Party System
The chapter discusses the party system in the macro context of politics. It highlights the limitations of political party and interest group analysis without reference to the political competition that shapes behaviour in politics. The chapter discusses theoretically the impact of party system on labour market flexibility and proceeds to show the interrelation between party competition and the behaviour of political parties, composition of socio-economic support bases, and the behaviour of interest groups that influence reform. In the context of labour market flexibility, the party-system operates as an intermediate variable facilitating reforms. The chapter contradicts the conventional notion that party system fragmentation impedes reform by showing how increasing party competition corresponds to greater labour market reforms. It shows that increases in the number of parties, facilitates labour market reforms through marginalization of the issue of labour, realignment of class interests within broader society and fragmentation of trade union movement.