Two fundamental concepts of economic performance and employment :
• neo-classical : quantitative criteria (prices and costs)
• institutionalist : qualitative criteria (product innovation and product quality).
Contrasting implications for social dialogue :
• neo-classical : minimisation of costs = deregulation
• institutionalist : maximisation of quality (long-term investment, skills formation) = regulation and concertation.

Thesis
In formulating and implementing economic and employment policy, social dialogue is superior to the neo-liberal strategy of making the market into the central mechanism of economic and social coordination.

Theory
Social dialogue improves economic performance and employment in at least four ways :
• more information upon which to make sound decisions
• stronger commitment to decisions
• better productive efficiency
• easier adjustment to changing circumstances.
Good practices : in good, bad and changing times
1. Good times : the '30 Glorious' (1945 – 1975) in Europe
After World War Ⅱ ‘Fordist' social pacts in Europe led to the regulated distribution of increasing wealth between capital and labour.
Key elements :
• high productivity : mass production for mass consumption
• distribution of productive gains :
• on company and sector level : profits / wages
• on national level : social security, high quality education
• institutionalization of social dialogue :
• on company level : from enterprise committees to codetermination ( Germany )
• on sector level : bipartite committees for wages and working conditions
• on national level : social and economic councils (bipartite and /or tripartite).
Growth, full employment and social security were both cause and effect of this general settlement.

2. Bad times : the 1990s social pacts in Europe
Two components of this settlement evaporated in the 1980s : growth and full employment.
Economic thinking U-turned from a macroeconomic full employment policy to a price stability macroeconomic policy.
Interest in social pacts revived in the run-up to the European Monetary Union : how to reconcile ever higher unemployment rates with cuts in public spending in order to respect the EMU-criteria ? Therefore, the new social pacts of the 1990s were tripartite agreements about wage restraint in exchange for employment.

3. Changing times : the current competitive reforms in Europe
Serious efforts are currently being made in Europe to adapt economic and social policy to the profound changes affecting the world economy (internationalisation, European integration, post-socialist transformation in Eastern Europe ).
In this context, the purpose of social dialogue is to achieve adjustment through concertation in order to :
• reduce the uncertainties felt by investors, employers and workers
• foster acceptance of restructuring decisions.

Success factors
1. There should be a firm basis of mutual trust.

2. Trade unions (and employers' associations) must have the capacity to commit themselves to the conclusion of agreements and the monitoring of their implementation. Therefore, they have to be highly representative.

3. Social dialogue must offer a prospect for trade union action. The primary role of trade unions is to defend workers' rights and interests in relation to employers and public authorities. Via concertation as much and as long as possible, through action when necessary. Agreements and compromises must refer to key values capable of mobilising support.

4.Social dialogue must not focus only on the interests and strategies of the collective protagonists. It is equally important to consolidate the social dialogue. The more concertation becomes rooted in procedures and institutions, the more compromises will become a matter of routine.

5. Collective agreements and social pacts must lend themselves to the programming of economic and social development in the medium to long term. This is another reason why social partners require reciprocal trust for they have to give undertakings in relation to a policy which conditions their strategic choices.
At the moment, Ireland and Finland are proving the virtues of (long-term) concertation