Challenging the Hypothesis of Neoliberal Convergence in Industrial Relations: The Swedish Conundrum

Abstract

This paper investigates the hypothesis of neoliberal convergence in Swedish industrial relations, focusing on whether Sweden has shifted towards more liberalized economic models in the past three decades. The debate in comparative political economy is divided, with some scholars arguing that Sweden has seen increased employer discretion and income disparity, while others maintain that its industrial relations system has been stable and remains coordinated and egalitarian. The empirical evidence and reviewed literature suggest that despite growing income inequality, and although there has been some decentralization, the effects on wage inequality and employer discretion have been modest, challenging accounts of a clear neoliberal shift. This Swedish conundrum implies that egalitarian outcomes can be preserved through gradual institutional adaptation. Plausible explanations are discussed, drawing on the power resources approach and varieties of capitalism. The study contributes to a broader discourse on the resilience of coordinated market economies in the face of global neoliberal trends, by highlighting the importance of distinguishing between formal and functional stability in assessing trajectories of political-economic institutions.