Explaining Failures of Social Dialogue Building in Eastern Europe

The paper argues that a lack of the positive impact of European and national policy measures in strengthening social dialogue in CEE countries can be linked to strong grounding assumptions that overestimated the power of European and national political actors to establish strong and functioning social dialogue institutions and underestimated social partners’ motivation to engage in social dialogue. The paper adopts a comparative political economy perspective and empirically focuses on structurally shaped motivation of enterprises to engage in multi-employer bargaining in the Baltic countries. It finds that Baltic growth regimes have recently become strongly export-driven suggesting that coordinated wage-setting could have also become increasingly compatible with the enterprises’ interests in improving the competitiveness of exports. However, it is not a component of the current business strategies of Baltic manufacturing enterprises. Instead, enterprises rely on ‘price taker’ strategies that, coupled with low-skill, low value-added production and cheap labour, take advantage of favourable market opportunities but not of competitiveness improvements via cooperation and coordination at the intra- or inter-sectorial level. Therefore, it is concluded, these strategies are not complementary with social dialogue institutions.