flexicurity: a conceptual critique

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2011 17: 75European Journal of Industrial RelationsLuigi Burroni and Maarten Keune

Flexicurity: A conceptual critique

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Flexicurity: A conceptual critique

Luigi Burroni Università degli Studi di Teramo, Italy

Maarten KeuneUniversiteit van Amsterdam, The Netherlands

Abstract‘Flexicurity’ has become an influential concept in academic and political discourse, in particular since the European Commission placed it at the core of the European Employment Strategy. However, the concept is underdeveloped and suffers from a number of serious shortcomings. In this article we discuss a number of its problematic features. In particular, we focus on four aspects: its ambiguity and openness to political capture; its failure to problematize the creation of institutional complementarities; its lack of attention to conflicts of interest and to the heterogeneity of the labour market; and its reductionist view of the sources of flexibility and security. We illustrate this discussion with a series of empirical examples. Finally, we conclude that the flexicurity approach should either be abandoned, or be substantially improved.

Keywordscomplementarities, employment policy, European Employment Strategy, flexicurity, industrial relations, labour market policy, social policy

Introduction

‘Flexicurity’ has become an influential concept in academic and political discourse. It is intended to broaden the analysis and policy debate concerning the labour market, the welfare state and their interaction. It focuses on the so-called flexibility–security nexus and argues that both dimensions can increase simultaneously. As well as stimulating a vast amount of academic research, flexicurity has moved centre-stage in the policy com-munity, in particular since it became the core concept in the European Employment Strategy. However, both as an academic and a policy concept, flexicurity is underdevel-oped and suffers from a number of serious shortcomings.

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European Journal of Industrial Relations

17(1) 75–91© The Author(s) 2011

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DOI: 10.1177/0959680110393189ejd.sagepub.com

Corresponding author:Maarten Keune, Amsterdam Institute for Advanced Labour Studies, University of Amsterdam, Plantage Muidergracht 12, 1018 TV Amsterdam, The NetherlandsEmail: [email protected]



76 European Journal of Industrial Relations 17(1)

In this article we critically review the flexicurity concept and discuss a number of its problematic features. In particular, we focus on four aspects: its ambiguity and openness to political capture; its failure to problematize the creation of institutional complementa-rities; its lack of attention to conflicts of interest and to the heterogeneity of the labour market; and its reductionist view of the sources of flexibility and security. We illustrate this discussion with a series of empirical examples.

In the next section we place the emergence of flexicurity in historical perspective and outline its main features as presented in the literature. We then discuss the four aspects mentioned above. Finally we present conclusions as well as suggestions on how to strengthen the flexicurity approach.

Labour market and welfare regulations in historical perspective: From security to flexibility to flexicurity?

From the late 19th century, European countries developed extensive bodies of labour market and welfare regulations. In Western Europe, until the late 1970s, these were ori-ented towards ameliorating the ‘social question’ and had largely protective and security-enhancing objectives. Labour market regulations were to protect workers from the excesses of capitalism and the uncertainties of the market, and to redress, to some extent, the power imbalances between workers and employers (Crouch, 1999). The welfare state aimed to reduce the dependency of citizens on the market for their well-being, by provid-ing protection against such risks as poverty, illness, disability and old-age (Esping-Andersen, 1990). The state came to play a key role in the labour market by pursuing full employment through demand management and public sector employment. There was, however, cross-national diversity in the extent to which these objectives were pursued and achieved, and in the way labour market and welfare institutions were shaped. After 1945 the countries of Central and Eastern Europe (CEE) were incorporated into the state socialist block, developing their own type of labour market and welfare regulations imposed by the state.

Since the late 1970s, the security-enhancing trend was gradually reversed (Ferrera, 2005). In the context of the accelerating globalization of the economy, mounting unem-ployment and inflation, the ageing of the population and the collapse of state socialism in CEE, there was an ideational shift towards neoliberalism and monetarism. In the new dominant discourse, supply side economics started to replace demand economics, the market replaced the state as the core mode of governance, and enterprises were argued to need high levels of flexibility to adjust to and compete in the global market. With the neoclassical market as the ultimate inspiration, the state increasingly became a ‘competi-tion state’ (Jessop, 2002), to which social progress is subordinated to and dependent on economic success. Labour market and welfare regulations became regarded as interfer-ences with the proper functioning of the labour market and sources of undue dependency on collective welfare provisions. As a result, the main trends in labour market regulation became the adjustment of labour supply to the requirements of the market, deregulation and rising labour market flexibility (OECD, 1994). Also, wage moderation aimed at strengthening international competitiveness became the norm in wage bargaining (Keune, 2008a). At the same time, welfare state reform focused on its productive rather than its



Burroni and Keune 77

protective function and on increasing labour market participation of the inactive and reducing their dependency on the welfare state (Hudson and Kühner, 2009; Serrano Pascual, 2009).

