Research Proposal

CEU eTD Collection In partial fulfillmentof the requirements for the degree of Master of Arts in Political Science Fighting the decline: union strategies for survival in Romania and Poland Supervisor: Prof. BelaGreskovits Department of Political Science Political of Department Central European University Central European Adascalitei Adascalitei Dragos Submitted to Submitted June 2011 By CEU eTD Collection 2000-2003 negotiations2000-2003 Labor for the Code. Romanian laborsucceeded its in keeping strength. relative This is revealed especiallyby the actbe and unableto seemed Polishperiod the laborto organize while, against all odds, protest and density than other states in ECEand Initially, differences. displayedhigherrates of inboth labor participation, countries countries. similarities However, their of because both bystrength labor the for a case end making for of the chosen were transition Poland and preserve by its status mobilization, strategic participation and broadening solidarity. Romania members. Therefore, the main premise in new attracting of union’s and workplace atthe strategies innovative coalitions, politics this paper is that labor seeks to improvecountries. Instead,itproposes a strategic or interaction byfocusingexplanation on the at least ECE in strength labor the in variation for account to fail they that argues and models these of power explanatory the contests thesis This differences. than rather cases among However, similarities for explaining areskewed theories. path-dependency these explanations Labor weakness in Central and Eastern Europe has been most of the times explained by using Abstract i CEU eTD Collection ILORPY...... 61 BIBLIOGRAPHY...... 59 CONCLUSION...... 49 CHAPTER 3...... 20 CHAPTER 2...... 4 CHAPTER 1...... 1 RESEARCH OUTLINE...... 3.3. Explaining the absence 57 of Social Pacts in Poland...... 3.2. Explaining 53 the outcomes of the Romanian ...... Social Pacts 3.1. Left wing 49 comes to power...... 2.4. State capacity 41 and workplace ...... coalitions 2.3. Privatization 32 and the available ...... choices for labor 2.2. Between bipartism 26 and tripartism...... 2.1. The overthrow of socialism 20 and the initial conditions ...... for labor 15 1.4. Theoretical ...... Considerations 11 1.3. Case selection...... 1.2. Dismantling 8 the legacy argument...... 4 1.1. Introduction...... Tableof Contents ii CEU eTD Collection Figure3: Social by receipts protection (%of type total contributions) Romania………….....54 Figure2: State Capacity in Romania andPoland(1996-2009)……………………………….43 Table 5: Private sector share of the GDP 42 in Poland and Romania...... Table 4: Budgetary subsidies to Firms, 1992 and 38 1994 (shares of GDP...... Figure1: Large Scale Privatization in andRomania Poland (1989-2010)…………………....35 Table 3: Labour Disputes: Working 24 Days Lost per 1,000 Employees...... 22 ...... membership Table 2: Most important confederations in Romania by the year of 15 establishment and ...... 2006) Table 1: Trade Union Density and Welfare StateExpenditurein Romania andPoland (1997- List of TablesFigures and iii CEU eTD Collection worker’s grievances and brought them in attention the of governments either protests through as main voiced examples. They standout right provisions the and toorganizewelfare delivering ismatters andtheyhaveinfluence. Whattrade unionsbeen survived of that capable without any influencesubstantive on policiesthe which workers.affected organizations formal being only They upas ended neoliberal project. the alternative to come the unions actors, an upwith to failed by other competition. Marginalized the recession deepened thiscrisis massiveand produced membership fragmentation losses, and inter-union transitional The organizations. formal merely into succumbed and system capitalist history of being extensions of the socialist parties they failed to adapt to the conditions of the unions occupied onlyamarginal transitionthe position thought Limitedperiod. bytheir brings literature trade the contradictory evidence that claims.supports Thepath dependency explain to labor during thepost-communist position of it the argueand transition that labor is indeed weak why governments stilldo seek its support? confined bythe type of whichisanalysis explain employed to its position? Andfinally, if two countries? Is labor indeed inlabor the explains are:Whatstrength between whichIask 2004. Thequestions 1990and a weak social and politicaladdress labor ambiguity this positionabout bylookingcases: attwo Romania andPoland actor or is it thatagreement on whether labor is indeedits weak and what this weakness actuallyweakness is. In this thesis I is weakness. determines this andwhat Yet social actor reached an hasnot literature the The strategic interaction literature provides a more optimistic description of labor’s of description optimistic amore provides literature interaction The strategic context. puts Ireviewchapter into The first questions literature whichseeks these the Numerous studies on Central European labor sought to explain why labor is a weak is a labor why explain to sought labor European Central on studies Numerous some benefits to workers. Improved working benefitslegal better to conditions, provisions, RESEARCH OUTLINE 1 CEU eTD Collection to avoid involvementin the process, union unions privatization responded bymobilizing tried government the When enterprises. owned state the of privatization the for negotiations leverage inbargaining with governmentthe andsecured them an position in advantageous defend workplace. them atthe This gave their positions wasto unions duringtransition with rankandthe file. ties their and base membership their weakened which politics level national the on focused By process. their Polish unions gaveupon comparison, workplaceinfluenceand exclusively theprivatization andslow down state from the rents extract to workplace atthe influence and wage pressure.They byintensegoals of constant mobilization workers used their their achieved unions Romanian the However, movement. labor the control to governments of hands in the tools as merely functioned institutions tripartite the level national the at cases both In arena. political post-communist in the a place themselves for securing in successful were they extent what to and plans privatization the influenced they how process, transition socialism,role unions of trade they state in during what resources had the beginning of the the discuss will I Here communism. of fall the since in power shift first the with countries in countries two (Romania 1989–1996,Poland1989 -1994). This period overlaps inboth transition. of period second inthe path divergent their and similarities initial their of because Poland, and Romania casesdefend been to havetwo able transition. resourceswhichunions the Ichose during transition. I put forward made transition must legacythe both consider unionsthe during and thechoices they of an explanation which relies on the coalitions at negotiations bodies. insideor through tripartite the the workplace and Further I explain that the most important mostFurther the Iexplain strategic Romanian madeby that choice the regime communist the of overthrow the and phase initial the with deal will 2 Chapter I challenge these explanations and argue that a full account of labor’ position in 2 CEU eTD Collection workers andworkers additional commitments from government. the proof of union power because of they led to higher welfare expenditure, more rights for area pacts social Romanian the argue that I workers. for the services improve social to and legislation labor the change to agreements, collective of coverage and benefits wage increase pressures the government signed three social which itthrough itselfcommitted pacts to: international tothe torespond In order managers. and of unions the coalesced interests metreform from but government process had speed upthe opposition privatization the and to pressured bytheinternational financial institutions and European Union, Romanian the Romanian social pactswhich beginningemerged intheof 2000’s.the In terms, general union better coverage. A 2004) 2002 and three(2001, paidto the attention be will special inmembership and position rates This reflected secured abetter duringhigher transition. was companies. Privatization in adopted 1996 which limited union’s influence over faith the of their history of the in the moments key Two interests. insider’s Polish account into taking without privatized were privatization are the 90’s the influence owned wasreducedthroughout unions.the enterprises Employee andstate Enterprise Pact adoptedcomparison thePolishhad governmentunilaterally the power to pursue reforms anddisregard in 1993 and the to pursuepolicy byitselfLawreforms breakand influence the union at theworkplace. By on resignationled strike tothe of Radu the Vasile government. strike resulted inthe resignation Romanof Petre the andingovernment 1999 the miner’s confederations wouldnationwide for call stoppages. In strikes and work 1991 the nationwide andlaunching If stoppages. workers demandswork benot their would met, themajor Romanian Chapter 3argues by comparison with counterparts, unions their Polish that have thecapacity not did Romanian government the arguesthat section The following 3 CEU eTD Collection “return to capitalism” was synonymous with the decline of the large state enterprises enterprises large the and the state decline of the with synonymous capitalism” was to “return Industrial requiredrestructuring reduction the and reorganization labor the of force. The unions. trade of powerful for existence the favorable not was conditions newthe economic with andimpactthe of to capitalism.major started road structures handicapthe a Likewise, Communist werelow period even by European East standards 2006). (Pilat socialism. throughout itis notby Therefore thatprotestlevelschance inRomania during the Party and hadno ideological alternatives as no opposition movement emerged in Romania was moreeven under-developed:it hadfully aprecarious organization, by the dominated andforworkers disseminatingparty. theof ideology the Within Romanian labor this context, Solidarity movementin unions Poland, trade wereonly instruments used for controlling normally belts” of communist “transmission the With wereonly parties. exception of the A theme of studies recurrent difficulty these was the legitimizingof organizations which unions1997). and1999, trade intheearly (Petkov 1991;Pollert transition phases of Thirkell trade unions emergedindependent and askeyactors to represent defend interests. worker’s interest wasindependent groups a necessary for precondition successful reforms. In particular freeand of development the respect, this In transition. socio-cultural and political economic, an through goat the sametime hadto communism.CEE countries Offe (1997)arguesthat of fall the after emerged which problems social the of thecore touch as they democracy to transition” “triple of the in context the (CEE).Theyarepertinent Europe Eastern Central and Union movement limited was byits identity thus legacy andown problems its of old inAcademicof union movement accounts the facedCEE emphasized the by problems in debates ofacademic the very the center at been often have relations Employment 1.1. Introduction CHAPTER 1 4 CEU eTD Collection later on the scene (Kohl scene onthe later 2008). (Kohl determined themode the of distribution clearly unionsdisadvantaged which which arrived property.first council example,For ininelection Hungarytheresultsthe works of 1992also made it union Second, former difficultunions the distribute (15and3respectively). trade to newcreate to few numberof workers avery lawrequired CzechRepublic the or Romania resources among unions even within the same branchor samethe company. Incaseslike and members for competition fierce to led it first problems: of series a with came pluralism survive Romania managedwith and newly to the formed However, compete unions. Despite hugelosses in some membership unions suchasOPZZinPoland old andCNSLRin dismantled and new organizations were built as an newenvironment. the to adapt expression of the democraticassociations. Still,moresurvive,managed unions allagainst obstacles and even to trade these sentiment. in managements,organized employers’ profit-oriented and confront from state the autonomy to voluntary associations of employees and on representationthe level they had assertto their polities; on organizationalthe level hadthey toshiftfrom of mandatory groups membership of democratic asactors themselves legitimize image and their andcreate re-create to hadthey negatively unionaffected membership levels. andmarginalization. In addition, large and the informal a still sector hefty sector agricultural poverty to unemployed the sentenced nets socialsafety Thelackadequate of sectors. obsolete in the unemployment massive generated it overall but countries across uneven was transition for Mutual Council the to whichweretied for economies the especially production, national of collapse Economic Assistance (CMEA). In social terms the impact of the economic Further, in the early stages of transition the institutional context remained mostly remained context institutional the transition of stages early in the Further, were monolithic unions Old region. the across unions developed New forms of trade level identity on the change of paradigm: unions facedacomplete trade Therefore 5 CEU eTD Collection economic liberalism economic liberalism and weakenedwasbound once remain into weak future. the achieve to be weakenedinorder hadto Europe inEastern labor wasthat authors these grab votes from anddissatisfied workers triumphedin elections. The inevitable conclusion of wing conservative parties like parties Law ( wing Justice and conservative League of Polish Familiesleftlabor which, byilliberal captured alone, was organizations. such Extremist parties as The ( incorporatingof worker’s demands and developing classbasedidentities, elites gave upon identity lines. economic of the it of reforms bychannelingInstead the anger losers the across ConvincedOst 2001). a freerequires that marketelites movement aweakunion answered to and (Crowley change systemic down top a necessitated transition successful a since alienated of authors to conclude that for late-comers in the capitalist system labor needed to be which failedtocontrol rankandnational confederations file.the This madea second stream the transitional crisis as well as in the state sectors where welfare reforms were implemented. mostfollow they pattern: butbargaining affectedhigh in process are sectors another the by period. Interestingly, protest levels do not correlate with the institutionalization of the institutionalizelike bargaining transition the increased throughout andincases Romania they to the disconfirm hypothesis.this Transitioneffects