"The long-established ‘basic agreements' in the Nordic countries are well known; less familiar is the analogous institution in the Swiss labour market, first established in 1937 in the metalworking industry. This article contributes to the understanding of such agreements though an analysis of the peace clauses that are central to collective bargaining in Switzerland. It describes the emergence of the 1937 agreement, with an emphasis on the actors' strategies and the external economic pressure that provoked the move towards cooperation, and explains the persistence of cooperative institutions, emphasizing the role of mutual interests, of a mandatory cooperative framework and of benevolence. Since the benefits of the agreement have come to represent a public good, the conclusion examines the emergence of a free-rider problem."

Support: Paper