Introduction

In most Continental European welfare systems the state ‘shares public space’ (Crouch 1986) with the social partners , employers and trade unions , over such public policy areas as employment regulation and social protection. Corporatist participation of social interest groups in public policy-making has a long tradition in Continental Europe. Since the first Bismarckian reforms in response to the ‘workers question’ by mandating social insurance in the late 19th century, employers and workers received representation in the self-administration in return for their contributions to these parafiscal funds. The Bismarckian social insurance principle with strong reliance on co-financing through social contribution and bipartite self-administrative governance became also the dominant model for and distinct feature of Continental welfare systems. Esping-Andersen 's typology (1990) acknowledges this ‘corporatist ‘ legacy of Conservative welfare (state) regimes.

Given participation in Bismarckian self-administration , the social partners can play an important role in coordinating policy initiatives and implementing welfare reforms. However, these organized interests can also provide obstacles to reform as they defend vested interests and block changes in the status quo (Ebbinghaus and Hassel 2000). Even when cooperating and negotiating reforms, the social partners can still pursue rather narrow self-interests, externalizing the costs of their actions onto non-participating third parties or the public at large. However, unilateral action by the state without the social partners ‘ consent often meets their resistance, which can lead to large-scale mobilization against government reforms. Despite long-term losses in union membership and estrangement between unions and allied political parties (Ebbinghaus and Visser 2000), trade unions remain important political and social actors in most Continental European countries (Scarbrough 2000). In fact, public status through erga omnes extension of collective bargaining and self-administration of social insurance give an institutionalized role to the social partners .

When the state shares public space, it usually lacks the legitimacy, competencies, and implementation capacity to single-handedly carry out desired reforms of social and employment policy. Therefore, formal or informal forums for tripartite social dialogue between the government and the social partners facilitate the development of a shared understanding of problems, the discussion of policy alternatives and their implications, and the negotiations of a consensual response (Ebbinghaus 2001).