withacross started CEEin protests awave of response data However, protest breakdown. a complete from system the sheltering and peace social of economic preserving the on crucial role tripartism playeda Iankovaprocess. that (2002)emphasizes policy the impact on noreal with mechanisms as consultation functioned arrangements reforms. tripartite Theso-called institutions. strong corporatist into translated not itwas countries underdeveloped. Although theidea “social partnership” emergedof inallpostcommunist The protests continued in spite of efforts to However, if this is the case we are left with some interesting puzzles to solve. If labor solve. If to puzzles leftHowever, interesting some are iswith if the case we this In this indeterminatecapturedIn byleftist by setting activism this wasnot parties union or Ligi polskich rodzin 6 ) and Self Defense ( Prawo i sprawiedliwo i Prawo Samoobrona Ğü ) picked upeasyto ) picked ) and right CEU eTD Collection necessary articulation between local between national necessary and (Crouch articulation 1993). power union but union’s tofocus organizations state andthe the lines attention centralized without along role of tripartism was not to guarantee a “general political exchange” between labor the Instead, 2000). neocorporatim” (Pollert of be appearance mistaken the shouldnot with Both of conditionslackedinThat’sthese Europe. Central why“the appearanceof tripartism whichsocial with partners. seek cooperation andgovernments unions (peakassociations), democracy raised problems of credibility and identification preference among actors. performance and output. However, the CEE cases donot fit this picture since the transition to preferences are rootedinterests in sound political relatively cleavagesas well. whichstable allow systems in well works 1983).Thuspluralism (Berger organizational threshold reach the to resources Similarly, the evaluationwhere actors of aresystems’definition of group goals ablecombined with the exclusion from the system of those with too fewpluralistto definenarrow the d) and jurisdictions organizational their overlapping and multiple c) members; over interests theories and identifycompetition and bargaining; b)other’s voluntary membership, hencecan weak organizational control be theories among differentiate above.Pluralist inter-group a)the illustrated questions applied in the casesunions donotmatter why are they still largestthe civil society institutions in Central Europe? were actor’s capacity surpass itsto divisions andinternal andconflicts reachconsensus? Finally,if trade the has labor which under conditions the are What cooperation? labor of instances witness unionsis still deadwhydotrade organize worker’sin interests CEE? we still Second, why do On hand, other the corporatism others, strong among andrequires involved labor to the answer provide acompelling to theories fail and pluralist neo-corporatist Both 7 CEU eTD Collection that governments can still implement different strategies which take into account national account into take which strategies different implement still can governments that by and arecountries a proof East European adopted strategies Central various privatization innovativefor (Stark decisions 1994,1996; Stark and2001). Bruszt1998, ForStark the arguments. Supporters of viewthis sustained path the dependentargument that leaves room processes which in prevailed society the they used tofunction. internally organizational usethesame they would unions, appearance of democratic predefinedin of locked. set which pathways they are Although simulate the they would the from depart to weak too endeavor, shallow a be only would unions new the of creation the Second, process. transformation the hamper will and values and identity their defend organizations, would be detrimental to the capitalist system. As relics of the past they would andassumptions”. expectations “set of a ofmind”particular“state produced institutions because a they and of capitalist democratic OffeFor socialist state institutions (1997) the are“inimical” the growth and to development itself. be and process undermine liberalization created the will haveto institutions ultimately socialist rule are not just a shadowpointedLijphart(1995) out that cultural the andinstitutional created structures under the of the past but shape the inenvironmentintroduced CEE hadtoface the longimpact and standingof legacies. Crawford historical in which the new identified. the argument, principles theneo-liberal version of strong the According to be can arguments these A of version arrangements. andaweak socialist defunct the strong of skeleton butthe void on in institutional created an were not systems capitalist European East the that is explanations these of assumption underlying The literature. dependency A less pessimistic account is offered by the weak version of the path dependency path the of version weak the by offered is account pessimistic A less This would the suggestthat old when unions, playing arole being other than formal The most compelling explanations for union strength in CEE cluster around the path the around cluster CEE in strength union for explanations compelling most The 1.2. Dismantling thelegacy argument 8 CEU eTD Collection Thus socialist legacies are “bad”, unions’ involvement in politics is “harmful” and transitional and “harmful” is in politics involvement unions’ “bad”, are legacies socialist Thus labor, decline post-communist of they aprescriptive union take position trade debate. the on it anewmission. became to articulate difficult wasdefeated enemy the once movements, as anticommunist built were in which Bulgaria Pdkrepa Poland or in Solidarity For unionscompete such as with marketnarrative. to free project the alternative an have not do they identity, new a “carve” they though Even unions. trade of power limits the ideological options range of itsnarrow many aspects. with At sametime the of the satisfied not are they while reform process support the to have becausethey “schizophrenic” capitalism.fileand their position towards wereunsureabout stopped deliveringmember’s uptotheir expectations.both Inaddition,elites and the rank form party.the Ideologically, faced they significantproblems legitimacy of because they obtained resources the distributed which welfareagencies associal and operated management operate established unions. which unionswould were asorganizations trade Institutionally the in an entirelylegaciesargues hadthat ideological aninstitutional impactonthe post-communistand an Crowley its(2004) requirements. to and reacting inof economy new acapitalist status acting differenttheir and parties socialist the for belts transmission as serve to purpose original their between politicalsocialism. economy.socialism from which results mutations and reconfigurations of pre-existingthe features of They Capitalism be introduced “bycannot but design” “paththrough extrication” from state normallychange in the present”were cultural and historical heritage. Inhis words, pastthe provides “the institutional for resources thusallies making the present of a recombinationthe of the bits from the past. While these theories have the merit for “bringing the history back in” to explain the explain to in” back history the “bringing for merit the have theories these While view, (1999) subscribespoint thisher of vision. From to Pollert unions the trade are unions trade For thismeant they that wouldbecaughtin a contradictory position 9 CEU eTD Collection government. Icontendalthough as powerful that organizationally unionsas arenot trade the the and managers unions, trade between interaction the on based strength) (or weakness weakness andexplains what it? followingIn the sections Iprovide an forexplanation labor inis Therefore the question post-communist Whatremains: societies”(p. labor 428). butexplaining weakness this overall explaining variation Europe Eastern becomes not within Thus task more “thecontext. compelling communist in post the variations intra-regional labor are isweakandthere isthat however explain. what itseeks to The consensus answer to actually (Crowley Up until 2004). now, to refers provide failed theliterature acompelling to dependency arguments toaccount for union instrength post-communism. we are Therefore, socialistperiod. leftlinks missingwith useexclusivelythepath some if we region Czech Republic unionismsuch as hadahistory Romania and the of trade before most? in of isbecause some legacy matters the countries question relevant the then The explains position the of the logicalpost-communist unions, be question askedto is what important (Trif financial access to resources 2004). unions of legislation and trade them the onlabor inRomania influence secured a considerable labor movements such as Poland and Italy (Meardi 2004). Similarly, the political involvement labor’sexplainingif weakness we consideracomparison between equally two politicized 2003). Also,union’slook as in being keyvariable involvementnot does the political (Stanojevic movement labor the of vitality the preserved concomitantly and communism fallkeep managed with after the to countries likeSlovenia of theirtheir ties constituencies in unions thatold is evidence believe. There letus theories mentioned as theabove clear as not legacies are socialist of effects the The approach. amore open requires in transition unions However, labor’s choices. “constrain” institutions trade of complex tacklingtopic the Yet even if we agree that labor is a weak actor we still do not know what “weakness” know what not do westill is actor laborYet aweak that ifweagree even inconsistency. suffersa time from legacy legacy best the argument If Moreover 10 CEU eTD Collection Poland wasconsideredtobeatthevanguard of political reform, Romania in wasplaced the mobilization of as principalworkers the tool to make theirclaims heard. Finallyifby 1997 was “pacified”movement bymid’ 90’s,inuse unions preferredRomania trade the to partiallymanaged Further,membership preserve assets. to their labor while Polishthe Polish movement union suffered aspectacularmembership in decline whileRomania unions level plant influence of privatization the theirto companies. companies (SOE’s) countries wentvery inboth slow. Unions atthe securedsufficientpower owned state the of privatization the initially Third, countries. both in role important an plays relatively successful in securing benefits for theirmembers. Second,union politicization membership and highlevels madeof protests movements inunion both countries be to union High features. similar displayed countries in both movements union communism, considerations liebehind selection the of twothe countries. in First, initial the phase of post- constituency 2002; (Kideckel Trif 2007, 2008; 2004, Vanhuysse 2007). internally fragmented, politically involvedhaving and an ambiguous its with relationship whostudy unionism Romanian laborthe istrade often conclude that a political actor,weak low value.Scholars in comparative with studies been mostly mentioned general sporadically economieshave of Visegradthe asRomaniaEuropean whilecases such East other group governments seek tobargain whenwith unions pursuing policy reforms. becausepoliticallyRomanian that matter casebetween 1990and2004 still I show unions they used to be they still managed to secure benefits for the rank and file. I look at the However, beginning with movements thetwocountries1993 union diverge. started to by comparingI address cases:Romania and gap this two Poland. Several “most advanced”transition the on has focused literature Much of transitology the Case 1.3. selection 11 CEU eTD Collection in 1993. theDemocraticelections Left parliamentary wonthe Alliance which OPZZ supported (SLD) Politically disenchantment. their from benefit to began OPZZ workers, to noticeable became reforms economic of the effects the once organization, asa“collaborator” was contested it enterprises. initially owned Although in state the class working of the representative as the ideology, which opened atimeless rivalry Solidarity with the union. The labeleditself union Party. the loyal to leftwing unions the between a OPZZ assumed Afterof 1989, an alliance reforms. radical market idea self of worker andmanagement“self governing republic” andswitched support to its from it early departed the of government the after control taking the However, right compete. to it allowed for which all seats was freethe won and elections inthefirst participated Solidarity communism, of fall the Following in Poland. rule communist the in ending Throughout the 80’s movement, whichback the playedwas a social then union acrucial role identity beginninglong the of period. before transition anti-communistthe activist, Democrats. Christian the of included a coalition resultwhich Similarly, Prime leaderof CSDR wasappointed the between 1996and Minister 1998as a union allowed itto inobtain seats only two duringParliament 2000-2004Legislature. the the of orientation wing right This reforms. therapy shock sustaining ideology, liberal a had (Trif Christian the DemocraticDemocrats CSDRsupports while BNS Party Initially 2004). Social the support BNS and CNSLR-Brotherhood commitments. political informal politicalthe affiliation of unionsthe was bannedbylaw themajor confederations have did laggards”“transition category. On the other side of On in side OPZZwasformed 1984asaresult politicalthe other the the spectrum, of In the Polish case the unions mimic the left right divide. Solidarity assumed its Romania in Although politicized. heavily are still and were, unions countries both In 12 CEU eTD Collection July formal1990 gaveworkers on management’spower decisions through newlythe created in adopted OwnedEnterprises State on Privatization Lawon enterprises. The owned state position in Polish the securedan workers advantageous proceed, should privatization how should be always first sold their to workers”. With government havingsplitthe views about enterprises state privatized “shares of that agreed (CBOS) Institute Statistical by the Polish insider’s pressures for privatizations. surveyed inthe1990 of percentworkers As muchas80 unionsfairly InPoland strong created characteristics. initially similar structural displayed and much overlapping company atthe level. which compete for members. This leads to low institutional consolidation of the federations confederations manyastwenty areas level at national the there that Casale(1999) report be and Mihes to representative. considered whichare fivemainconfederations currently and unions Kubiktrade and200nationalIn Romania federations (Ekiert there are 1999). three big confederations: NSZZ Solidarno NSZZ bigthree confederations: million by which 800.0002000 shrunk (Table to 2). also sufferedmembership membership CNSLRclaimed in losses. 