What Connects Industrial Relations and Corporate Governance? Explaining Institutional Complementarity

The concept of institutional complementarity is central to the recent debate on the internal logics of production regimes, redirecting our attention from the effects of single institutions to interaction effects. The article provides definitions of complementarity, coherence and compatibility and discusses the ways in which different authors describe interaction effects between corporate governance and industrial relations. It turns out that some of the interaction effects are actually direct causal links rather than effects deriving from complementarity. It is argued that complementarity may be caused by both structural similarity and incoherence, and that the concept provides only weak predictions with respect to institutional change. The article is followed by comments from Bruno Amable, Robert Boyer, Colin Crouch, Peter A. Hall, Gregory Jackson, Wolfgang Streeck, and an epilogue by Martin Hopner.