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2. The "Austrian Way": The System of Social Partnership

The fact that Austria, in comparlson to most of the OECD countries, was able to absorb the economic shocks of the 8event±es relat±vely well has caused many observers to speak of an "Austrian way”. The core of this "Austro-Keynesianism" is the Social Partnership¹s incomes poricy. Although in most of the European industrial States considerable economic recessions occurred in the seventies, with mass unemployment, real-wage 108808 and budget cuts Austria seems to have been spared. The economię crisis led to massive political changes in the countries concerned. This phenomenon may be called the end of the soęial-democratic era. Here again Austria seems to be an exception: in 1979 the Social Democrats won the election.

£ocial Partnership means the cooperation of employer ^rganisationa, unions and the State. The efficacy of the Social Partnership is seen less in a direct influence on the wagę and price formation as such but rather in the implicit imperative to negotiate over these matters.

The Social Partnership came into being when the Joint Commission for Wagę and Price Questions was founded in 1957. Since then practically all decisions on economic and social policy are prepared in a large number of committees where the "Social Partners" are represented.