In recent years, attempts have been made to develop approaches that marry these two opposing trends by fostering labour market flexibility and high rates of participation on the one hand, and providing protection and security to individuals on the other. This preoc-cupation stems partially from normative concerns with social exclusion, but is also due to increasing awareness of the links between competitiveness and social progress. Intensified international competition has created consensus that firms in western economies can no longer afford competitive strategies based on simple cost reduction and low quality (Hall and Soskice, 2001). Indeed, increasingly success in the global economy is seen to require innovation and improvements in quality and productivity, which then require a highly skilled and motivated labour force. Hence the goal of competitiveness is argued to require a ‘balance’ with social cohesion and security. Probably the first major example of this trend was Delors’ White Paper on Growth, Competitiveness and Employment, but exam-ples can be found also in national strategies like Blair’s Third Way.

The concept of flexicurity entered the academic and political discourse in the late 1990s. The most widely followed definition paints it as ‘a policy strategy that attempts, synchronically and in a deliberate way, to enhance the flexibility of labour markets, work organization and labour relations on the one hand, and to enhance security – employment and social security – notably for weaker groups in and outside the labour market, on the other hand’ (Wilthagen and Tros, 2004: 169; see also Klammer, 2004; Muffels et al., 2008). According to these authors, flexicurity aims to reconcile the strong demand for further flexibilization of the labour market, stemming from competitive concerns, with an equally strong demand for protection of employees, especially vulnerable employees, stemming from concerns with social cohesion. Or, to phrase it differently, flexicurity is a form of coalescence and synchronization of economic and social policy and a system of joint and mutual risk management for workers and employers (Wilthagen and Bekker, 2008). It aims to create win-win situations to the benefit of both employers and workers, based on consensus between these two groups. Rather than viewing flexibility and secu-rity as opposites, it is suggested that powerful complementarities and mutually reinforc-ing effects may exist between the two (Wilthagen, 2005; Wilthagen and Tros, 2004). Four major ‘flexicurity pathways’ are presented as functional equivalents to pursue flex-icurity objectives in different national situations. All involve, with varying emphasis, five mutually supportive components: flexible and secure contractual arrangements; effi-cient active labour market policies; life-long learning; modern social security provisions that contribute to increasing mobility on the labour market; and social dialogue (Bekker and Wilthagen, 2008).

Hence, flexicurity is claimed not to prescribe a one-best-way solution but a range of possibilities or combinations. A number of commentators claim that this lack of specifi-city is an advantage or even essential. For example, Rogowski argues that flexicurity needs to remain an aspiration rather than a concrete policy, and that ‘for the success of flexicurity policies it seems crucial that the definition of the term flexicurity remains vague so that it can be used to address a range of sometimes contradictory policy goals’ (2008: 86). Jørgensen and Madsen (2007) argue that, at least from the point of view of




political discourse, the most attractive aspect of flexicurity is its ambiguity. In this conception, flexicurity is a beacon that guides policy-makers in the right direction by inspiring them to take a holistic approach, to explore interlinkages between policy fields and to aim for balanced strategies and outcomes.

In our view, the flexicurity approach is an interesting attempt to overcome some of the limits of the deregulation discourse of the 1980 and 1990s and to broaden the debate on labour market and welfare state reform. However, it suffers from a series of weaknesses that shed doubt on its conceptual soundness. Also, as we will see below, many empirical exam-ples show how difficult it is to design and implement reforms that appropriately balance flexibility and security. In the following sections we consider in particular four problematic features of flexicurity: its conceptual ambiguity; its failure to problematize the creation and maintenance of institutional complementarities; the difficulty of reaching consensual win-win solutions; and its restricted view of the sources of flexibility and security.

