Conclusions: Flexibility as an analytic concept

This chapter has described the specific constellations of employment flexibility and rigidity in the case of Germany and Japan and their political implications in some detail. Against this background it is now possible to reflect briefly on the merits and potential drawbacks of the flexibility concept used in this study. Sceptics may argue that flexibility may in some instances be too vague a concept because it can only catch parts of often highly complex reform decisions. For instance, labour markets are closely related to welfare arrangement and many welfare schemes are directly linked to concepts of standard employment or Normalarbeitsverhältnis. Reforms that affect the latter may thus not necessarily be prompted by concerns for flexibility but other motives such as cost containment. In the case of the so called Hartz IV reform in Germany, marginal employment expansion and unemployment insurance reform go hand in hand with the main aim to increase employment levels while limiting public spending.

In Japan surveys show that a majority of married female part-timers –at least initially- value the fact that they need not worry about social contributions as they are already covered by the corporate welfare schemes of their husbands. Hence, tax codes and the family insurance model underlying pensions and health insurance are also important factors to consider. In Germany in particular the problem of persistent structural unemployment has arguably been the main motor (at least rhetorically) for virtually all labour-related legislative initiatives since the 1980s. So by not taking into account the immediate context of decisions, aspects and factors

will inevitably be missed or portrayed. Yet, there is good reason to expect that even in those cases where labour market flexibility has not been the primary concern for policy-makers; it has been part of their considerations. It seems reasonable to expect that all decisions of the 1990s and 2000s have been considered on the ground of whether or how they affect labour market flexibility. Decisions with potentially negative effects on flexibility would either have been avoided or moderated in their impact and such constraints should become clearly visible in a analysis that spans over more than two decades. One could interpret this as an implicit “flexibility constraint” of labour market politics since the 1980s. More importantly, the next chapters will show that all major labour market reforms have been discussed in the context of flexibility and employment security. Although linkages to welfare and tax policies play a role in some instances, in general the flexibility concept captures the reform dynamic rather well. It is therefore a sensible alternative to conventional approaches which focus mostly on linkages abut pay little attention to the particular reform dynamic of each policy field.

Another crucial advantage of the flexibility concept used here is that it allows detailed assessments of the content of reforms as well as processes while avoiding the vagueness and deterministic connotation that plagues concepts such as deregulation or marketisation. Moreover, the analysis can avoid the limits of quantitative measurements of key labour market characteristics such as corporatism, labour strength60

There are of course flexibility-related decision-making processes that have to remain outside the scope of this study because they concern mostly the micro level and industries where data is less comprehensive. Yet, the wide parameters of the concept of labour market flexibility at least allow including changes on the three main levels of labour market regulation in which labour market regulation is set and it thus includes the main political dynamics and arenas of decision-making and legislative reform. Major shifts on the micro level will also over time affect actors on the meso and macro-level, especially if these developments are at odds with the

or coverage of collective bargaining which may not give an adequate indication of the actual differences between countries.

60 _{This is not to imply that quantitative studies do add to the understanding of reform processes in the realm of}

labour market policy. Yet, the issue that many central indicators for capitalism and political aspects of labour market policy commonly used are problematic and not reliable is a problem which affects labour market research in particular. Despite a wealth of data and surveys, the complexity and heterogeneity of arrangements are difficult to capture quantitatively. Corporatism scales demonstrate this particularly well. Depending on the indicator, Japan is judged anything from highly corporatist to decidedly pluralist. See Kenworthy (2003).

existing institutional arrangements. This means that even though not directly observed, the aggregated impact of micro-level changes is part of the analysis.

Some readers may also object that flexibility enhancement measures taken at different points of time and different LoRs may not be intentionally related or directed at each other. For instance, flexibility-enhancing agreements in some industries may simply be due to technological changes which require, for example, less rigid working time schemes. These changes, however, may then later be used for promoting a specific policy agenda pursued by a government pursuing a liberalisation strategy. However, this study does not rest or depend on the assumption that all decisions at the various levels of non-liberal labour market arrangements are always consciously connected and used strategically. Rather, it assumes that all decisions necessarily mirror the institutional framework in which they are taken. Moreover, the interplay provides important clues for assessing the scope and depth of institutional change and continuity. For example, if several LoRs offer competing regulatory answers, then this would mean that the framework is not stable and in a process of fundamental institutional change.

In summary, it can be said that the concept of labour market flexibility is both theoretically plausible and stringent as well as empirically useful for analysing the incidence and scope of labour market reform. It takes account of the fact that in complex institutional environments, decisions rarely boil down to clear-cut choices between two concise formulated alternatives. And it allows to capture cases of intentional, strategic as well unintentional institutional interaction which provide alternatives to legislative reforms. This is crucial because although political science research routinely treats only legislative acts as political, in reality non-regulation and soft and implicit forms of regulation are equally part of the politics of labour market reform.