How the Swedish Model of Labour Relations Evolved

In English This paper relates the evolution of Swedish labour market institutions to two types of long-term changes in open economy constraints: technology shifts and variations in level of exposure to competition in world markets. The analysis suggests that labour markets institutions should be looked upon as endogenously determined phenomena. The historical process that produced a highly centralised bargaining structure and a set of values that gained hegemonic status and became constituent parts of Swedish model of labour relations grew out of, and was eventually dismantled as consequence of, a basic conflict between competitive and sheltered industries. The specific nature of this conflict and thus its effect on labour market institutions varied as the economy moved between phases that differed with respect to direction of investment and to level of openness in the world economy.