ILPC 2027

 The change or sustained stability of the institutions governing capitalism has been a central theme of debate in the political economy literature over the past two decades. Initially, the analysis focused on the resilience or transformation of institutions as the formal structures and rules governing the economy in a context characterised by common trends of intensified competition, market integration, and financialization (Kitschelt et al. 1997, Hall and Sockice 2001). Hence, the focus was on (mostly national level) reform processes and on the role of diverse actors (employers, unions and policy-makers) in these processes. More recently, however, the analysis has shifted to the actual functioning of these institutions and several contributions have shown that significant processes of institutional change can occur also within an unchanged formal framework (Streeck and Thelen 2005, Baccaro and Howell 2011). Hence, the focus has moved on how actors actually behave within an institutional framework and how these institutions actually work in practice. Within this discussion, issues of institutional avoidance and arbitrage have acquired a higher profile and one key trigger of institutional change has been found in vertical disintegration processes (Wagner 2015). Indeed, several contribution have highlighed how outsourcing and externalisation have opened up new routes for employers to evade such institutions without having to contest them (Greer and Doellgast 2016). Two points, however, remained rather marginal in the discussion. First, the fact that processes of vertical disintegration have promoted institutional change through the diffusion of explicit violations of institutional contrains by creating opaque spaces in which the responsibility was uneasily attributable.Secondly, the role of the State in creating the conditions under which such violations have been possible and less easily punishable.

This contribution illustrate these dynamics through the analysis of eroding collective bargaining institutions in two sectors heavily affected by vertical disintegration processes, the logistics and the meatpacking industry. We will show that vertical disintegration has enabled employers to reduce labour costs and increase flexibility by accessing to a labour market in which institutional constrains are continuously violated. Moreover, processes of externalisation have made it increasingly difficult for both inspective bodies and trade unions to assert responsibility for such violations and apply sanctions. Lastly, we will show that the State has contributed a great deal to this process, by making it easier for employers to externalise and more difficult for inspective bodies to punish violations. The contribution is based on semi-structured interviews with key informants and the analysis of relevant documents.