The ambiguity of the flexicurity concept

Although many authors regard the ambiguous nature of flexicurity as a strength, we see it as a weakness, for several reasons. First, as one of us has demonstrated, because of this ambiguity, diametrically opposed views on labour market problems and solutions can be plausibly argued to fit the flexicurity philosophy (Keune and Jepsen, 2007). For exam-ple, both the Rehn model (Rehn, 1988) and the diversified quality production (DQP) model (Streeck, 1991) can be identified with flexicurity, even though they are dramati-cally different. The former combines extensive external flexibility through low dismissal protection and high geographical mobility to the benefit of employers, with security for employees provided by full employment, generous unemployment benefits and active labour market policies. DQP rather builds on strong job security, continuous skills upgrading and high internal and functional flexibility. The fact that such fundamentally different models can be aligned with the flexicurity approach calls into question its utility as a guide to policy.

Second, this ambiguity has, at least at European level, led to a situation in which almost all actors (Commission, Council, Parliament, European Trade Union Confederation, BusinessEurope) endorse the importance of flexicurity to address Europe’s labour mar-ket problems, but at the same time have very different views on how to translate the abstract concept into policy. What is more, their respective positions are largely their traditional ones now presented under the heading of flexicurity (Keune, 2008b). A good illustration of this is provided by the positions on flexicurity of the European Trade Union Confederation (ETUC) and the main European employers’ organization BusinessEurope.

In 2007, a few months after the Commission produced a Communication on flexicu-rity, the European social partners presented a joint analysis of the challenges facing the European labour market. This document states that ‘the European Social Partners recog-nise that in today’s labour market it is necessary to improve policy measures which address both the flexibility and security dimensions for workers and employers alike. Applied in the right way, the flexicurity approach can create a win-win situation and be equally beneficial for employers and employees’ (ETUC et al., 2007: 53). This would




seem to express an agreement on the importance of flexicurity for labour market reform and a willingness to engage in social dialogue on this issue.

But to what extent do both sides indeed agree on flexicurity and it implications, and what are the chances that they will agree on more specific labour market reforms that go beyond these very general statements? From a detailed examination of the position of the two sides on the various elements of the flexicurity debate (Table 1), it is striking that they seem to disagree on most key aspects of the flexicurity debate. This starts already with their general diagnosis of the problems of the labour markets in the EU. BusinessEurope claims that Europe’s labour markets need more flexibility to allow com-panies to be competitive, while ETUC claims that the main problem is excessive flexibil-ity that leads to precariousness. Where flexicurity is concerned, for BusinessEurope this is about adaptation to the market while for the ETUC it is also about human, social and sustainable development and better jobs. BusinessEurope pictures employment protec-tion legislation, a key issue in the flexicurity debate, as hampering job creation while the ETUC sees it as a factor that rather allows for proper adaptation to labour market changes, that prevents unfair dismissals and that acts as an incentive for investment in human resources. Also, BusinessEurope underlines the need for and advantages of flexible con-tracts while the ETUC wants them to remain an exception. In addition, BusinessEurope argues for ‘employment-friendly’ unemployment benefit systems that foster a quick re-entry of the unemployed into the labour market, while the ETUC argues for comprehen-sive and generous welfare systems.

Clearly, the positions of the two social partners concerning flexicurity and its ele-ments are worlds apart and represent the ‘traditional’ views of capital and labour. The flexicurity discourse has not overcome this labour–capital divide or brought the two sides closer to each other, even though both have stressed the importance of flexicurity. Both continue to represent the interests of their constituents, and consensus or a cross-class alliance on the reform of the labour market seems as far away as ever. In more general terms, this shows how the social partners agree on the general discourse of flex-icurity but strongly disagree on the measures that should be taken to balance flexibility and security. It is the ambiguous nature of the flexicurity concept which makes it possible for actors with widely different views on employment and labour market policy to endorse it; but when a precise and operative specification of the concept is needed, many of its contradictions come to light and the cleavages between different views re-emerge. Indeed, as Hyman (2005) argues, flexicurity can be seen as a ‘composite resolution’, a purely linguistic combination of opposites which can then be applied to virtually any policy mix. This results in Babel-like confusion and the obscuring of differences of opin-ion and interest. Also, it leads to a situation in which the flexicurity concept has become widely accepted but where at the same time a struggle takes place in which different actors try to impose their favourite interpretation.

The difficulty of creating institutional complementarities

Our second issue concerns institutional complementarity, an increasingly popular con-cept in neo-institutional analysis and political economy which is used in a variety of ways in the literature (Crouch et al., 2005; Höpner, 2005). Following Höpner (2005),



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Table 1. Contrasting employers’ and unions’ views on flexicurity

Issue BusinessEurope ETUC

General diagnosis of EU labour market

Structural reforms required to increase labour market flexibility and competitiveness. Workers need: employment security rather than job security.