1990 of a over 2.5 the members. unions Romanian and800.000 tobebetween 700.000 membershipwas estimated butmembersfor controlling the exaggerated figuresby provided itself, union the its 1millionaround membersmillion 2000OPZZ 1.2 claimedaround (Kubicek2004).In levelsmembership aquarterof by numbered l981 wasreducedto the and2000 the union In period. Poland Solidarity claimed initially around 10million members butby 1989 the Membershipmarked movement losses the union ever since beginning the of transition the unions. the of features of organizational intheevolution similarities important are there Furthermore, in both Furthermore, inboth countries theprivatization in process started 1990's the and In addition the labor movements in both countries are highly fragmented. Poland has Poland fragmented. highly are countries in both movements labor the addition In Beside the political inclinations which characterize union movement in both countries in both movement union characterize which inclinations political the Beside Ğü , OPZZ and FZZ. They incorporate around 1.500 andFZZ.incorporate , OPZZ They 13 CEU eTD Collection allocates much less resources for the same policies. Therefore a logical question to be Poland its around spendson welfare policies 20percentGDPof (Tablebelow)Romania 1 while evenmore puzzling: expenditures becomes picture state the welfare the union strength year. for each asaproxy decrease If we take a significant in with region the states among the higher than EU average. Poland on otherthe hand, has lowest the tradeunion density score union indicator, trade the 2006, on density Romania quite highforregion, the and scores process. control privatization the capacity to governmental ownership andlittle foreign involvement resulting insider’s instrong andinterests low employee werethelargescale program this of The consequences shares of companies. the “pilot” buyouts whichmanagers buy meant weregranted the that priority andworkers to the mostly years privatization early taking control the plants.Inthe underwent over through ithad do fewso. resources to Ineffect, unions andmanagement seized the opportunity of state owned companies because it although sought control to them politicalthrough influence towards government stanceof the foreign an without help. ambiguous This created proceed should reforms that argued who President the of position conservative the by caused was comparatively less help in terms of know how from foreign advisors. Partly, this situation knowledgehow about privatization shouldand, proceed unlikein Polishthe case,itreceived disenfranchisement. resisted often very and decisions privatization on power veto company purchasingwith the assets. of To possibility gradually the gained this endworkers 50 percentprice) shares(at of thecompany them 20 percent councils andguaranteed works Let aside these similarities a striking fact is unveiled by the data. Between Between 1997 and is data. by factthe unveiled striking a similarities these Let aside very slow.started Similarly,little had privatization The in Romania executive 14 CEU eTD Collection policies. Therefore, while legacies are important in setting the general “frame” within which within “frame” general the in setting important are legacies while Therefore, policies. influencekeep orextend ongovernmental their bodies inorderto such thetripartite as strikes andincludedlockouts herefrom protests, use institutional to the collective channels of transition. of A is withthe adverseconsequences cope activities in of to range order undertake unions which actions purposive the account into take must strength union of explanation determining whetherunion environmentis the conducive to power. However, acomplete (Vanhuysse view, From of point this 2009). importantmacro-economic in variables are democracies” in post-communist power union of erosion “dramatic forthe account Romania? in density union of preservation relative the and case Polish in the assets membership labor of erosion the explain to how differently, Put benefits? welfare low very receive they return unions ifin keep themembership in makes to trade the asked here Romanian workers iswhat Welfare State Table 1:Trade UnionDensity and Welfare State Expenditureand inRomania Poland (1997 - Expenditure Density Union As I discussed in the previous paragraphs the “legacy” based arguments cannot fully cannot based arguments “legacy” the paragraphs previous in the AsI discussed 1.4. Theoretical Considerations * for Welfare State Expenditure: OECD databases and Romanian National Statistical Institute Romania Romania Poland Poland Sources: *forunion density: Visserdatabase 2009 1997 22.6 28.6 14.5 46.1 2006) 15 2001 20.7 13.7 40.1 26 2004 21.3 14.6 38.5 18 2006 20.5 14.4 33.7 14 CEU eTD Collection may have general interests or be very specific in their scope. For trade unions, more the Fortrade in specific scope. their orbevery interests havemay general themselves while others and favorable to develop issues whopromote become issue entrepreneurs as maygovernments have a passive or such reactive actors Some etc. conditions laws, working labor hours, working such as wages, matters behavior. On the other substantive focal areasor broad having concern of bargaining, incollective either interested hand actors maybe arestake. Forexample, offederations at interests unions those activities where in the involved be to likely are interests policy hold which organizations Hence, others. from players. willhaveanimpactother on which sanctions impose makers decision and to tothe interests communicate their made; to are wheredecisions sites maintainingpresence atthe aconstantthrough making influence national the process decision with connectand to resources mobilize They apolicy decision. of outcome influence the policy making process. They coordinate enable and individuals to in pool to resources order important characteristic isthatthey mobilize sufficient tomonitor resources andinfluencecan most the Their institutions. government and associations employers’ federations, policy decisions and allow a complete analysis of the policy making process. relations, actions. and collective investigate labor policy thenational domains: advanced democracies. components) They fourrely (or dimensions to analytical on three for policy-making in the involvement labor’s analyze to framework theoretical losses. or be gains to considered be can what andbe trusted to are use, whatpartners to resources which decide who over those are other, theactors each amongst for resources compete actors The The Knokeon I draw policy interestspolicy organizational actors direct social actors towards specific ends andmove them away et.al comprise formal the organizations unions, suchastrade (1996) who developed an actor centered comparative centered an actor developed who (1996) Each of these components interrelate across a series of a series across interrelate components these Each of 16 organizational actors,interests, policy power CEU eTD Collection coalitions whereas their Polish counterparts did not do so? and form disputes and ideological fragmentation overcomeunions their managedto Romanian the why is here question interesting The building. coalition action: collective Iwillmy purpose, lobbying makers.For and typedecision of first only the use directly publicity media mass to building coalition from ranging decisions policy the influence to seek indecision favor”(Knoketheir 1996).There is a variety of foroptions organizations which collective the sway to event, a policy deciding for responsible authorities public the on salient organizations to“bring sufficient political power to bear on other policy domain actors, most makingdecision process. marginalized from the be will resources ablesecure these position. to which arenot Actors playin networks international securing an roleadvantageous a key agencies access to and resources, which obviously are important, access to information and know how, efficient state use for and material achieving them Beside theirparticular purposes. theirto actors ability country.the elites to givebe uponthe what andfilerank the subordinate used strongest and union to in Avdagic it, governmentused a the (2006)puts controlling thedemands tradeunionsthe of through tripartitethe institutions. In Poland, as (2008) emphasizes Romaniangovernmentshavealwaysand succeeded sought often in Trif actors. other the of behavior the influence or change to position the in often very been change haveactors Inthepost-communistbehaviorto governments of the setting others. the interesting here. First, from a relational point of view power denotes the capacity of some specific issues they lobby likelierthe for them achieveto theirgoals. The fourth dimension is dimension fourth The of in thepossession are which of resources amount the refers to power Second, The power relationspower represent the key aspect of the framework. Two aspects are collective action 17 party paternalismparty which refers to the attempts of the strategy to get union the strategy to CEU eTD Collection provide an in depth analysis of these strategies and their effect on labor position during position labor on effect their and strategies these of analysis in depth an provide adapt new Thenext chapter environment. tothe will strategies whichunions to developed the labor alsoconsider should during transition fullof accountof position a andthe that inconsistencies sufferof from series arguments based a “legacy” found thatthe It transition. arestillthere tobeansweredquestions role the about andstrength unionsof in trade goals. partner's for as well as goals union for mobilization allow coalitions Last, goals. accepted socially broader with in concert act and themselves from interests” unionsassociating groups with themselves can off other take “special suspicion the of by In addition, context. democratic new inthe acceptance gain and past the with break their prove to had unions as, resource essential an been has this contexts post-communist issues. Legitimacy is the other resource which unions seek toobtain by building coalitions. In law or related immigration, issues welfare on advice technical provide can coalition partners example, For formulation. in policy help specialist may provide partners coalition while crucialisAnother resource unions mayexpertise: provide in expertise relatedlabor issues female new workers. or groupssuchaspart-time unions mayofferto andreceiveaccess paid staff. Also, or activists of networks to access or in strikes support as such resources physical and financial receive may Unions others. exchanging while partners their from goals. union's objectives. haveThey mightbeunreliable union promote or alimitedcapacity to means However,necessary for achieving unions the goals. their induce they a for also risk provideforis legislative acquirechange. to The main of partners to coalition role the support interests from employers, toboost their bargaining power, to advocate for worker's rights or Tosum engagedliterature that andshowed “transitology” chapterthe up, this with various aremeansby resources access Broadly coalitions which unions speaking, Unions enter in coalitions for a variety of reasons: to receive recognition of their 18 CEU eTD Collection policymaker’s agenda. for influencegoals and bringing werepreferred worker’s whatchannels of demands on achievewhat atby look willwereutilized unions resources to their transition. It trade also 19 CEU eTD Collection Romanian Trade Unions)defunct –the communist union, trade 22 of December on 1989, of Union (General UGSR of leaders the of one of confession the to According transition. of transition was fully captured by the NSF and its allies. of years early the in which process political the of outcomes the in influencing powerless many members of government.The upshotofthis position eliteswas havebeen that of histories personal the with clashed which narrative anticommunist the was discourse elites government. liberal Infact,agenda to major the theme of Romanian the post-communist inunsuccessful and capturing feelings and the anger of workers failed tospread they their protesters. slogans such “Weas we don’t intellectuals!” work, “Death from be think!” to or could heard (NSF) andFrontintellectuals. against On January 28 of 1990 on streets of the Bucharest where wouldsupport theregime workers unsatisfied protest to by built National the Salvation From workers. here peculiarresulted to extended the situation in rights granted elections elites were themselvesmarginalized by for which,insearch government the popular support democracy. to transition successful for liberal However, a the as aliability to was referred and elites by the artifact” “anachronistic asan seen was class working the where Romania, andincorporate their Interestingly, refused demands. in workers to samehappened the marginalpolicy to makers.