Anke Hassel is professor of public policy at the Hertie School of Governance in Berlin, Germany. Prior to that she was professor of sociology at the International University Bremen, senior researcher at the Max Planck Institute for the Study of Societies and spent a year in the planning division of Germany’s federal Ministry of Economics and Labour.

• Table of Contents - 8 Figures and Tables - 10 Preface - 12 1 The Political Economy of Adjustment in Europe - 16 The limits of neo-corporatist analysis - 23 The approach of this book - 27 Methodological issues - 33 Conclusion - 36 2 Governments and Wages – A Theoretical Framework - 38 Policies on wages - 39 Monetary and wage bargaining regimes in the political economy literature - 47 Explaining policy choices - 58 Conclusion - 61 3 Policy Options and Institutions: How Governments Respond - 62 Policy options towards the redistributional power of trade unions: market responses and negotiations - 63 The operationalization of variables - 72 The relationship between institutional and political accommodation - 82 Conclusion - 88 4 Striving for Conservatism: The Shift in Monetary Regimes - 92 Credibility and the inflation bias - 93 European monetary integration as a tool for achieving central bank conservatism - 96 Central bank independence, monetary policy and government intervention - 111 Government intervention to foster monetary conservatism - 119 5 The Politics of Government Intervention - 122 Institutional constraints on governments - 124 The shared roots of consensus democracy and corporatist responses: the political fragmentation of trade unions and the role of union-party relations - 133 The role of partisanship - 144 Conclusion: Negotiated adjustment and the role of political institutions - 150 6 The Responsiveness of Wage Bargaining Institutions - 152 Theoretical assumptions about wage flexibility and the role of wage bargaining institutions - 154 Priorities of trade unions between employment and real wage protection in wage bargaining - an empirical measure - 158 The institutional basis of wage responsiveness - 165 Conclusion: Shifting workers’ wage expectations - 182 7 The Interaction between Wage Bargaining Institutions and Government Intervention - 188 The responsive wage bargaining regimes: Germany and Austria - 189 The non-responsive corporatist countries - 197 Adjustment of wage expectations in the non-corporatist countries with non-responsive wage bargaining regimes - 212 Conclusion: A comparative view on the dynamic between wage bargaining institutions and government intervention - 230 8 Negotiated Adjustment – A European Approach - 234 Policy options towards trade unions’ redistributional power - 236 The interaction of institutions and policies - 242 The nature of negotiated adjustment: Reinforcing mechanisms of trade union incorporation - 245 The German role model - 247 The United Kingdom as the European exception - 250 Outlook: Implications for adjustment under EMU - 252 Appendices - 256 Appendix to chapter 3 - 256 Appendix to chapter 5 - 258 Appendix to chapter 6 - 261 Notes - 274 Bibliography - 290 Index of Names - 318 Index of Subjects - 324