Business already enjoys high adaptability. The problem is the increase in precarious jobs with ‘excessive’ flexibility. Also, a flexible labour market does not create more jobs.

Flexicurity Flexicurity means facilitating new jobs as opposed to trying to preserve existing ones, and supporting adaptation to market changes. It implies removing obstacles to creating new jobs while equipping workers to maximize their chances on the labour market.

Flexicurity means finding a socially acceptable balance between the needs of adaptable enterprises and the long-term objective of human, social and sustainable development, as well as more and better jobs. This balance is decided primarily by the social partners themselves, through negotiations.

Employment protection legislation (EPL)

Stringent EPL hampers the creation and growth of new businesses, and adjustment to shocks. It also obstructs the entry of the less advantaged into the labour market and increases the average duration of unemployment.

Job protection functions as an ‘early warning’ system, giving redundant workers time to look for a new job or retrain. Time spent in unemployment is thus reduced. It reduces unfair dismissals and creates incentives for employers to invest in workers.

Flexible contracts In order to stimulate job creation, there must be a variety of contractual arrangements. Part-time, fixed-term, agency work, etc. enable employers to adapt to changes and demand while allowing workers to respond to their personal needs and preferences.

The principle agreed by the social partners and implemented by Directive is that atypical forms of work should remain exceptions. ‘Non-standard’ contracts should be fully integrated into labour law, collective agreements, social security and life-long learning systems.

Work organization

In addition to strengthening external flexibility there is a need to increase internal flexibility, i.e. internal mobility and variations in working patterns and working-time arrangements.

Internal flexibility is an alternative to external flexibility. It should advance productivity, innovation and competitiveness and a better combination of work with other activities.




here institutional complementarity means that the interplay between two institutions increases the functional performance of both (see also Amable, 2003; Hall and Soskice, 2001; Hancké et al., 2008). Institutional complementarity is a key concept in the flexicu-rity approach: it is encapsulated in the assumption that there can be positive-sum games between regulations increasing flexibility and those reinforcing security. This would increase performance by creating a labour market that is both more flexible and more secure, leading to higher competitiveness, more employment and greater well-being. The paradigmatic example is the idea of the Danish ‘golden triangle’ (Madsen, 2006), con-sisting of three mutually reinforcing regulatory arrangements: low dismissal protection making it easy to dismiss workers and hence creating flexibility; extensive unemploy-ment benefits providing income security to the unemployed; and active labour market policies aimed at employability and activation of the unemployed, helping them to return to employment as soon as possible and producing the type of labour supply the market

Issue BusinessEurope ETUC

Labour costs High levels of employment require wage restraint and a reduction of non-wage labour costs.

Wages need to be fair and competitiveness should focus on productivity instead of wage competition.

Life-long learning, training

Life-long learning is crucial for competitiveness and for employability of individuals. But a right to training has little impact for the workers who are most in need: the less qualified. Legislation is not the right instrument to influence learning behaviours.

An educated work force with updated skills is a flexible one, internally as well as externally. But business invests less and less in training. Business should take its responsibility and workers should have an annual qualifications development plan and the necessary training.

Active labour market policies

The aim is to spur the unemployed to look for work more actively and/or to improve their employability.

They are crucial to build bridges between jobs. With generous benefits, they allow workers to obtain suitable and rewarding new employment.

Unemployment benefits and social security

Employment-friendly social security systems should not discourage rapid re-entry in the labour market.

Comprehensive and generous welfare systems should limit loss of income, allowing workers to prepare for and find a suitable new job.

Sources: BusinessEurope (2007); ETUC (2007a, 2007b).

Table 1. (Continued)




demands. In this conception, the unemployment benefit system offsets the negative effects of low dismissal protection (fear of unemployment and loss of income) while active labour market policies are the ‘grease’ of the system, assuring its dynamism. This constellation of institutions is assumed to produce high levels of employment and eco-nomic competitiveness.

Flexicurity strategies can be conceived as searches for such complementarities, which should produce superior outcomes for both workers and employers. The mainstream approach however fails to problematize the creation and maintenance of complementarities, and often assumes that those designed on the drawing board will function according to inten-tion in real life. This is not self-evident, for a number of reasons (see also Barbier, 2007).