(2005) argues InPoland, Ost thatelites weretoorganize unwilling From this point of viewFrom of pointthis suffered theRomanian elites a doublefailure. They were were labor’s interests that evident became it socialism state of collapse the after Soon 2.1. The overthrow ofsocialism andthe initial conditions for labor Still, the Romanian labor movement became very active starting from from early very the phases active starting movement became labor Still, Romanian the CHAPTER 2 20 CEU eTD Collection themselves. as Romanian by Statisticalwell unions Institute as onthenumbers trade the reported importantmost confederations inRomania. arebased The data on reportsthe by National formed attheunaffiliated company level. Table were datafor the membership 2showsthe and Beside electronics. “bigfour” the confederations,many unions other thatremained interests of from workers the energy industry, telecommunications, machine building, post and paper. Finally,in June1991,National representTradethe formedUnion Bloc was to petrochemical steel,fabrication, electronics, inmetal the workers represented June 1991and Confederation of Free of TradeConfederation Unions. The union, third bigtrade inrecognition very period of a short bybecomingtime member a of International the communist organization. mainly Composed from truck drivers, Fratia and offer for NSF’s support program. Free of Trade Confederation National Unionsthe formed and elections held of Romania Committee Provisional the (CNSLR). Consequently, CNSLR started National Salvation Front(NSF)– who group the seizedafter power Ceausescu’sto death. be politically active leaders from newly of formedthe “free union”selfappointed receivedrecognition the year, Romania’s that forerunners Later of 2004). (Carey the largestmodern confederation” andFree organizations: the TradeCommittee Provisional “the of The Unions – Romania while people were still fighting on the street, he was already working to two new (The Brotherhood) which initially criticized the Provisional Committee as being a neo- Furthermore, other confederations appeared as well. Among the most influential aswell. was Amongmost appeared confederations the other Furthermore, Within several months, in the effervescent and chaotic atmosphere of the new regime, 21 Fratia Cartel Alfa, achieved international achieved was formed in CEU eTD Collection 1990’s a clear andproposed liberalmeasures. set of economic manage social impose theirideas.democratic viewdidnotto in The wasintroduced Plan the the working class political which traditions in free emphasizedlack 1989and democrats, market before Poland of the base of Solidarity place. totake transformation A by liberalism was viewto adopted social competing (Slay 1994). However,and butindustrial sectors this wastheprice tobepaidinstitutionalfor and structural the proponents 1942). the(Schumpeter realized manyThe reformers shock firms that therapy destroy would of the economy,the hyperinflation openingand the of containing market. national the influence in fighting and backedby state aimed was Plan,apolicy at IMF Balcerowicz the wasadopted Theformulawhich national responsibility”. of wasa“government government labor business bypowerful led 2002).Themain(Iankova Solidarity of the Mazowiecki goal of marginalization and economy in the role minimum state’s favored neoliberalism ideology, prevailing happen.Being change the aneffective to for reforms of economic acceptance labor’sfor arguments and Neoliberal need the quiescence (Przeworski emphasized 1991). establishment Table 2:Mostimportant confederations inRomaniaby the year of establishment and Year of 1994 1990 1994 1991 1990 The Balcerowicz Plan was in Schumpeterian terms a form destruction” form “creative of a terms in Schumpeterian was Plan The Balcerowicz In neoliberalism both Poland, was embraced by political cultural and elites Trade Membership unions Brotherhood Cartel Cartel Alfa Meridian CNSLR- CSDR BNS *Source: Pilat*Source: 2006 7.0 Mining, metallurgy, 170.000 chemicals 325.000 4.0 Education, health, food industry, 345.000 textiles 375.000 0.0 Present in almost all the 800.000 sectors membership 22 agriculture, transports, publicagriculture, transports, administration Mines, education, banks, tourism, administration telecommunications, health, public Transports, energy, car manufacturing, Represented Sectors Represented CEU eTD Collection worker’s requests and partly because the effects of the economic transition were not yet not were transition the economic of effects because the andpartly requests worker’s respond frequency lowerlevels. becauseto to partly This happened government sought the correspondingly with but well as in Romania rose levels Militancy criticism. and opposition the received constant government politicalprogram of privatization the and program year. previous the doubledalmost Theeffect ascompared with the wasthat changes of these reported with 115 687participants andlost 159016 working days. By 1991, striking activity Between 1990andstrikes 1991, 250official amplifiedconflicts. were labor switched to national unions. andbetween workers management strikes produced and beyondconflicts the control of incontinuedownership most state largethe of piecemeal enterprises. Instead disputes and arrangements labor-management bargaining, collective national against advocated also officials government’s opposed for privatization 1994). This plans (Slay alliance conservative and union workers’ between directors enterprise. “their”An enterprise councils, alliance of privatization in tothe workers’ only factionalizedreacting as interested were councils chaotic became movement union the grassroots the At level. sectoral and national at the both attitude more radical a by adopting reacted unions effect, In widened. expectations member’sand by government the pursued thepolicies between thegap decreased and movementunion started to shift its position. During the 1991and 1992real incomes skyrocketed. Despite increased overnightandinflation radical Prices of consumer goods brought changes. initial agreement by almost favored government universally society alike.and civil the Balcerowicz Plan The initially was pathway with neoliberal the Instead, adopted. initially was theinstitution tripartite no reforms, under of Poland’s society monolithic (Iankova 2002)andunderdeveloped organizational resources the umbrella of Solidarity, The initial social peace which accompanied the early stages of plan of Balcerowicz the stages theearly accompanied which social peace The initial Consensus was needed to guarantee social peace for such a drastic plan but, because but, plan social such for a drastic guarantee peace neededto Consensus was 23 CEU eTD Collection the promised reforms which created further dissatisfaction amongst workers. workers. The national furtheramongst dissatisfaction created promised which reforms the deliverfailed By to the of moratorium government the fuel heating rent. period end the and food, subsidiesmost of prices cut on aside and with liberalization wenton government price the protests these and thejob. Despite off sailors walked workers harbor while inConstanta strike on went in Brasov workers factory tractor country: the throughout emerged conditions legislation. Theconsensuslast not working long did forand better strikes andliving labor on influence their increase to government the asked they though consensus their gave The 2004). major confederations (Carey reforms forthe effects of negative the compensation andfrom demandsworking unions conditions whichin trade the would return receive model.economy following Polish the included moratorium asixmonths Theprogram pay on amarket of promotion the and enterprises state of privatization immediate the proposed part of a widera was policy The their wages. affected which controls price eliminate government’sto policy programagainstprotest Bucharest time to this to miners returned 1991the September institutions. In of reforms protesters, destructionthe ofthe opposition headquarters the of important and other parties initiated andother miners clashesbetween led event from elements”. to fascist The University Square by the Prime“free the and “defendthe Revolution” “reestablish to inorder”, Bucharest miners came Minister Iliescu,summons several violent. In President the from June 1990,respondingto thousand Petre Roman who entirely visible. Still, an important feature of the Romanian strike pattern is that they turned they often isthat pattern strike of Romanian feature the important Still, an Romania Poland Table 3:LabourDisputes: Working Days Lost per1,000Employees 1991-1996 *Source (Funk*Source and Lesch2004) (all industries and services) 66 40 24 1997-2002 68 6 2000 94 7 CEU eTD Collection of the party it also created high pressures for redistribution and social protection. Given Given that social andprotection. high redistribution for itpressures alsoof party the created victory theelectoral part of country.the ensured while But this north-east from the peasantry and companies industrial medium and in large workers on based mostly was pool electoral The Social Democratic Romania the transition thepolitical throughout was period situation and(Keil Keil 2002). Party (the reincarnation of NSF) remained cooperation. rather than conflict in power until 1996.in Romania 1994inPoland) arena and and once another established they provided for Its relatively (1993 late wereadopted institutions be in section, tripartite discussed following the will As institutionalized. poorly are relations industrial the when higher are levels protest that explained bytheeconomic hardshipswhich affected workingthe class.Keyl (2003) shows be fully cannot protest of levels high These protesters. and police between clashes to led and management’s or government against the policy. illegalMany as them being of were termed strike andfor used Besideto period. politicalprotests strikes workers reasons walkouts which mademore it likely be affectedto by social instability. On the other hand the government they itgovernment in did stop to protests. calls of the spite national from confederations the was split about the speed and scope andfactions of governmentthe alike. proved While workers their by power the toppling of political reforms resign. These events show that the economic reformshad little support both from the workers as riot well as from lossthe Iliescu of support made President the theRomancabinet to buildingwithout but takingfull over them.control in The chaosproduced by Bucharestthe stop. not did demonstrations the in legislation 1991 new Labor and the adoption of despite for protests called confederations On factor hand, other the which animportant high tothe contributed level in strikes of As Tablelevel 3showsthe strikes followedof anupwardtrend whole the throughout This timeminers the Parliamentthe attacked building and national the television 25 CEU eTD Collection macroeconomic problems the left chose a gradual left agradual chose problems themacroeconomic reform path. andpower addressingthe its to between access preserving Caught toredistribute. resources the transitional recession was rather high in Romania, the governments did not have many it lost the ability to andlockouts through protests workers from the pressure constantunder waskept listengovernment to thethe because Practically “voice” policy. industrial on run short in the implications important had of the workers. To use anddefend theirpositions. goactivity Thisstop would strike again to so workers fully kept Hirschman’s (1970) wererarely thesepromises However,budgetary constraints protests. due to ceasing industrial term, pay would agreeto increases levels employment inforwage and keepthe up exchange usually ministers. and The government between workers negotiations directly settled through (Kollonay-Lehoczky 1997). take part in them. In this wereallowed to workers non-unionized level because plant the at conflict councils created respect, Romanian works works powers, these In of spite process. income privatization and the security guarantees, councils were a substitute management’s the over involved and such inmatters decisions they were income as for unionism level.Works councils plant the throughworks at or sufficientgranted powers councils were bargainingintroduction institutions, place informal oftripartite through eitherchannels took between social(Mihes and andtheCasale However, partners government 1999). prior tothe implementbody project dialogue a Phare seekingto of in1993asaresultwas established tripartite first the InRomania countries. inCEE bodies representation worker of creation Immediately change regime the after Immediately 2.2. Between bipartism and tripartism The poor institutionalization of industrial relations at this stage made conflicts to be institutionalization The to stagemadeconflicts industrialthis atpoor of relations 26 international organizations lobbied for the CEU eTD Collection law. In the words of the Vice Presidentof Cartel Alfa confederation, the leaders of the NSF: by as required representation lacking territorial despite of confederation status the received defectproducer, andform Sidexto were encouraged Galati a neworganization which from steel Similarly,the workers organization. formed the their own and confederation miner’sthe unions from Jiu Valley theirwhich membership ceased inthe Cartel Alfa happenedLee confederations (Sznajder with 2010). This split from them independent the to addition governmentthe sought forge to alliances with localpowerful andunions encouraged 2006). In (Korkut competingbetween confederations led tensions to lackformal channels of company level.in asimilar one Thisstrategy environment tothe Poland,produced the where the at bargaining as such grievances its communicate to channels other has labor that arguing 1996, until cooperation blockedtripartite of anyform Romanian the government Secretariat by body intripartite was created government the July 1997 in underrepresented bargainingthe another collapse the Following institution, the process. of having with interests whichmade forall representative one only unions confederations union paid for the theircontribution sustaining the Secretariat andsecond, they were discontented anddidnot of bargain the kepttheirnot part have associations employer's the namely that reason financial the emphasized they first withdrawal: their for unions the by underlined unions withdrew their from support institutionthe which led toits collapse. Two reasons were government, the unions and employer's associations. However, only yearsfour laterthe “noise”. into “voice” wastransformed worker’s But despite But workers’ permanentprotests and formal the adoption the of Tripartite the between conflicts mediate the in 1993to was established The Secretariat Tripartite used some trade union leaders in order to do that. unionThe miners leaders inorderto used trade and some and weaken these structures to immediately decided and powerful become would very structures these were really that unhappy 27 CEU eTD Collection and employment legislation in 1991. The unemployment benefits were supported through a inthrough legislationsupported andbenefits were 1991. Theemployment unemployment the big industrial sites. labor position: unions used this opportunity create coalitionsto managers with and control weakening effect to exactlyopposite the maintainingcreated high levels uncertainty to of its commitment leveland national atthe cooperate to thegovernment of lack the capacity of sides.remained onopposite section, unwillingnessor As Iwill inthefollowingdiscuss the efforts institutionsto create bargaining for majorin the groups interest the economy level negotiation of level. the remained company Still, between 1996 and of 2000 inspite tendencies which was unwilling to implementcorporatist bargaininglabor relations remained by dominated disagreements. substantive reforms.inprovide for framework fact the Economic Councilwascreated that a 1997 to Social and In effect the dominantresume action.deliver industrial made Despite the unionsto to reforms promised the which pursue the economic reformshoneymoonlast did butthislong. not to failedThe government reforms. Initially the unions agreed on a short-term moratorium to allow the government to moremembersupported union who in involvement decisionsthe regarding the economic formerMinister Victor union Prime Ciorbeawasa the duringAlso, transition. itadvocated which economic reforms for the needed support coalition government becausethe happened totradeunions andemployer’s matters social consulted oneconomic associations. and This forprovide the be morelegalitself granttripartite dialogue to support to the right andto Poland adopted ainPolandnew Code adopted Labor followed April bycomprehensive labor 1989 Thus, until Thus, by until 1996the hampered social illiberal a governmentwith dialogue was in Romania (Sznajder Lee 2010). federation