Labour mediation law was reformed in Sweden in 2000. Replacing a century old regime the new regime gives the government a firmer grip on wage formation. Traditional and orderly patterns of wage formation by the social partners gradually fell apart in the last decades of the 20th century prompting the imposition of de facto state wage policies. This article describes the new regime and its background. However, the legislative reform is not the most interesting event. Faced with continued state intervention the social partners in various sectors of the economy have reached agreements on wage formation, effectively averting state participation. The agreements are analysed. Though epochal they in fact represent a return to the traditional ‘Swedish model’ rather than introducing a radically new element to Swedish industrial relations. Applying game theory in a Prisoner's Dilemma context both the legislative reform and the agreements seem to fit nicely into that theory.
International Journal of Comparative Labour Law and Industrial Relations