First, well-functioning complementarities are hard to devise on the drawing board. As Streeck (2001) shows, many complementarities that are today observed in institutional constellations were not designed as such; often the institutions seen as complementary emerged at different moments in time, independently from each other. The observed com-plementarities arose not by design but rather through the strategies of actors working within the institutions. Thus in his comparative analysis of Germany and Japan, Streeck (2001) shows how these two countries developed relatively coherent national patterns as a result of continuous experimentation, improvisation and adjustments within the limits of changing, and ever newly discovered institutional constraints and opportunities. This argument can also be applied to the Danish ‘triangle’, the elements of which were shaped at very different moments over a century and were not designed as a system in their con-ception. They have over time been rendered complementary by encompassing unions and employers’ organizations as well as by the state, through political struggle, collective agreements setting additional rules and regulations for the operation of the labour market, consensus-building and participation of the social partners in the operation of labour mar-ket and social security institutions. The ‘emergence’ of complementarities between vari-ous institutions hence depends on the way actors ‘act out’ the institutions, which in turn depends to a large extent on governance by the state and collective actors which are indis-pensable in making complementarities work. ‘Spontaneous’ coordination through the market is unlikely to produce such complementarities because of the unpredictability of behaviour of dispersed individual actors; and even when actors make the attempt, there is no guarantee they will succeed. The reforms paths in the labour market and welfare arena of many European countries show that cases of well-functioning complementarities are rare, while examples of uncoordinated reform strategies are common (OECD, 2006).

The Italian case is a good example: since the mid-1990s there have been many radical reforms of labour market regulations (Cella and Treu, 2009; Regalia and Regini, 2004), and the rhetoric of flexicurity has played an important role in the political debate in recent years. In 1997 the legge Treu promoted a massive increase in labour market flex-ibility: it legalized temporary agency work (previously forbidden) and introduced voca-tional training contracts (contratti di formazione e lavoro), as well as other types of flexible contract. This process has continued: for example, the legge Biagi of 2003 intro-duced new forms of flexibility and modified others. As in many other European coun-tries, the aim was to increase the labour market participation of specific disadvantaged groups like young people and women and to reduce the size of the shadow economy (Alacevich, 2004). In this respect, the policies were successful: by increasing atypical




employment they led to a substantial reduction of unemployment. However, at the same time they created a whole series of new insecurities and uncertainties: almost all tempo-rary contracts are involuntary, particularly among older workers; fixed-term contracts rarely function as a bridge to stable contracts; wages are often far below those of compa-rable permanent workers; and the level of irregular work remains very high, especially in Southern Italy (Barbieri and Scherer, 2008; Burroni and Keune, 2009; Burroni et al., 2008; Reyneri, 2005). During the same period there were radical welfare reforms, but they mainly concerned pensions and improvements in the financial sustainability of the welfare system. Little was done to deal with the problem of the new uncertainties created by the labour market reforms, though many proposals were made by unions or policy-makers for new guarantees for flexible workers. Such guarantees however never materialized. A Committee of Experts (the Commissione Onofri) drafted proposals for rebalancing the labour market and the welfare system, with coordinated reforms of social assistance, social security benefits, the health and the pensions system, but these were never implemented (Guerzoni, 2008). Similarly, many experiments with new ‘social pacts’ introduced small, incremental changes but failed to introduce a systematic frame-work of guarantees for flexible workers (Carrieri, 2008). Thus, notwithstanding the polit-ical discourse of the importance of balancing flexibility and security, welfare and labour market reforms followed two separate paths: actors did not foster complementarities and neither did the market. On the contrary, one could argue that a negative complementarity emerged, as precarious workers became exposed to major insecurities without compen-sation, which negatively affects their well-being as well as productivity and competitive-ness (Burroni and Keune, 2009). Similarly, Tangian (2007) shows that the trend in labour market reform across Europe is one of deregulation, but that this is not matched by new securities that offset its effects.

Even where institutional complementarities are achieved, they do not automatically persist over time. Institutions and the contexts in which they exist are dynamic, and com-plementarities have to be dynamic as well (Crouch et al., 2005). If we look at the situa-tion in the 1970s, we see that in many Western European countries some sort of equilibrium existed between flexibility and security, based on standard employment for male ‘breadwinners’ with full-time, open-ended contracts, internal flexibility and wel-fare systems producing securities geared towards this type of employment (Streeck, 2009). This model then entered into crisis in the 1980s, following a series of develop-ments including intensified international competition, rapid growth of female labour market participation and an increased mismatch between demand and supply on the labour market. This affected the competitiveness of enterprises and unemployment rose, imposing strains on unemployment and disability benefit schemes (Crouch, 1999). Non-standard employment spread, partly as a result of flexibility-oriented labour market reforms, but such employment was inadequately covered by the welfare state. In this way the earlier relationships between flexibility and security were altered and the relative equilibria were lost. New securities to match current flexibilities have not emerged through the market, and labour market and social security reforms have often failed to coordinate policies in traditionally segregated domains. Maintaining complementarities over time requires active and adaptive collective forms of governance. We will return to this point in the final section of the article.