structures most important werethe structures federation Gala Following the regime change in 1996, the center-rightinthe committed government 1996, regimeFollowing the change Ġ i union are just two examples, but in early 1990s, these two in 1990s,these butexamples,early two just i are union 28 CEU eTD Collection Worker’s Benefit Fund and over the macroeconomic and social policies. This was This policies. social and macroeconomic the over and Fund Benefit Worker’s Guaranteed role the asupervisory over with board introduced atripartite ThePact path. favored shockthe therapy governmentand(the Solidarity) favoring those and more a gradual who between was acompromisethose Pact the unions. In essence OPZZ and Solidarity the by both signed was Pact the 1993 February In representatives. Organization Labor Pact were facilitatedforand support continuation the of reforms. As Romanian inthe case the negotiations for the by the by proposed Europeanguarantee a governmentthe to minimum insecurity for lessreturn union protests PhareThe project Enterprise and theenter into negotiations given atthattimethat it mainwas the in employerindustry. the Polish participation Pact, thisdespite of idealrepresentation mechanisma market waspressured Polishthe government of InternationalBut employees. and employers between regulating negotiations entail would economy market developed shouldbe involved not innegotiations sectoral at the and level company afullygiven that the distributionnational level. As a part of the neo-liberalof social thus separatingfrom it individual earnings. program the prevailingcosts wage average quarter’s previous the a of introduced benefitof 36% unemployment flatrate belief of was thattransformation the eligibility criteria for unemployment. The modifiedscheme wasfurther init 1992when state periodthe for which couldunemployed workers receive compensation and also onthe on limits introduced which Unemployment and Employment on Act the adopted wasgovernment the 1991 of autumn the In benefits. the down scale to had government the proportionally, and However, costs period. indefinite rose the of schemegrew the asunemployment three months, budget. state the 70%50% benefits The initial of in salary the scheme equal to the first provided of the salary fundLabor which a payroll through was sustained 3%)andtax of subsidies2% (later from in the following six months and 40% afterwards for an Overall the 1991 legislation did not favor the development of tripartism at the at tripartism of development the favor not did legislation 1991 the Overall 29 CEU eTD Collection politically influential and managed to mobilize influentialpolitically for strikes andmanaged support and to demonstrations. The been have unions The in Romania. one the with similar remained labor and employers in sector Poland. inlevel Collective Sectoral cooperation the steel in inthesmooth resulted Agreement 1996 regulating wages,hours andfinancial working benefits. At same the time the signingof the The established. was levelTeamIndustry Restructuring agreement asectoral negotiated inunion 1995the response pressures, to Tripartite Team for Conditions Social of Steel of people with high incomes. requestof the theinterests FUin FU the the Commission as accommodating the defended had difficulties in but majority the Parliament for a securing of FU the needed the agreement Solidarity Union minority partner- Electoral Freedom because of the (FU). the ruling Action achieve to difficult was Commission in the consensus hand other the On Commission. persist.to a more TheOPZZ returned to oppositional in andcutdialoguestance the Solidarity leadership on issuebutthis impasses working onthe of Commission the continued unions (Robertson inthemining2004). In sector discussions 1998OPZZ, started with the particularly power health in legislation and education and passed the totally which eliminated measures, pro-labor the adopted AWS aseries measures union which weakened took of reforms.ledmarketoriented by While (supported OPZZ)the previous SLDgovernment the beimpossible achieved. to Asin happened early the 90’s whenin power, Solidarity pursued Action (AWS),marked beginning the of onkey when a period agreements was social issues Electoral of Solidarity underthe umbrella grouped parties, of post-Solidarity government predecessor of the National Commission on Social Economic Issues. By and large, the pattern of interaction inside the tripartite bodies between state, between bodies the tripartite inside the ofinteraction pattern By large,the and levels. sectoral andAs a enterprise the dialogue at favored the All developments these After 1997electionsin the social Thereturn in dialogue deteriorated. Poland 30 CEU eTD Collection was weaker than was weaker as previous than the governments leftist partiesthe had insideit split over views government Politically coalition the social dialogue. and promote the economy restructure and wageincreaseswhichmade hardertoimplement(Pop reforms 2006). economic inflation between cycle a vicious opened this side economic the On demands. their impose to were existent only a formal through level, unionsfrom the usedtheirsupport rankthe andfile fact negotiations the that tripartite the Despite face andstrikes. demonstrations the constant of interests.sustain firm Politically to governmentswereunable the against in unions a position Romanianthe unions pressedfor legitimacy andused the political topromote theirclimate counterparts Polish their Unlike game. in political the part can take that actors legitimate are rights over what used to be the propertyfor property struggles because of was undertaken Thiseffort movement. union fragmentthe “of the entire people” to legislation promoting by and or level endeavors national the at bargaining rejecting either by tolabor define who among unions. unions conflicts trade the parties andtrade exacerbated between limits blurredthe which camps political to subordinated were oflabor interests andmovedwhere intheParliament the ruling party had majority (Avdagic 2005).Thus the wasbypassed institutions onthenational issuestripartite onsocial thewould debate disagree laborrelying negotiations.felt Whenever tripartite unions on government without that the to of support thepolitical obtain trade enabled division successivegovernments ideological its position were pacified and governmentconsolidated the important difference wasHowever, unionsbetween andgovernment. in an results compromise creating terms that by the time the Nationalyield and expected the late did relatively not bargaining started level national collective Commission was created the unions From 1996 onwards the center right government unsuccessfully attempted to governmentunsuccessfully attempted centerright From 1996 onwards the subordinatefirstIn Romaniathe phase of tried to transition government the during bi-polar its and labor Polish of fragmentation internal the time, same the At 31 vis a labor. CEU eTD Collection Balcerowicz (1995) or Sachs (1996) believed that speedingallow Sachs believed reformswould economic (1996) that (1995) or Balcerowicz inreforms Latin America. Whileno maker argued policy for total breakup, peoplelike economic for ground the been had which Consensus Washington the was approach this for foundation The economies. socialist the reforming for model major the as policy economic groups. interest on national the will privatization costs shouldand proceed subsequently what speedof the privatization incur budgetsthe massive by subsidies. onhowrequiring This fast adebate to triggered oldthe especially companies, largethe (the companies “mammoths”) which weredraining sector. in theprivate than safer stayed companies owned state duringindustrial output thisperiod the wagesof remainedworkers in stable employment and suchin but educationby industrialthe andhealthcare. sectors Despiteas sector decline other paidby not wereits costs between and 2000 1997 recession transitional a second underwent Romania that fact the despite that chance by not is It government. the with negotiations promote theirinterests and informalinfluence outcomes through channels ordirect incapacity promote them to legitimateof bargaining. channelsas ways found Unions better to ofits because labor demands but circumvent wasin to position the state the because influence. forexchange the they party’soffered support political of demands andgreater policy In with their democrats). the position (especially supported which parties insidethecoalition createhow Unions the reforms directopportunity should usedthe channels proceed. to with Western and economistsadvisors aliberal (Przeworski orthodox 1991) advocated privatize had to the state environment, Withinregulated and poorly thiseffervescent 2.3. Privatization andtheavailable choices for labor bypassed not in Romania institutions were unlikein Therefore, tripartite Poland 32 CEU eTD Collection demands industries intheaffected sometimes evenagainsttheirpolitical program. Taking support managers’ ledparties between union confederations to competition and unions’ argue andmembership parties between Jerschina (1995) that electoral the competition sufficient councils managers. Further,works power through alliances and with Gorniak and were removed from policythe making attheplant process, level still workers retained unions level national the at Although, large scale privatization. of low interms very actually privatize fast,Poland scored very to efforts substantial 1989and2010.Despite between inRomania the and Poland largeof status shows scale privatization transition. Figure1 sector. which itaimed todevelop by failing toproduce changes with samethe speed in state the economy the of part the harmed have might therapy shock the Paradoxically restructure”. sector to sector than in improving state the manufacturing undercutting thefledgling private in more -mayeffective been have sector in state the gains force efficiency to specifically and step in giant one worldmarkets into Poland integrate to - designed liberalization (Websterrun, full abouttrade in “in short shocktherapy the 1992) notes Poland that the firms of “restructuring” socialist whichin meantradical reality in Webstercuts workforce. the sufferedlosses.important Openingof meant the worldmarket economy the to primarily the of economy the sectors successful inless hand On unions other the technocrats. educated internationally of handful a by replaced were They politicians. the and unions trade the transition 2004).On (Kubicek political the level the bypass privatization hadprocess to both might stages indown makingroleany whichunionsof assumed theearly policy have Poland. reality, In government’s the liberalizationfor fast and privatization support trimmed fasterbetter resume andadapt countries to to theinternational market. growth Nevertheless, the plans for privatization did not work so well in the early stages of In longthe term, therapyhad shock impact the unions asignificant trade the on in 33 CEU eTD Collection negotiations without reaching any agreement the confederations refused to sit at the same sitat the to refused confederations the agreement reaching any negotiations without influence process. weakened the ability reform months theirand position to After of painful conflicting levels in plantand national engaged positions at the unions the which were butalso level transferred national the unions firm between divisions tothe level.political The insiders choose the freedom company typeprivatization the to gaveto of the The initiative wouldover control be state the take respected not would deadline the deadline.If six months a within bemade will decision the that condition the with method of privatization the choose to right the given were managers and employees the pact the of provisions the to According large companies. owned state of increaseprivatization the speedof to and government the confederations between anagreement essentially bargaining.was privatization on Thesection government. The two most important chapters in the Pact were on privatization and collective the and associations employer’s unions, the between signed was Pact Enterprise the 1993 reforms insider’s andtheweakening of position? As Idiscussed in sections previous the in phases:whatfactors contributedimproved intwo 1996.Sotothe in1993and speeding of the was process in privatization the Figure1shows that Data secondphaseof the transition. arrangements. of tripartite in establishment setbacks the and relations conflicting to contributed movements union the of orientation political bi-polar fromdepart major to confederations worker’s interests. As section in shown previous the the two madethe disputes political levelthe national However, atthe wanted. they direction for mobilizecapacity strikes to influencelockouts makers support andtopolicy inthe period the unions the powerful period were can indefending unions the that Duringconclude weresuccessful their this early position. we point atthis missing werebasically institutions and b)tripartite of in terms protests active account into pointsa) two the emphasized in unions that: previousthe sections werevery In spite of strong conservative interests at the plant level privatization speeded in up level privatization plant interests at the conservative strong of In spite vis avis vis the state and management and state the 34 and maintained the maintained and CEU eTD Collection neoclassical gradualist transition process argued that the introduction system marketa free introduction of argued thatthe process gradualistneoclassical transition beforebe would ofliberalization The of undertaken. any adepts structures the attempts Gradualistsestablish out need the pointed to economic the institutional and political whoemphasized minimize the need to by thedisruption produced systemicthe change. alienation. privileged which level position company political its at the of too, process deepened the its lost labor Thus privatization. the with on going for consent insider’s anymore needed changeimportant major did labor was not for which state produced consequences the that an essential publicreform and(Kozarzewski administration Woodward 2001). The most of up whichrepresented Enterprises. Tonew Ministry Treasury set governa was theprocess ofState-owned andPrivatization Commercialization on Act ofthePrivatization adoption still remained in an ambiguous position. union confederations (Orenstein 2001). Privatization speeded upbutmany companies state table. In the end the government and employers signed an enterprise pact with each of the The shock therapy of by therapy cameThe shock gradualism proponents approach the the undercritique A second effortfurther to privatize was made bythe ingovernment 1996 with the 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 Figure 4:Large ScalePrivatization inRomaniaandPoland (1989-2010) 1989

