Economic uncertainty and working class organization: The rise of works councils in post-war France

This study examines why French works councils---firm-level bodies that represent workers and possess rights of information, consulation and co-management---came to be used and empowered. The puzzle is motivated by the fact that, before workers embraced them, works councils remained dormant and neglected for two decades after their introduction. This pattern is seen throughout Western Europe, where works councils were introduced, ignored and then embraced in the same historical moments across states.; The causes behind their use and empowerment are found in the increasing economic uncertainty that resulted from changes in macroeconomic regulation: (i) the collapse of Bretton Woods, the public management of exchange rates, and (ii) the switch from Keynesianism to monetarism.; As the economy became more volatile, workers and management became more likely to confront contingencies that had not been anticipated by the collective contract. They consequently developed an interest in an institution that could renegotiate terms of exchange as surprises are confronted. Works councils are an institution which can effectively do so. Their access to information otherwise available only to management made them an effective organization for pursuing workers interests. Furthermore, as this uncertainty was and is experienced as one in which agents expect that better predictive information will come with time, firms developed practices that allow them to keep options open as long as possible. In this context the power of works councils to impose delays in decision making through their share of residual rights (inputs about what to do) becomes a source of strategic power. This dynamic is shown also to have obtained in the Netherlands and Italy as well. The exceptional instance of Germany is explained within this framework.; Finally, as the ways in which interests are best realized become prone to fluctuations, works councils become an element in an overlapping system of worker representation. Different organizations of workers become connected within a larger network of representative bodies. The exchange of information about and deliberation over needs, capacities and strategies helps to preserve the effectiveness of the labor movement.