"This article deals with Finnish incomes policy as a special type of political exchange between the social partners and the government. The continuity of this political exchange requires a common ground of values and trust. In the article, these prerequisites are characterized in terms of the concept of social capital. The article also emphasizes the importance of centrally negotiated incomes policy agreements as an important institutional framework within which the Finnish welfare state has evolved. Owing to the traditionally close relationship between centrally negotiated incomes policy agreements and welfare reforms, the end of centrally negotiated incomes policy agreements declared by one social partner – namely, the Confederation of Finnish Industries – is likely to affect not only the manner in which wages are negotiated in the future but also the tradition of political exchange between the social partners and the government."

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