1990

1991

1992

1993

1994

1995 *Source: EBRD Transition Indicators 1996

1997

1998

1999

2000

2001

35 2002

2003

2004

2005

2006

2007

2008

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2010 Romania Poland CEU eTD Collection party’s communist bureaucracy. Shortly after, the National Salvation Front’sparty’s Salvation bureaucracy. enterprise after, National communist the Shortly and influences political from managers of liberation the brought revolution The change. winner of regime the important most wasthe enterprises of socialist the level managers middle mainly of Thiscomposed group, Cusin 1997). and (Pasti “industrial technocracy” the thegradual weak actor fought battlesfor by room for leftpower reforms economic and within process brought competingshort run,the position unionsaffectednotof trade the was though democratizationthe unions in would In sector highly unchanged. the while remain state the sector regime intheindustrial the same sector. For Romania where thelaborto regulate relations andbreak coalitions. upthese state was a capacity state andreduced against change any of protest high levels into intranslated reality atthe workplace which conservativein coalitions followingdiscussed strong paragraphs: the countries in region.the which There reasons which willbe aretwo situation determined this privatizationpower stilllagged andother with to behind ascompared liberalization coming undergoing aregimechangein1996with toprivatizationcommitted a liberal government with Romaniatogether Despiteleast Albania post-communistwithin group. the privatized the companies throughout thewhole In period. transition 1999, the EBRDreport concluded that embarkingsea” or inalengthy process. transformation gradual elimination of centralization. This waspossible onlyby“rebuildingin the boat the 2003). The ultimate goal a fullyof functional wouldcapitalist market beachieveda through maintain in asemi-centralized acentralized system combination marketwith (Maragos defeated byinitiating a“preventive therapy”. According tothisview, desirable the would path be 1993)would in (Kornai “transformational recession” political polities. the aspects The will create problems which are impossible to be solved without considering the social and For trade unions this meant the preservation of some of the structures of oldof the ofsome structures of the preservation meantthe unions this For trade behind largeAs Figure Polandintermsof 1 shows, Romanialagged of privatization 36 CEU eTD Collection reform reform theshifted costs managementof failures tothepopulation via price increases. structure andleaving thepower relations in unchanged. industrial the sector Inreal the terms – increasedfor companies whileitonly keeping strategy prices the same with the available of the structure the leftuntouched this reform simple terms In “price liberalization”. a in they 1993) proposed of reforms level. enterprise thethe autumn obtained(and at Instead reorganized. stanceagainst had However, astrong of the newly formed class technocrats and had laborin be enterprises cuts the to decrease badyear management, productivity of policy. social and economic of elements contained laborthe movement. Obviously, this shiftbroadened theclaims madeby unions which now national withthe level prove catching contours leaders theirwas national seeking to for utility use union’ssought to asapolitical hand Ontheother power weapon. union’s organization at rhetoric and actions was determined by the wasdetermined actions rhetoric and central This unions focused theirattention administration. sudden changeinunion’stowards bureaucracy andparties. thetiesstate strengthened betweengovernment which through claims their legitimated they level political the On managers. from or administration decisions. eitherfrom favors central the secured worker’s through support They managerial in saying the important having whilean by workers weretrusted leaders number of managers from their positions. It was the golden age of Romanian unionism: union a significantfirst oust in yearof to transition the unions managedduring workers companies management. a Councilsled total control to by which werealsodismantled industrial the of enterprises the Wage from pressure company atthe level unions preserved financial worker’s status The refocusing of union’s protests came with a very high price for the workers. After a However, after one year of battles at the company level, between 1992 and 1993, and 1992 between level, company the battlesat year of However, one after Trade unions’ againstmobilizemanagers. workers key mobilizing By wasto response 37 ad hoc alliance with opposition opposition which parties alliance with CEU eTD Collection companies were in needmore of subsidies from state they the would channel itunion through and companies. thestate between negotiations timesAt when of shifted dynamics the much as twotimes bigger (Ahrendand Martins 2003). be numbersrates the as interest could special andrescheduling, energy debt andutilities, However,companies. ifsubsidies to indirect such as preferential prices we includealso bigger than in those Poland. The includes estimate only subsidies budgets from direct state to Table that the 4shows subsidiesstate firms to inRomaniamore than in1992were times two population. mostby management’sAgain werethegroup affected workers the decisions. the to burden the shift to than choices other no with state the leaving pay, to refused simply However, every thestate. towards accumulated hugeOvermanufacturing. debts sectors these time and car time when the the leverage Thisstate. towards visible was themost industries in suchascoal, steel key the state soughtincrease their to managers allowed and companies over control political any as itremoved to force payment budget. based state the onsubsidiesold through victory Againwas one which wasabig this of the debtsunlimited subsidizingbank through credits. inThe mechanism, 1993, replaced adopted the the managers possibility participateto in retraining programs. In 2001). addition layoffswhereimminent received the lump bigwere workers sumsand the (Newell national average 1.7times the remainedbetween 1.4 and sector in industrial the wages the transition throughout economy. in average, the On sectors other with as compared Ironically the unions ended up in an alliance with the managers against the state. This managers state. againstthe the in an with alliance endedup unions Ironically the On the other hand, the managers inOn mechanism their todevelop hand,the other the a used power order of Table 4:Budgetary subsidies toFirms, 1992and1994 (sharesGDP of Romania Poland *Source Worldbank *Source 38 1992 1.4 3.0 1994 2.2 3.2 CEU eTD Collection powerful were gradually taken under the administration of the government. Solidarity the government. of administration takenunder the were gradually powerful floor shop and members. unions between gap the deepened which a pathway chose labor Polish the problems The stateinherited andidentity weakness the in 2005). to Therefore, addition (Ost liberalization owned companies, transition from disappeared agendaand the was replaced bydemandsfor privatization and where unions at workplace. representation of the union the weakening are expected the fileandamong to discontent growing tothe up privatization. and rank This contributed to be the among workers. In some cases theymost even wentfurther and requested the government speed to produce will it which effects social the and privatization for need the accepted They level. from employmentrelationsthe privatization whichattheenterprise1993 onwards changed in supported very ways. InPoland otherthe actors unions positions relativedifferent to may refuse to change their position towards reforms. strong conservative thealliances short term losses. which On the other in hand, the receiveslevel inducementslabor for whichprovided that governmental compensate would choosing context a gradual ofreform a weakpath might regulatory lead company atthesectoral corporatistor practices bargaining to beconducive pathway may to very power of the for to keepsufficienttheirbargainingmanagedfight Theshocktherapy position. power to state initially. atleast strength preserved its Organizationally, membership but unionslost the resultof economicthe reforms by undertaken butgovernments plant the level coalitions of benefits. terms economic increases andsurprisinglywhatextended unions benefits. always Not the they got in wanted for wage government. unions manager’s would In receive proposals toreturn, support Employee ownership which usedbe to at the center of the union claims atthe onset of their hadand they resources countriesmade ofthe use Further,in two unions the a as challenged was transition of onset the at position strategic labor’s Toconclude, 39 CEU eTD Collection that even when unions supported privatizationinfluence even that if unions supported plans wasrelatively when the theirweak privatization wereaffected. movewhenever theirradical towards interests Evidence suggests inside Managers the any company process. and preempted acquiredprivileged positions privatization the slowed down it influence and political power it labor While preserved opportunities tostrike deals with governments. maketo theproblems of known workers the to policy makers and use political the managed unions that shows This members. party with negotiation informal through or action directeither through communistgovernment post influencedeach stability of thepolitical with in issues.and asay the governmentthe privatization related At nationalthe level they in Thisnegotiations leverage gave themanagement. with them of alliances workplace the this point of view, Romanian useunions managed to theirlegacies theirto advantage. issues. From related on work specific talks immediate andstart government of the attention lower strike levels.It also explains why institutionalization the of institutionstripartite isnot correlated with Striking benefits. bargaining other workplace overwagesand cases direct union-government of atthe and workpeculiar the explains This levels. national and sectoral the stoppagesat institutions bargaining collective was the mostFurther, and managers.itbargainingfor lack with government the compensatedthe of efficientinasset important Thisthe an grounds. provided preserve representation traditional their way to catch the important workplace fight for strategic they influence.Probably made mostchoice the wasto long-establishedof union relations ground andprivatization the eliminated presence. of employment decentralization the essence In decisions. company the over influence minimized insider’s gave and idea of up on democracy the economic reformers workplace However, the alliance between management and labor was a double edged sword. edged wasa labor double and management between However, alliance the preservation the was unions Romanian by made choice strategic important second The and preserve to chose unions Romanian the case, Polish the with contrast sharp In 40 CEU eTD Collection Commision no national agreement over privatization processwasreached. privatization over nonational agreement Commision insidethe Tripartite and OPZZ between Solidarity conflictfile. perennial However, given the for rank the losses and incur privatization faster would that accepted union the confederations growinginmakingbetween region. 1994 Politically fastest the country 1997 the Polandand much as in Romania. Further, Polishscale firms. As Table 5 shows in Poland the privateGDP sector contributed to GDP almostgrowth twice as accelerated a verythrough fast growing sector and private to fast privatization of smallthe medium and an average of 6% per year political arena. national andin influence at the workplace the their builtwhich timeover preserved they partnerships pragmatic The government. the from hostility and weakness organizational their Romanian rights. unions survived inover time workplace asimportant spite actors of defend to for unions whichseek a resource may butunion serveas organization obstacles to leastfor forground at preservingunion revitalization power.or inherently They not are a as serve legacies may it that seems Moreover policy trajectories. particular determine strategy choosingaparticular who upon are those actors the game, the of conditions losses. their for compensated be will most affected reforms workers byeconomic that the given speed uptheprivatization moratorium granted by Romanian the in to unions governmentthe 1996. They sought to suggests thatunionsautomatically privatization. werenot to opposed alsothe Recall insideLee2010).Thisin (Sznajder position occupiedturn the enterprise managers astrong The slow privatization of the large scale companies was compensated in Poland compensated was companies largescale the of The slow privatization 2.4. State capacityand workplace coalitions Finally, to important legaciesareindeed while extentthe they that the initial provide 41 CEU eTD Collection meritocratic, and internally cohesive bureaucracy; and effective and monitoring and monitoring and effective and bureaucracy; cohesive internally and meritocratic, a technocratic andresources: deploy extract means to and has authority the which state the to (http://info.worldbank.org/governance/wgi/index.asp). State’s absolute capacity “is extent the based on Worldwidethe (WGI) Indicators Governance project developed bytheWorld Bank used its infrastructural power to monitor and support privatizationthe process. theindustrial norms for state system, the regulating Besides establishingrelations thelegal relations. in industrial actor dominant the became state the Formally, bargaining. collective by workplace werereplaced unions’ obtaining trade agreements wide consensus. Industry 1996). in wagematters minister and Rapacki any (Blazyca nor negotiate will any enterprise” other finance of minister “neither the declared that issues”. Minister justThe Finance “minor were these that idea the emphasized the government bargaining. disputes workplace As the for large strategy “enterprise scalecompanies unions the proposed of pacts”asmechanisms and reachwith thepublic sector agreement to order inflation.while In growth containing economic support to a plan was Strategy the terms macroeconomic In Plan. Balcerowitz Strategy Poland for Commision. The SLD left wing government which came to power in 1993 proposed a Romania Poland Figure 2displays indicator capacityan of state mid the throughout 90’s and 2000’s necessarily without reforms pursue economic to wasable state the that indicates This by-passing whichresulted inthe Tripartitepath As aresultwas chosen a different Table 5:Private sector sharethe GDP of in Poland andRomania Institute; 2000) **(Negrescu Institute; VariousTransition EBRD Reports, Source: *National Statistical Issues; 12.** 1989 28* which was the most significant medium and short term policy since the since policy term short and medium significant most the was which 1992 25** 47* 34.8** 1993 52 42 1994 38.9 58 1996 55 60 1998 60 65 2000 60 70 CEU eTD Collection measure the state capacity in relation with other actors. capacity in with other state the relation measure monitoring and regulatory of capabilities and state the control the indicator to of corruption measure the to indicator quality regulatory bureaucracy; the cohesive internally and hasmeritocratic a state the what extent to measuring for indicator effectiveness government the resources; and deploy extract state the of authority measure the to indicator law by Schafer. capacity of conceptualized rule the as state Iused of dimensions proxies for the in good WGIprovide the indicators actors”. The other of and capabilities resources “interests, regulatory capabilities” (Shafer 1994). State capacity must also be seen in relation with the unions at the enterprise of management’s breakthe power to Further, strategy hidden the decisions. agenda of the and sectoral level“enterprise was achieved pacts” through While capture the thepolicy pacified to outcomes. interests sectoral for or company more difficult the removal labor offor the the madeit not. Thus SLDgovernment worksbethe or privatized company would the whether on not short term they removed decide typebutthe on right of the to privatization ingave workers launched December 1994 slowly its influence than in Romanian the its state policies. enforcing The mass privatization program which was over -0.8 -0.6 -0.4 -0.2 0.2 0.4 0.6 0.8 -1 0 1 The above data provide support for the claim that the Polish state wasmorefor theclaim Polishcapable the state provide that The abovedata support 9619 0020 0320 0520 0720 2009 2008 2007 2006 2005 2004 2003 2002 2000 1998 1996 Figure 5:State CapacityinRomania and Poland (1996-2009) *Source: Worldwide Governance Indicators 43 Poland Romania CEU eTD Collection the welfare state in midthe 90’s led a to growing number of unprotected citizens which again of curve. Theretrenchment asinus followed policies welfare the expenditures. Interestingly (Cerami toreduce introduced expansionthe 2008) reforms were of welfarethe cut claims and privatization through retrenchment unsustainable, became system welfare the of generosity the When force. labor of pacification the in role important an played also which programs assistance social of extension the by followed policies, retirement early of introduction through unemploymentthe was transition.tackled stages of rising Theof problem welfare benefits helpedeconomic reforms. As Vanhuysse out,amarked (2006)points increase in generosity of in cushioning the effects of the economicunemployment continued to grow at a rate of 4 per centreforms peryear. during the hitworstcategories of population.the insmall After of themid 90’s a decline period early for the lower costs into materialize not did transformation economic successful the However centof GDP the in50 per cent1993 to in Nuti, (Kolodko, 1997 andResearch 1997). deficit3 percentpublic sector was reducedto publicandthe was reducedfrom debt 86.9 per stabilizeto deficit thepublicsector andBetween reducepublic 1993 and debt. 1997the most powerful.of SOE’s were the privatization the stimulated whereunions gradually involvement. Thus, insiders’ broke state relatively early Polish the coalitions and concentrated dominatedownership by structures, withforeign investors low insider insider’sfor Themethod usedwas privatization agreement. produced “indirect” which sector. Beginning SOE’s1996 the with be began by commercializedto with noneed state the 90’s have gradually employee influence while back reduced cutting benefitsthe in state the councils had andreplacingthem wherelittleboards supervisory with workers noinfluence. or Social transfers were used to address the growing frustration and dissatisfaction frustration with and dissatisfaction address the growing wereusedto Social transfers by accompaniedPrivatization fiscal was reform. were introduced measures Austerity capableNeoliberalsa small but in mid preferredThe state. introduced reforms the 44 CEU eTD Collection discipline on the state owned companies. This created a moral hazard problem amoral hazard problem companies. SOE’swhere owned Thiscreated state onthe discipline Several reasons contributed duringof in spiked with transition recessional and 1997. percent three thecrisis second to this situation. Theindecline in the unemployment industrial output rate remained sevenyear first the constant state lackedmassive Despite the campaigns. in during capacityengaged parties in which commitments electoral to impose fiscal of because the and also unrest social of fearsof because This happened unemployment. employment security was higher than in the private sector. state bounditself subsidize any to which company would haveproblems. Therefore and early in90’sin the thestate because bargaining asset with the the astrong represented because they fire workers littlesector. exiting hadto their incentives managers Overall,the as Earle out,workersinFirst, owned enterpriseshad state (1997)points alowof probability mechanisms. several through is revealed process privatization slow the of dimension welfare The market. of the insecurities benefits and low welfare the compensate for meanswas to a be byinsider’slikely captured The delayed more Thus privatization to interests. were reforms from support leftistthe parties. political sufficient or resources organizational same the have not did they since position marginal.Insiders’ blocked who upuntil in thereforms,then especially the SOE’s their lost in welfaregenerous programs, midthe 90’s reforms when speededuplabor’s inputwas only achieve their While goals. inthebeginning of 90’sthe “bought” social they stability though basis. rate for example remained financed through employer’s contributions and on aflat aregranted requested are-calibration 2008). welfare the of (Inglot system Theunemployment benefits During the first of period transition the governmentsattachedthe value ahigh to Comparatively was Romanianthe state less in capable achieving or defining its goals. means asa to in policies usingthewelfare succeeded governments the Therefore 45 CEU eTD Collection subsidies for 50percent around for holidays, premiums for holidays a13 and at Between complexes. 