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Win-win objectives facing conflicts of interest and lack of actor capacity

Flexicurity is proposed as a win-win solution to further the interests of both workers and employers, which as a policy strategy should be based on consensus generated through social dialogue. However, this worthy objective faces a series of major obstacles. The most basic one of these is the fact that there are still fundamental differences of interest between capital and labour. Globalization and the increasingly post-industrial character of European societies are often depicted as factors reducing labour-capital contradictions and fostering cross-class alliances and competitive corporatism (Rhodes, 1998). However, while this to some extent is a correct description of ongoing political events, it ignores the fact that globalization strengthens the power position of capital, and in particular MNCs, over labour (Keune and Schmidt, 2009) and that to an important extent employ-ers, managers and financial capital drive and manage the new uncertainties of the glo-balized post-industrial labour market.

Second, workers and employers cannot be treated as homogenous groups: flexicurity strategies may serve the interests of some workers or employers but not of others. Inspired by the Danish triangle, flexicurity is often pictured as a way to increase labour market coordination through reduced dismissal protection or the increased use of flexible contracts, but with support for the weaker market actors (workers) through social secu-rity or active labour market policies. However, such reforms are likely to have differenti-ated effects on workers: for example, previously protected older workers may lose their jobs as employers start to replace them by younger, cheaper (and possibly better edu-cated) workers. And in spite of the support they may receive they will face major difficul-ties in finding new employment – since employers are averse to hiring older workers – which turns them into the losers from the reforms.

The obverse may also occur: if flexicurity policies lead to higher job security in inter-nal labour markets, in exchange for increased functional or working-time flexibility, it may become even harder for young people to find jobs; they will be the losers from such measures. Indeed, flexicurity-type reforms may strengthen existing cleavages or create new ones between groups of workers. Similarly, it is not difficult to imagine differenti-ated effects of flexicurity-type measures in large and small enterprises or in different sectors. Hence, apart from basic differences of interests between labour and capital, there are also differences between groups of workers or groups of employers. These two fac-tors make it hard to imagine real win-win outcomes without losers and new disparities. Thus, rather than simply assuming positive-sum outcomes that benefit all, it would be important to examine flexicurity policies for their possible disparate effects – positive outcomes for some but negative for others.

Another, related aspect of the flexicurity discourse is its insistence on the need for consensual design of reforms with the participation of the state, trade unions and employ-ers’ organizations. Again, while this may be a worthy objective, little attention is given in the flexicurity discourse to the manifold obstacles to such processes. All governments have ideologies and programmes which will tend to favour either (groups of) workers or (groups of) employers. And since the flexicurity debate concerns many of the most contested issues in labour relations, involving the key differences of interest between



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workers and employers, arriving at consensus is a difficult task. This is not only true in the more conflictual industrial relations systems but also for example in the Netherlands, a traditional example of consensus-oriented industrial relations (Visser and Hemerijck, 1997), where recent proposals to reform the system of dismissal protection were shelved following an unbridgeable divide between employers and unions. Divisions may also exist within the workers’ or employers’ camp, as evidenced for example by the refusal of CGT to sign the 2008 flexicurity agreement in France or by the division between CGIL and the other unions in Italy on recent labour market reforms.

An additional difficulty here is that in many countries in Europe there are no unions and/or employers’ organizations with the levels of membership, institutional positions or capabilities to conclude consensual agreements and coordinate or enforce their imple-mentation. Examples are the UK or the Baltic countries, where unions and employers play hardly any role at the macro-level. In these circumstances it makes little sense to call for consensual policies with the participation of these actors.

The reductionist view of flexibility and security

A further problem of the flexicurity debate is that it is based on a reductionist view of the sources of flexibility and security, limited to the labour market–welfare nexus at national level. This overlooks important dimensions that play a key role in producing security and flexibility. Here we focus on three of these dimensions.

