National response strategies to transnational challenges: The Austrian, French, and German re-regulation of the liberalization of service provision in the European Union wage

This dissertation examines national response strategies to the liberalization of service provision in the European Union (EU) implemented by Austria, France, and Germany, with additional discussion of developments in all northern European countries. Drawing on the literature on neo-institutionalism and neo-corporatism, the study assesses the role of trade unions and employers' associations, their relative organizational configuration, and their preferences for a national re-regulation. The liberalization of service provision affords companies in service sectors, particularly the construction sector, to outsource production to subcontractors from lower wage EU member states. Efforts to create a Single Market thus clash with national regulatory authority and undermine nation-state's authority over regulating (labor) market access. However, nation-states may devise re-regulatory national response strategies. Different national “models” of macroeconomic governance generate divergent response patterns in the face of externally imposed economic liberalization depending on the relative organizational power and institutional configuration of relevant labor market interest associations. Hypotheses for their preferences are derived from the historical and rational choice institutionalist approach. Strongly neocorporatist and statist France both generate comprehensive and protectionist re-regulations, while intermediate neocorporatist Germany produces a liberal re-regulation instituting a wage differential between standard wages. Suboptimal response strategies may produce migration incentives, which can jeopardize existing wage-setting mechanisms. Analyzing these responses permits a more general prediction about various national models' capacity to cope with the pressures of Europeanization. Bridging the gap between comparative politics and international political economy and based on extensive fieldwork in all three countries, the dissertation contributes to current theoretical debates on issues such as neo-institutionalism, neocorporatism, convergence, globalization and national models.