Two‐Tier Systems

Gilles Saint‐Paul

in The Political Economy of Labour Market Institutions

Published in print September 2000 | ISBN: 9780198293323
Published online November 2003 | e-ISBN: 9780191596841 | DOI:
 Two‐Tier Systems

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Studies the role of two‐tier systems in generating consensus for a reform that would be otherwise repelled. It is shown that if exposure to unemployment is initially too low, such strategy will fail as well. Furthermore, it can be used to generate political support for an across‐the‐board reform at a later stage. However, recognition of that possibility by voters ex‐ante will reduce the political support for the two‐tier reform.

Keywords: consensus; conversion clause; gradualism; lock‐in; political dynamics; two‐tier systems

Chapter.  10866 words.  Illustrated.

Subjects: Macroeconomics and Monetary Economics

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