First, the flexicurity debate deals mainly with national-level institutions and policies, implicitly supposing that national labour markets have a high degree of homogeneity. But as discussed above, we find many variations and cleavages among economic sectors, occupational groups, types of enterprise and regions. For example, in the same national economy, sectors or enterprises differ substantially on dimensions such as exposure to international competition, degree of unionization, skill levels or the impact of immigra-tion, and the impact of the same national flexicurity arrangement will be very different. Here again, the Italian case is a good example: despite a uniform legal framework, there are marked territorial disparities (Colombo and Regini, 2009). In 2007 the employment rate in Lombardia was 66.7 percent, the unemployment rate 3.4 percent and the youth unemployment rate 12.9 percent; the respective figures in Calabria were 44.9, 11.2 and 31.6 percent. Italian regions also differ markedly in terms of their institutional frame-works, including industrial relations practices, membership of unions and employers’ associations, the efficiency of local and regional government, family structure, the extent of the shadow economy, the availability of tangible and intangible infrastructures and so on (Trigilia, 1992; Trigilia and Burroni, 2009). If national reforms aimed at promoting flexicurity do not take these regional differences into account they may improve the situ-ation in some regions but worsen it in others, and may eventually enlarge the gap between rich and poor regions. In many European countries there are analogous variations accord-ing to sector or size of enterprise, so that national reforms may have dramatically differ-ent impacts according to context.

Second, a focus on national labour market and welfare regulations leads to a neglect of other important types of regulation like collective agreements, company policies or informal rules. Taking these into account may create quite a different picture of a national



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case. For example, the Dutch Flexwet (Flexibility and security act 1999) allows unions and employers to depart from the standards it specifies through (largely sectoral) collec-tive agreements. A recent study shows that although the overall reform indeed aimed at creating a new balance between flexibility and security, trade union weakness at sectoral level has meant that sectoral agreements which use this discretion are biased decisively towards increased flexibility (Houwing, 2010). Likewise, accounts of the Danish ‘trian-gle’ often fail to take account of collective agreements, which play an important role in shaping and combining flexibility and security (Andersen and Mailand, 2005). Also, large firms have the resources and instruments to develop their own way to internally combine flexibility and security at firm level, for example to reduce uncertainty for workers and to increase their motivation, participation and productivity. Conversely, in the informal sector, which is sizeable in many EU countries, formal regulations apply only to a limited extent while informal rules and customs play a prominent role.

Third, flexibility and security are not exclusively the outcomes of specific flexicurity arrangements but depend to an important extent on institutional arenas and processes that are outside their scope. These include the role played by families and communitarian mechanism of regulation, but also the functioning of financial markets, changes in interna-tional competition, the employment-creating capacity of national and local economies or the functioning of production system (Crouch, 2009a; Schmid, 2008). For example, the regulation of financial market has a strong impact on income or job security. Crouch (2008) shows how the growth of credit markets since the 1980s offered financial opportunities for poor and middle-income groups, sustaining their capacity to consume through the expan-sion of forms of credit like credit cards or mortgages. These arrangements, which he terms ‘privatized Keynesianism’, explain how moderately paid workers in Anglo-Saxon econo-mies, with very limited job security and wages which had stagnated for many years, until recently maintained consumer confidence. It also helped creating and maintaining jobs in construction, consumer goods and services. In other words, this model offered possibilities to consume independent of labour market regulation and welfare provision, increasing employment security by creating demand for labour. This model of privatized Keynesianism collapsed first of all because of the malfunctioning of financial markets; however, this col-lapse has had profound effects on the security of working people.

Other examples can be given, including macroeconomic policies (vital for income security and job creation), the international competitiveness of firms (crucial for job creation), education (a key issue for functional flexibility and employment security) and the family (a major source of income security in Southern countries). All these elements play an important role in determining flexibility and security but are rarely considered in the flexicurity approach. All these observations point to the need for a more complex and expanded approach towards the analysis of flexibility and security, that takes into account more elements of national models of capitalism and their place in the global economy.

Conclusions

Flexicurity has become a core concept in both academia and politics. However, as we have argued in this article, it suffers from a number of serious shortcomings. We focused our attention on four main problems: the ambiguity of the concept; the uncertainties of



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institutional complementarities; the difficulty of achieving win-win solutions; and a reductionist view of the sources of flexibility and security. These shortcomings severely limit the academic soundness and political usefulness of flexicurity. Consequently, one possible conclusion is that the concept should be abandoned. Another option is to use the present analysis to strengthen the study of the nexus between flexibility and security. This could be a positive addition to the set of innovative approaches towards the study of the labour market and the welfare state that has emerged in the last decade or so and which includes, among others, the transitional labour market approach (Schmid and Gazier, 2002), the capabilities approach (Salais and Villeneuve, 2004) and the govern-ance of uncertainties approach (Crouch, 2009a, 2009b). More specifically, our analysis leads to a series of proposals for the improvement of the flexicurity approach.

