This chapter deals with the impact of austerity and, more broadly, neoliberalism on one of the mechanisms used by labour to shape or modify the political-economic environment that it encounters in its dealings with capital. We refer here to social concertation as an umbrella term encapsulating processes and institutions of social partnership/social dialogue/social concertation/and neo-corporatism. Labour has other instruments. These include political action – either through endorsement or participation in political parties representing its interests, or through lobbying or otherwise seeking to influence political decision makers; direct action of various types – general strikes, boycotts, civil disobedience, use of legal processes and the courts; and various forms of industrial action. Here we focus on one aspect of labour's representative role. Through unions, or trade union federations at various geographic scales, labour has engaged in joint negotiations or discussions with employers’ federations and the state in processes and institutions designed to promote cooperation on various policy issues through partnership and dialogue.

As Guy Standing noted (1999, 43) regarding voice regulation of labour markets, these arrangements will work best where there is a relatively even balance between the social actors. Without such balance capital will see little need to participate (arguably this is the Canadian case); or the structure will simply be an exercise in which the weaker party (labour) receives symbolic recognition but whose participation functions mostly to legitimate decisions over which it has little control. One of the ingredients for the success of this type of regulation is the ‘shadow of the future’ – the realization by all sides that they have to deal with each other on a continuing basis, and hence that the maximization of some short-term advantages may not be desirable. Absent that, little meaningful dialogue or partnership can occur, though top-down concertation remains a possibility.

Various forms of social concertation between trade unions, capital and the state emerged in much of Europe in the process of post-war reconstruction. Over time, a variety of terms have been applied to the practices of social concertation including corporatism, neo-corporatism, tripartism, social dialogue and social partnership. These are, in essence, an institutionalized process of social dialogue expressed through ‘institutional arrangements … that directly involves major interest groups in policy development and implementation’ (Bradford and Stevens 1996, 146).