreements. Similar results are found when we analyse the effect of the bargaining regime on the 90-10 percentile wage differential. Controlling for differences in characteristics, single-employer agreements increase this differential by 0.022 and 0.083 respectively in Belgium and in Denmark, but reduce it by 0.077 in Spain. The comparison of the effect of the bargaining regime on the 50-10 and on the 90-50 percentile differentials shows that, in Denmark, this effect is similar (0.042) in the lower and in the upper parts of the wage distribution. In Belgium, the increase in wage dispersion is only due to an increase (0.023) in the upper half of the wage distribution. Company agreements in fact very slightly reduce (by 0.001) the wage dispersion in the lower half. In Spain, almost all the reduction in wage dispersion takes place in the lower half of the wage distribution (0.071 in the lower part and 0.005 in the upper part). This may mean that the wage gains from coverage by a single-employer agreement benefit most particularly the workers whose wages are below the median, which, again, may be attributed to trade union policy.

To sum up, single-employer agreements, as compared with multiemployer agreements, increase wage dispersion in Denmark and Belgium and reduce it in Spain. The effects are very small in Belgium. In relative terms, single-employer agreements increase the standard deviation of wages by one percent and the 90-10 percentile wage differential by three percent. The effects are greater in Denmark and in Spain. In the former, single-employer agreements increase the standard deviation by seven percent and the 90-10 percentile differential by 12 percent. In the latter, singleemployer agreements reduce the standard deviation by six percent and the 90-10 percentile differential by seven percent. The more limited effects in Belgium may be due to the fact that opposing forces cancel each other out. Firm size and education, for instance, have higher returns under company agreements, while the opposite occurs for tenure and occupation. Another explanation is strict government control over wage-setting since 1981, limiting wage cost increases. The automatic indexation of wages and multiemployer wage increases already account for a substantial part of the authorized wage increase (from 1983 to 1986, no other increases were authorized). So the small difference in wage dispersion between single-and multi-employer agreements can be explained by the fact that Belgian firms have little freedom for their wage policies.

Conclusion

This article has examined the effect of the bargaining regime on the wage structure in Belgium, Denmark and Spain, using a harmonized matched employer-employee dataset. In all three countries most workers, irrespective of their union status, are covered by a multi-employer agreement. In Belgium and Denmark, multi-employer agreements set industry or national standards for specified categories of workers that are defined on the basis of a limited number of criteria such age, experience and occupation. Bargaining at company level may then increase wages above the sectoral standard. Our estimations show that in both countries, both the level and the dispersion of wages are higher for workers covered by singleemployer agreements, compared to workers covered only by multiemployer agreements. This reflects the fact that single-employer agreements cannot set lower wages than agreements at the higher level. The increase in wage dispersion may come from two sources. First, company agreements may increase inter-firm wage differentials because they take into account firm specificities which are not among the criteria that define multiemployer standards. The comparison of wage equation coefficients between the two regimes does indeed show that firm size has a greater effect on wages under single-employer agreements. For Belgium, our results are in line with [START_REF] Rycx | Industry Wage Differentials and the Bargaining Regime in a Corporatist Country[END_REF], who finds a larger dispersion of inter-industry wage differentials for firms covered by a company agreement. Second, a company agreement may increase the within-firm wage dispersion, because many single-employer agreements signed since the decentralization trend in the 1990s have been initiated by employers in order to introduce more pay flexibility and wider differentials in their firms. From the comparison of wage equation estimates, we find larger differentials between workers with a different tenure, education level, occupation and gender under singleemployer agreements in Denmark. This may be linked to the generalized practice of 'pay-sum' bargaining, where only the aggregate increase at firm-level is determined by collective bargaining and its allocation among workers is left to the employer. For Belgium, the effect on the within-firm dispersion is uncertain: although single-employer agreements increase the return to education, they also reduce the return to tenure and the wage differentials between occupations.