The first is to be more explicit in the definition of flexicurity, and also to differentiate between an analytical and a programmatic definition (Wilthagen, 2005). In analytical terms the flexicurity approach can be presented as an instrument to map and compare the state of play in specific cases by describing the occurrence and weight of the various types of flexibility and security and by disentangling their interplay. In programmatic terms, more clarity is required to reduce the ambivalence of the concept and to allow higher-quality policy debate. This requires that the ambitions of the flexicurity approach are downscaled and that its aspiration to be a guiding principle for the reform of any type of labour market situation should be abandoned. Instead, it should be posed much more specifically as a labour market model in which certain concretely identified forms and combinations of flexibility and security can be considered superior to others. For exam-ple, it may be defined as a strategy that promotes increased external flexibility (to be achieved by lowering dismissal protection and encouraging the use of flexible contracts) in combination with increased employment and income security (through increasing training, placement services or unemployment benefits entitlements). And such a defini-tion should also include at least some indication of appropriate or minimum levels of its various elements, which can then serve as targets. Other definitions are possible as well, and we do not take a stance on this here. What we want to stress is the need to be more explicit about what we mean when using the concept of flexicurity in a programmatic sense. This will also allow political actors to more clearly define their agreement with or opposition to the flexicurity model proposed.

Second, the flexicurity approach needs to pay more attention to governance and pol-icy coordination. This is particularly important because of the key role of complementa-rities in the flexicurity concept. The flexicurity approach assumes that it is necessary to combine greater labour market flexibility with new or enhanced securities to compensate the most vulnerable. What is more, these flexibilities and securities should reinforce each other. But as we have underlined, it is not an easy task to create mechanisms that set in motion such virtuous relations: rather, in many European countries reforms have been uncoordinated. Moreover, where equilibria between flexibility and security have been achieved, these have often proved unstable. This has implications from both an analyti-cal and a programmatic point of view. In analytical terms, the study of mechanisms of policy coordination can shed more light on the emergence and functioning of comple-mentarities in flexicurity practices, and their persistence or disappearance over time. In programmatic terms, as we have argued in this article, the creation and maintenance over




time of complementarities cannot be left to the market nor can it be solved with general references to the importance of the social partners. It requires active coordination between policy fields that are often treated separately, as well as a continuous monitoring (and when necessary adjustment) of the relations between them.

Our third suggestion concerns the importance of approaching national examples as het-erogeneous cases which contain significant within-country differences. We have shown how national institutional arrangements result in very different flexibility and security out-comes for different social groups, regions or sectors. This should be obvious but is often ignored in the flexicurity approach. Hence, this heterogeneity should be explicitly incorpo-rated into the approach, both to provide more precise and detailed analytical descriptions of national models and to consider better the impact of policy interventions. Heterogeneity also concerns the often contrasting interests of social groups and the difficulty of reaching win-win solutions. Here it seems more appropriate to abandon the unrealistic ‘win-win’ objective and to rather use concepts like negotiated reforms or balanced trade-offs.

Finally, to give a more comprehensive account of the sources of flexibility and secu-rity, the flexicurity approach should extend its scope to other factors that influence flex-ibility and security as well as the relationship between the two. Where labour market institutions are concerned this includes, for example, collective bargaining practices or company policies. Examples of research aiming to include these factors are slowly emerging but are still exceptions. In addition, taking into account factors further away from the labour market, like the functioning of financial markets, the characteristics of production systems and the like can lead to a more complete account and understanding of flexibility and security and their interaction.

AcknowledgementsThis article was written as part of our participation in the FP7 project ‘Meeting the challenges of economic uncertainty and sustainability through employment, industrial relations, social and envi-ronmental policies in Europe’ (GUSTO). We acknowledge the financial support of the European Commission and the European Trade Union Institute. We thank Colin Crouch, Laura Leonardi, Richard Hyman and three anonymous referees for their comments. All errors are ours.

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Author biographies

Luigi Burroni is Associate Professor at the Department of Communication Studies, University of Teramo, Italy.

Maarten Keune is Professor at the Amsterdam Institute for Advanced Labour Studies and the Hugo Sinzheimer Institute, University of Amsterdam.



flexicurity: a conceptual critique

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