Weakening codetermination? Works council reform in West Germany in the 1980s

Stewart Wood

No FS I 97-302, Discussion Papers, Research Unit: Economic Change and Employment from WZB Berlin Social Science Center

Abstract: Codetermination (Mitbestimmung) in (West) Germany has been one of the mostcontroversial areas of political and economic conflict. When the CDU-led coalition came to power in 1982, there was a widespread expectation that the powers and privileges enjoyed by works councils (which had been significantly extended by the outgoing coalition of Social Democrats and Liberals) would be restricted. The only significant legislative assault on the institutions of Mitbestimmung, however, came inthe form of two relatively minor initiatives - to reform works council electoral law(Minderheitenrechte) and to set up representative bodies for 'middle management'within firms (Sprecherausschüsse). Despite strong backing from various elementswithin the coalition, however, these proposals, although eventually approved by Parliament, were significantly diluted in the consultative process, and in their final form have had almost no impact.This paper examines the passage of these two proposals as a way of addressing thebroader question of why 'neoliberalism' (in particular the anti-union agenda) made solittle progress in West Germany during the 1980s. It rejects the common political science explanation that policy radicalism in Germany is inhibited by federalism and a culture of consensual policy-making. In its place, it suggests two factors that are responsible for frustrating radical change. Firstly, the complex bargaining betweencoalition partners that was required to construct a legislative majority entailed aseries of trade-offs that watered down the main thrust of the two proposals. Secondly, more significantly (and from an Anglo-American perspective more surprisingly), German employers were opposedto the very reforms that theconservative government claimed would advantage them. This opposition can onlybe understood by examining the distinctive incentives and constraints facingemployers in a co-ordinated production regime

Date: 1997
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