In Spain, single-employer agreements constitute a bargaining regime independent of industry agreements. Following the 'no competition' principle, the two regimes deal with the same types of subject and there is no division of responsibility between them. Therefore, single-employer agreements may set wages above or below industry standards. By contrast with Belgium and Denmark where many company agreements are initiated by the employer, the majority of single-employer agreements in Spain are initiated by works councils or trade union delegations: average union density in firms covered by a single-employer agreement is much greater than in firms covered by an industry agreement. Multi-employer agreements are also less binding on companies than single-employer agreements. Therefore, the differences in wage structure between the two bargaining regimes resemble the differences between the union and non-union sectors in Anglo-Saxon countries. Higher wages and lower wage dispersion are found under company bargaining. The lower wage dispersion seems to result from a reduction in the wage dispersion both within and between firms. Comparison of wage equation coefficients between the two regimes indeed shows lower wage differentials between occupations, gender, tenure and firm size under the firm agreement regime. The regional dimension of collective bargaining may constitute a complementary explanation to this compression effect. Industry agreements have, on the whole, local (regional or provincial) scope in Spain, while a company agreement may apply to establishments in different regions or provinces. We do indeed observe that the regional coefficients in the firm agreement wage equation are lower than in the industry agreement wage equation. Our results confirm and complete the findings of [START_REF] Dominguez | Collective Bargaining and Within-firm Wage Dispersion in Spain[END_REF] who find that company agreements compress the within-firm wage dispersion in Spain.

We conclude that single-employer agreements are mainly used in Denmark and Belgium to adapt pay to the specificities of the firm and to local economic conditions. In Spain, they are mainly used by unions to raise wages and to compress the wage distribution. Note that this does not imply that, in Spain, the industry wage rates are more dispersed than the wages set by single-employer agreements. It may be that, because of the less binding nature of sectoral agreements, firms covered by these have more freedom to set wages and, because unions are weak in these firms, can impose a very dispersed wage structure. It would be interesting to see if results would be different with data on negotiated rates of pay rather than actual pay.

Future research concerning the effect of the bargaining regime on the wage structure should control for a potential selectivity effect, that is, for the fact that firms or workers in a particular bargaining regime might not be representative of the overall sample. However, as pointed out by Hartog et al. (1997: 7), this will remain a very difficult task 'as long as no (satisfactory) independent variables to control for the endogeneity of the bargaining regime are available'.

Plasman et al.: Wages and the Bargaining Regime under Multi-level Bargaining 171 TABLE 1. Average Log Wage Differential between Single-employer and Multi-Employer Agreements (Standard Errors in Parentheses)

	Belgium	Denmark	Spain
	0.041***	0.031***	0.041***
	(0.006)	(0.003)	(0.006)
	* pϽ0.10; **pϽ0.05; *** pϽ0.001.
	Source: ESES 1995.

TABLE 2 . Impact of the Bargaining Regime on Several Indicators of Wage Dispersion

 2

	P90-P50	Belgium Denmark Spain	0.495 0.500 0.544		0.511 0.407 0.716		Ϫ0.016 0.094 Ϫ0.172		Ϫ0.039 0.052 Ϫ0.166		0.020 0.066 0.014		0.003 Ϫ0.024 Ϫ0.020		0.023 0.042 Ϫ0.005
	Standard deviation P90-P10 P50-P10	Belgium Denmark Spain Belgium Denmark Spain Belgium Denmark Spain	0.340 0.328 0.448 0.831 0.800 1.062 0.336 0.300 0.5178		0.341 0.298 0.491 0.806 0.680 1.173 0.295 0.273 0.4571		Ϫ0.001 0.030 Ϫ0.043 0.025 0.120 Ϫ0.111 0.041 0.027 0.061		Ϫ0.005 0.007 Ϫ0.016 0.004 0.037 Ϫ0.035 0.042 Ϫ0.015 0.132		0.002 0.037 Ϫ0.021 0.014 0.116 Ϫ0.065 Ϫ0.007 0.050 Ϫ0.079		0.002 Ϫ0.015 Ϫ0.006 0.008 Ϫ0.033 Ϫ0.012 0.006 Ϫ0.008 0.008		0.004 0.022 Ϫ0.027 0.022 0.083 Ϫ0.077 Ϫ0.001 0.042 Ϫ0.071
			1. Single-employer	agreement (SE)	2. Multi-employer	agreement (ME)	3. Raw difference	(1-2)	4. Difference due	to X	5. Difference	due to ␤	6. Difference	due to residuals	7. Net difference	(5ϩ6)	Source: ESES 1995.