1991 and2004,thecollectiveagreements company levelincluded the leisure in company’s holidays even and assistance medical vouchers, food received usually wages In workers benefits. to insocial addition and wereinterested managers workers both that revealed companies Romanian in several conducted Interviews benefits. revenues the distributing 2010). from Radulescu (Maria privatization privatizeto companies, the state would intervene and bailout the companies in need by increaseddebts dramatically Ownership State the Fund (SOF), having the institution the task financeinandartificially. moreproduction wagegrowth arrears to to take order When the populism theSOE’syears, thegovernment of parties. political encouraged the In electoral the formarket, the themselvesexit living outside the option was unattractive. didprovideassure a to not sufficientbenefits for workers Romanian the state that welfare Romanian had choose betweenworkers to beingunemployed andbeing underpaid. Giving didchose workers not exitthe Similaroption. Russiancasethe with 2001),the (Gimpelson high became debts accumulated in too companiesand were the impossibilitypay the to wages evenwhen the Moreover, debts. accumulated lossesand hugedaily average despite many without Unprofitable SOE’sconstraints. topay afforded highernational wagesthanthe resources exploit state thefreedom this section insider’s gave to inprevious discussed more even arrears. As I would create from government the more subsidies expecting upon transportation railway and posts gas, natural and mining energy, armament, from comprised economy - as well as in some areas belongingyear. to other branches, as decided by the A common practice for companies during transition was to offer workers non wage the was levels employment the of stability the to contributed which factor Another Beside the privatizable companies the state created a “strategic” sector of the of sector “strategic” a created state the companies privatizable the Beside 46 th wageeach CEU eTD Collection government. These sectors took thename of took These sectors government. providekeep enough to them as marketout of the which also improved the position of the to rankandthe file. Workers avoided welfaresystem becausethe unemployment not did file.Comparatively, manageddefend Romanian the labor to deliverits of some and to rights government.the Trade influencelost unions rankthe andbecame any unappealingto and real until early 2000’s.labor faileddefend Polish workplace to the by coalitionsand wassubdued perpetuated been have they case Romanian in the transition the in early relatively coalitions oppositelabor.for consequences the Whereas level broke company governments Polish the many unions privileges won within because they companies. owned kept state the the Finally, boards. management in the positions their kept MP’s the immunity Parliamentary law thatprivatization benot influencedshould by political beingfactors, sheltered by their administration of thein of because the councils The(Dochiaprotégées partiesplaces theyobtained won 2000). state owned companies. of their infavor competition distort and allocate capital to position andthe resources Despite the clearThe provision bureaucracybeneficiaries. multiple of with spoils of thesystem in a resulted This Romanian enterprises. the controlling won substantial reform. quothan to the status topreserve more incentives were influence there in sectors these Therefore, period. transition whole for the alike andunions managers as it had the allowedambiguity for the which theirsurrounded status of preservation theirrights of know how, bankruptcy. By largeandthe thehighly of privileged status these companies and the legal access constitution inalienable. file stated An entities these provision that not could additional to state which governmentissuethe by argued and administeredgoods not theydid were shares they status. Theyunlimited were entitled to budgetsubsidies andwerenon-privatizable becauseas To sum differentup, two stories have been inRomaniaunfolded Poland and with government became By 1998,itsubstantial the deprived cleartool that any itself of of 47 “regies autonommes” and received aspecial andreceived CEU eTD Collection compared with other countries in countries region. the with comparedother unions. as trade membershipdensity inhigherrates andunionization This isreflected 48 CEU eTD Collection It also negotiated a social pact with the trade unions and employer's associations by associations and employer's unions trade with the asocial pact negotiated alsoIt companies. medium and small forintroduced the tax breaks taking office the government the into and stability. achieving social European the country structure Within from a month was thusin power. Union Associations, was appointed Free of Trade Confederation National the of co-founders of the one Sarbu, Marian policies. as Minister of Labor. A laborbeimprovingPrivatization stalled continued process to andmoresocial attention to was paid friendly political coalitionbefinancially feasible politically onlyifthe would supportworkers. to beable government Consequently,voters. itargued thatprivatization and of closing inefficientthe wouldplants a budget deficit of 4.5 – 5 per cent in order to provide a “social safety net” for the lowincome planned and recommendations (IMF) Fund's Monetary International the with comply not did government the unions, of the victory.support electoral the landslidecompensate to Having by in previousthe governments.Backedby Brotherhood CNSLR- the theleft elections won a the Union of Labor (UP) and the Polish Popular Front (PSL). (SLD), Alliance Democratic Left the threeparties: of by acoalition backed Minister as Prime (AWS)in parliamentarythe heldelections on 23 September 2001.Leszek Miller took office Action Electoral Solidarity the against victory landslide a won left the Poland In Nastase. of leadership in the under Romania Union Adrian Hungarians Democratic the coalition with in 2000 elections October Social a In Romania the and formed won Party Democratic 3.1. Left wingcomes to power Twomain integration weresetby promoting of the the goals Nastasegovernment: the introduced reforms the with disenchantment worker on capitalized left Romanian The In beginningthe of in 2000's both countries leftwing governments came into power. CHAPTER 3 49 CEU eTD Collection to consult tradeunions the as well as tofind solutions toretrain workers. theworkersagainstsituations andprotected collective dismissals byrequiringemployers the exceptional only to contracts term of usage law the limited the Also, contract. agreement sign a collective to wasobliged employees one twenty than more exceeds that company enterprisesprivate into social welfare institutions” (National Journal, 2003). representatives of the employer’s Moreover,account. argued thatduring theirwasnotinto negotiations point taken some of the They associationsConstitution. the with complain not did it that and interests their harming was Code the declared that “the new Code(Coman, 2005:24). This fromtriggered protests employer’s associations whichargued that transformed the unionsitleftto trade butmany articles concerning theof employers rights ambiguous government and the relative powerful position of trade unions. Itoffered a series of privileges three years of negotiation.most affected by privatization.the (Bideleux and Jeffries 2007). and profitability wagesthe provisionfor corporate tooutput benefits workers andthe the of The employment,also tax workplace.safety included It system andat the thenecessity linking of Code reflectedcontinuing the structural adjustment. and both investment direct foreign attracting by industry Romanian the of competitiveness the leftRomanianlegislation labor European Itaimedto standards. atimproving the industrial wingthe bring to government the from promises included which orientation agreement term medium a was avoid Thepact industrial action. andto negotiations establishtripartite stable The aimwasto of andthe more jobscreate ininfrastructure from constructions. investments promising to raising The Code was adopted in 2003 and it introduced several important changes. important several itintroduced in and Any 2003 The wasadopted Code followedin Labor Code 2003after arevision the Followingof the 2002agreement, Similar to the Romanian case, a left wing coalition was elected in Poland in in the Poland was elected lefta wing coalition case, Romanian the Similar to issues to it number the covered of extended The was in2002when pact renewed 50 CEU eTD Collection the governmentthe lost in support the from its Parliament junior partner. Following (Avdagic and Miller. Subsequently, the SLD registered an unequivocal defeatin the European elections and Leszek of Primethe resignation Minister andin levels confidence of decreases significant of concluding alarger numberof fixed-term contracts”. and rates possibility the of work overtime thereduction concerning “controversial proposals, the were exit for OPZZ's reasons in them. official The contained changes modest the negotiations by toacceptanyrefusing proposalsthe of forwarded by ingovernment spite of work on a partners. seemed unions to promisingbeginningnegotiations trade asthe Atthe the were common position.making the Commission more representative should have strengthened the social dialogue. However,theory, theby conditions de-politicizing for employers’February associations’ proportional representation in the Commission. In negotiations.in part the Also,take similar membersActadopted to 300000 morewith than 2002,of trade sectoral level and rules changedthe at the nationalrepresentation of level by allowing unions unions,OPZZ bythe at dialogue defectedsocial institutionalized the Commission efficacious.Tripartite on The Act taking them for Economic and Tripartite Commission moreAffairs it representative making by outfrom from thethe Parliament Meardi). and (Gardawski in elections communists and 90'sfadedthe away asfor thefirst time themajority for voted members of Solidarity post- from inherited divide political surpass the5%threshold. seemed that the itAt grassroots, the SLD party communist withdrawfrom and politics afterfailingdecided to Solidarity to direct had representativesautumn of 2001. A majorin change politicalthe landscapewas unions trade that nolonger in Parliament. The OPZZ union ceased to be a partner of the post- At the same time the government was shaken by corruption scandals which led to led which scandals corruption by shaken was government the time same the At In addition,negotiations for anew were code labor by started involving thesocial Immediately after taking office, the labor minister changed the organization of the 51 CEU eTD Collection name”. in businessactivity own their andstart giveof employment toupcontracts force employees introduction of a flat-rate tax through the back door. This will give rise toanother incentive to tothe amounts itbecause owners) business private tax (for flat-rate the with “agree a minimum. According to Janusz Janusz to According minimum. a to Commission intheTripartite its participation reduce to decided and agreement the criticize as forfuture sociala foundation moreencompassing NSZZSolidarno pact. it regarded majorand breakthrough a agreement the considered Theagreement”. government business 2002).Thepactwassemantically activity a “social (EIRO downgraded to agreement on harmonizing taxes and corporate levied taxes on individualsprivate pursuing unionsan trade reached two 2003the by September pactand support the continuedto by guaranteed its representatives. an agreement to legitimacy its “borrow” to waswilling nor timeat that government of unionthe from negotiations. The union not trust did leftthe wing alliance forming the 2002). Solidarno (EIRO representatives As expected, of commission national the consulting without negotiations in participate to union leader of NSZZ Solidarno2003 anewlabor initiative –pactfor and – was social developmentproposed to partners. The push labor for InFebruary the ministercontinued to adoption failed the of a newsocial pact. makewould more social called aso appealing andproduce pacts “alliance of weak”. the and 2006) arelatively Crouch labora weakandweak government movementfragmented The other two unions present inunions The other two present the Tripartite Commission, OPZZandtheForum, the code labor new a for negotiations the After in Poland. happen not did this However, Ğü signed a preliminary declaration stating the willingness of the ĝ niadek, one of Solidarno of one niadek, 52 Ğü ’s exit forced the commission national Ğü ’s officials, the union did not did union the ’s officials, Ğü continued to CEU eTD Collection contributed the least. the contributed position astrong This unions indicates of trade in the negotiations. the contributor tosocial persons becamethebiggest government protectionthe protected while tookplace. of proportions inseen between the The receipts 2002 and 2003amajor shift Figure 3 thedisplays social bytype between 2000 and2008. protection receipts As itcan be family support. and protection child targeted welfare changes Other increases. price tothe becorrelated to pensions other all while year program a three following average national tothe correlated tobe people least of advantaged also the Thepactcent. pensions asked thatthe 20 per income with minimum guaranteed of national increase the inflation the and the to according endedfor of reasons incapability occupational (Mocanu and Mares 2005). is mandate years their after forterms two fulfillingand theirbe fired cannot leaders while union that trade itthe stated andfinally avoid measures redundancies collective to propose down; italso gavethe unionsright some totrade tooppose management’s of decisions and companies to pay 75 norms standardapplyof work andto tradeunions obtain to acceptance the itthem; required per cent of the wage unions: obligationstated the it forinvolve employers unions to trade in upthe drawing to workers if the company several inworkers introduced the medium advantagesfor trade the TheLaborCode term. is temporarily shut These changes have been reflected in the structure of social protection expenditure. in of protection structure social been the have reflected These changes wages sector public the indexation of required the pact social the Furthermore, The social pacts had a direct effect both on the legislation and the benefits received by received benefits the and legislation effectboth the on hada direct The social pacts 3.2. Explaining outcomes the of theRomanian Social Pacts 53 CEU eTD Collection in and the 90’s. democrats unions between thesocial political agreement addition, In the they bring halfaverage, together workforce usedto the of CEE they still abovethe gathered were levels strike fact that the Despite workers. mobilize to capacity the some of lost unions Romanian the trend, European wider a Following efficient. less became workers to benefits and file. membershipfragmentation, and toregain unions the needed influence amongtheir the rank with declining Confronted workforce. ofthe ininterests act the to lacking power the are unions trade the anddeepenedthebelief that unions among workers credibility trade the of legitimizing the unionsthe mechanism.affected recession neededa The1997economic hand inelections. the other socialthe democrats On unions which to support gave trade the period. Thismight be increasedeffect an previous of the the with ascompared government their goals pursue to hadsufficient power in noneof bargainingthem collective andthat interestmajor outside it. Further it suggests that the level of trust between unions and At the same time the strikes and lockouts as tools to force the government to grant The sudden appearance of social pacts in Romania implies that all the actors had a Figure 6:Socialprotection receipts by type(% oftotalcontributions) Romania 10 20 30 40 50 60

