In recent years “social pacts,” or tripartite agreements between governments, unions, and employers, have reemerged as a crucial political institution for the formulation of economic and social policy reforms (Fejertag and Pochet 1997, 2000; Regini 2000; Traxler 2000; Hassel 1999; Ebbinghaus and Hassel 2000; Berger and Compston 2002). In many economies these new social pacts continue the existing tradition of corporatist consultation and negotiation. In The Netherlands, a recent agreement signed by the government and unions entitled “the New Course” follows the reform trajectory initiated by the pathbreaking Wassenaar Accord of 1982 (Hemerjick, Van der Meer, and Visser 2000; Visser and Hemerjick 1997). In both Denmark and Norway, policy makers have initiated a series of negotiations with their social partners explicitly linking changes in social policies to guarantees of wage restraint by the labor movement (Lind 1997). Following the electoral victory of the Social Democratic Party in March 1995, Finnish social partners accepted the terms of a centralized agreement involving the moderation of wage demands in exchange for tax reforms (Kiander 1997: 139). And immediately after assuming power, the Red-Green coalition government in Germany reinitiated tripartite discussions with unions and employers as part of the “Alliance for Jobs” (Bispinck 1997; Bispinck and Schulten 2000).

Social pacts are playing a prominent role even in economies whose governments have a weak history of cooperation and consultation with trade unions. In these cases, a series of far-reaching reforms of wage bargaining institutions has attempted to create the necessary preconditions for new political exchanges.