European Journal of Industrial Relations 13(2)

ACKNOWLEDGEMENTS

This article has evolved form earlier drafts presented at workshops in Mannheim (LoWER annual conference 2005), San Francisco (SOLE/EALE 2nd world conference) and Brussels (DULBEA). We thank all seminar participants and more particularly Michael Burda, Claudio Lucifora and Fernando Valdès Dal-Ré for their comments and suggestions. We also thank the two anonymous reviewers and Richard Hyman for their useful comments. This article is produced as a part of a TSER program on Pay Inequalities and Economic Performance (PIEP) financed by the European Commission (Contract No HPSE-CT-1999-00 040).

NOTES

1 We thank an anonymous referee for this information. 2 This implies that average union density in firms covered by an industry agreement is only seven percent. 3 It includes all economic activities falling within NACE Rev. 1 categories C to K. 4 We thank one of the referees for highlighting this problem. 5 Complete descriptive statistics and wage equations are available in [START_REF] Plasman | Wages and the Bargaining Regime under Multi-Level Bargaining: Belgium, Denmark and Spain[END_REF]. 6 With an average tenure of 7.9 years, Denmark is on a level with the Anglo-Saxon countries. It is also among the countries with the lowest fraction of those with more than 10 years of tenure [START_REF] Bingley | Returns to Tenure: Firm and Worker Heterogeneity[END_REF].

TECHNICAL APPENDIX

Wage Equations by Bargaining Regime

W i is the wage of the ith worker in each bargaining regime (single-employer bargaining (SE) and multi-employer bargaining (ME)). X is a vector of worker, firm and job characteristics. ␤ is the vector of the coefficients (i.e. the returns of the characteristics) to be estimated and e i is the error term. Those wage equations are estimated by ordinary least squares with [START_REF] White | A Heteroscedasticity Consistent Covariance Matrix Estimator and a Direct Test for Heteroscedasticity[END_REF] heteroscedasticity consistent standard errors.

Difference in Mean Wages between the Two Regimes

(3)

X

ᎏ SE and X ᎏ ME are the vectors of mean characteristics respectively across the SE and the ME workers. The first component on the right-hand side of the equation is the difference in mean wages that is due to differences in observed characteristics between the two regimes. The second component is the difference in mean wages that is due to differences in the wage equations coefficients between the two regimes. Following [START_REF] Stewart | Collective Bargaining Arrangements, Closed Shops and Relative Pay[END_REF], we consider this last component as the effect of the bargaining regime on average wages. Said differently, it measures the impact on the average wage of the differences in the returns of observed firms' and workers' characteristics between the two regimes. Standard errors from [START_REF] Stewart | Collective Bargaining Arrangements, Closed Shops and Relative Pay[END_REF] are used for the statistical inferences.

Difference in Wage Dispersion between the Two Regimes

In order to estimate the effect of the bargaining regime on the wage dispersion, we use the method of [START_REF] Juhn | Wage Inequality and the Rise in Returns to Skills[END_REF]. This method consists in constructing wage counterfactuals for each individual, and then computing distributional

statistics from the counterfactual wage distributions obtained. First, we must express equations ( 1) and (2) in the following forms:

where

and F ME Ϫ1 are the inverse of the cumulative distribution of the residuals respectively in the SE and in the ME sample; i is the rank of the residual of the i th individual in the residual distribution. Then, we construct two types of counterfactual wages for each SE worker:

is the log wage of the SE workers if they were remunerated like the ME workers and is obtained by using the coefficients from the earnings equation estimated in ME sample; ln W i SE(2) is the log wage of the SE workers if, in addition, their residuals were distributed as for the ME workers. Once we have these four log wage distributions (ln W ME ; ln W ME ; ln W SE(1) ; ln W SE(2) ), we can construct distributional statistics for each of them. Consider the statistics G (e.g. G ϭ standard deviation, P90-P10, P50-P10 or P90-P50). The difference in G between SE and ME may be decomposed into three components:

The first component on the right-hand side of the equation is the difference in G due to differences in observed and unobserved characteristics (it corresponds to row 4 in table 2); the second is the difference in G due to differences in wage equation coefficients, i.e. the difference in the returns of the observed characteristics (row 5); the third is the difference in G due to differences in the returns of unobserved characteristics (row 6). We define the effect of the bargaining regime on G as the sum of the two last components, so the difference in G that is due to differences in the returns of observed and unobserved characteristics (row 7). We estimate the effect of the bargaining regime on the standard deviation, the 90-10, the 90-50 and the 50-10 percentile differentials.

ROBERT PLASMAN is