2000 0

2001

2002

2003

2004

2005 *Source: Eurostat *Source:

2006 54

2007

2008 Otherreceipts contribution General government social Employer's contributionsocial persons protected Social contribution paidthe by CEU eTD Collection contextualized political exchange which resulted in a win-win situation for both parts. The parts. both for situation a win-win in resulted which exchange political contextualized governmentand advantage took of politicalthe contextfor achieving their goals. On handit other the shows that important concessionsfrom tradeunionsthe the obtained address commitmentof problems the governmentto the by protection sector. raised social the inincreasedin14.6from budget percent to the state 13.7 percent 2004. This 2001 reflects from the allocated of expenditures by social services. The share social benefits the provided mechanism in order to “buy” the social peace and continue with the reforms. use acompensation be issuccessful. Tohad to process to issue government address this the be and simplyoverlooked the that unionsagree needtrade with to privatizationthe if the insider’s cannot thatthe interests privatizedemonstrated to efforts previous of experience the SOE’s whichin 2000’s wasstilllaggingbehind CEEcountries. other However, the A recurrent problem in agenda the of was post-communist government privatizationthe of enter ingovernmenthad to negotiations with socialthe yearfrom each partners 2000 to2003. unions, the with trade the IFI’s,the agreement political and the organizations employer’s investment from Caught between stemming opportunities. better legislation pressure the and by investment. Thisemployer’s wassupported position new also associations which required more for foreign opportunities create and marketflexibilization problem labor the of utilities). for subsidies children, for aid school guaranteed minimum income asgrantingsocial aswell benefits them (tax exemptions, other byincreasingthe workers advantaged by faced least the problems addressed thepoverty the tripartite institutions.stop required strikes to the unions intheindustrial and sites through channel their demands As a sign of trust, immediately after taking office the government a of consequence 2000’sthe are after Romania in emerging pacts The social and coverage the increaseof the by was government the The mechanism chosen institutions financial (IFI’s) The international address the Romania required to 55 CEU eTD Collection between theleftand the unions which forgedwas during made elections opportunistic Further, specific for all towards advantages provided claims which parts. themutual trust none that of them wouldoff bebetter by negotiations.exiting the the bargainingThis oriented center. itcloser tothe main message bymoving which its alsoshifted in decline followed electoral steep support a following party 2004 the of party.the scores in electoral However, inthe the was reflected messagewhich with this for the support the incoming miners of inBucharest 1999. Partof resonated workforce the Romaniagain from to –tried votes unsatisfiedthe workers. Itwas declare firstthe party to wing– theGreat unions.party Until solutions trade 2000 theright became tothe unappealing pacts. social social beget pacts argues that mid 2000’s.with isconsistent This Avdagic’s in who analysispacts social Europe (2005) of governmentand unions. In the trade consequence wewitness multiplication theirup until the involvedsolve tothemutual contributed between actors issues and to specifictrust the policy unions).for trade membership the decline functionalAlso tothe need of the they responded for government; the improve re-legitimizing, the situation rankthe of andfilethe stop and interests of the actors involved (privatization in negotiationstripartite whichendedand with a national agreement. complying with the requirementsSocial pacts allowed unions defendto worker’s grievances and toparticipate for the first time of IFI’s 2004. As Figure 1shows after 2004Romanialeftbehind in Poland privatizing SOE’s. the involvement unionsof trade the isthe Sidex factory steel Galati which was privatized in years. budgets for the with An privatization successful draining state the of example somewere which big andprivatized companies reforms the of continued government Tosum up, the balance between of power trade unions andtheensured government illiberal bargaining the the that was of institutionalization effectof An interesting the From of view pointthis thesocial pacts emerging inthe 2000’s served specific policy 56 CEU eTD Collection status of movement.status of mobilize By as losing Solidarity around a union theirability to workers the farascontesting as 1994)wenteven (Jackiewicz needs. authors by grassroots Some the unions workplace.the at Their ismostly influencedby agenda national lessand the politics with the contact lost confederations national the decreased dramatically.Concomitantly strikes of because lost days of working number in the Table that The data workers. 3show movement. Mistrust in unions bargain management. preferred to the directly with workers at the asplant representing level Generallybackfired management’s agree unions the with notconsider position do and workers unions their on and 2004). arerare ratherformal (Gardawski than substantive bargaining agreements interests.their capacity makinginfluencecollective decision andno that onthe generally hadlittleor unions Rather to mobilize thanpassive bymid90’s. A survey levelon firm union inactivity 1999 reported at the that using the resource. Tradebecame leveland relatively influence atthe unions losttheirenterprise unions to channel theirpower,into in nosuch makesPoland happened.thing Sowhat thetwocasesdiverge? grievanceslevel. Yet, while in Romania national tripartite agreements emerged once the left parties came for unions’levels movementunion support and decliningworkforce national the at demands until early 2000’s: fragmentation lowinstitutionalization, levels of and politicization of the years.extended electoral the outside union benefitsdetrimental to iscan leadorganization but cooperation given the that to automatically not is labor the of involvement political the Thus appear. to likely less behavior The years between 1996 and 2000 were a period of between 1996 The years of period labor and 2000werea pacification Polishthe of strategic SOE’sback,the of privatization Looking the important of labor an deprived up in Romania one the to characteristics similar displayed in Poland dialogue Social 3.3. Explaining absence the of Social Pacts in Poland 57 CEU eTD Collection work related issues the national unions lost the power to exercise asignificant to power the lost unions issuesnational relatedthe work unilaterally unilaterally by governmentthe with only a consultative role unions from trade the side. than the rule exception the in wasrather Bargaining led absenceof social Poland. pacts the Polish state to and was limited to wagewas on agenda. the pact agreements. indicativeBetween four havebeen wage 1997 and 2000 agreements butnosocial reached Wider inactive. mostly been has institution the in1994, adoption formal its Despite Commission. policy reformsuse to the decidednot have because unilaterally governments states successive CEE were adopted(Avdagic thatthe 2003)contends tripartite negotiationsamong inPoland arethe poorest the Avadgic opposition. signaled labor organized whenever Parliament the to directly legislation related work institutions andtake by-pass tripartite to state the (Figure the Thisallowed 2). remained fairly transition stable capacity of the Polishthe unions state declinedthroughout Polish the of capabilities political and organizational the While in Poland. actor powerful nounions. bargaining acredible Outside state-labor treat is necessary. agreements as they tripartite weresign to incentives able any have not did to implement governments the Therefore unemployment. their policies without the agreementhigh due levels andmeasures fiscalto thepersistent of also committed to austerity of the trade have been because governments successive happened transition. This inertia during asignificant displayed wagegrowth labor quiescence case. in from Polish the Aside fulfilled was conditions of these None 2006). (Marginson andMeardi growth wage and excessive unrest labor of arise after periods social pacts Historically outcome. influence over the actual governmentandbringthe negotiation theirthe table. to agenda To conclude, loss the membership baseof the coupled with positiona strong of the most the been always has state the that namely point, final the to me brings This an bargaining have the entering partners the when areaviablestrategy Social pacts 58 strike threat on CEU eTD Collection out of populist tendencies the Romanian governments have been more responsive to the to responsive more been have governments Romanian the tendencies populist of out Romania thanin Poland. Partly because of theirincapacity actby to themselves and partly demands. From this point of view, strikesgoals than which Polishgovernments the made themmorelikely respond unionto to as tools to attain particular goals worked better in governments. unionsformulate which them demandsallowed better to and exerciseinfluence more onthe through informalRomania be preferred theunions politically to involved anddirecttheirmostly preferences channels.union weakness.At the Fromsame this time point transition. of onset the at position theytheir of out played unions view how on dependent werethe two morecountries pragmaticinfluence is their Rather negative. be asequally considered cannot of legacies unionism stand at the oppositethan organize afterwards. the that This to workers transition improvedtheir suggests opportunities the sides. Polish In in positionkeep a government strong earlyphases of the membershipagainst to the baseand traditional their preserve to choosing By policies. government the towards tendency a conservative kept unions the inRomania confederations the of position the and preferences between worker’s apro-reform which gap deepenedthe Polandposition unions adopted trade in Whereas ways. invery different actors toother relative their position they perceived that workplace is in and atthe their played variation roles howunions there out that anoteworthy Eastern Europe are as weak as the literature on industrial relations expects them to be. I found Romania and Poland andmore generally examineto whether unions the in Central and By theRomaniancomparison werelessgovernments capable of achieving their policy Furthermore, the political of involvement trade the unions doesnotbyitself determine The aim of this thesis was to sort out what explains the position of trade unions in CONCLUSION 59 CEU eTD Collection . unions and remainedstrong usedthis position achieve to their goals. labor’s Romanian account. politically into take always the This showsthat to position tried governments the transition throughout hand other the On populism. government and activism had fulfilled theirdemands by governmentthe which a viciousopened cycle between union never unions Trade weakness. labor of sign a considered be might mobilization constant hand by institutional infrastructure influenceusing their workplace. atthe lack for the an of compensated unions as itwas thecase trade the Romania, of environment, these influencedshowschoices its afterwards. It in that position institutionalizeda poorly how and by labor of in madewere the choices transition early periods whatthe revealing trust factor inreaching handother and government anagreementbetween akey unions wasthe position strong relatively their and interests policy common define to unions of capacity wasthe mattered communism.been argued has what As it with post- associated difficulties the and overcome interest define acommon potential to the has movement labor Romanian the that prove They strength. relative union of instances demands of tradeunions.the which actors gained twothe during electoral the campaign on previousthe year. Further the thesis unfolded two facets of labor mobilization in Romania. On the one the On Romania. in mobilization labor of facets two unfolded thesis the Further This totheindustrialpaper contributes literature on relations Romania andPoland by The emerged as social pacts which endstand inRomania atthe out of transition 60 vis a vis the government. On the On government. the CEU eTD Collection Crowley,Stephen.''Explaining Labor Weakness in Historical Post-Communist Europe: Colin. Crouch, Beverly,Crawford, Lijphart, and Arend.''Explainingin andEconomic Political Post- Change Cerami, inAlfio.''Central Europe Transition:emerging models of welfare andsocial Carey, Frank H. Blazyca, George, and Rapacki, Ryszard. ''Continuity Policy: in Economic Change and andPolish Ryszard.''Continuity Rapacki, George, Blazyca, Bideleux, Robert, and Jeffries, Ian. Jeffries, and Robert, Bideleux, Berger, Suzanne. Balcerowicz, Leszek. Balcerowicz, Avdagic, Sabina, and Crouch, Colin.''Organized Economic Interests: Diversity and Change in '' ———. ———. ''State-Labour Relations in East Central Europe: ExplainingVariations Union in Europe: Central inEast Relations ''State-Labour ———. Avdagic, '' Sabina. Ahrend, Rudiger, ''Creative Martins and Destructive Joaquim Destruction Oliveira. or USA. 1993. Europe.'' 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