Institutional Environments, Employer Practices, and States in Liberal Market Economies

This article draws on the new institutionalism in economics, sociology, and political studies in order to establish a foundation for analyzing how states shape employer human resource management and union relations. It then reviews and extends the available literature on this topic, establishing how, in addition to legal regulation, states help to shape the cognitive and normative rules that undergird employer decision processes, the social and economic environment within which employers act, and ultimately, the relations of authority constituting the employment relation itself and hence employer policy orientations. The article concludes with a discussion of the prospects for state policy initiatives in view of established employer paradigms, institutional logics, and state traditions, and identifies possibilities for further work in this area.
A neoclassical world would be a jungle, and no society would be viable. Douglas North (1981:11)