Public Employers as State Actors: The Political Economy of Public Sector Wage Setting in Germany

Donato Di Carlo

Following on from a dissertation completed in spring 2019, the project analyzes the institutional and political determinants behind the adoption of wage policies in the German public sector within the context of the European Economic and Monetary Union (EMU). While the neo-corporatist literature in comparative political economy (CPE) has studied the characteristics of export sector wage setting extensively, much less is known about the political economy of wage setting in the public sector. The project puts emphasis on the inherent fiscal nature of public sector wage setting and focuses on the central role of public employers as wage setting actors embedded in the institutional matrix of the state. It relies on actor-centered institutionalism to bring together insights from CPE, public finance, fiscal federalism, and industrial relations theory. In light of the limited policy options in the EMU, the project argues that public sector wage policy plays an important and hitherto neglected role as a key instrument of economic governance for country-specific stabilization or destabilization. Project duration: October 2019 to September 2023.