The Economics of Codetermination: Lessons from the German Experience

190 Pages·2009·1.23 MB·English

by  John T. Addison

The Economics of Codetermination
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The Economics of
Codetermination
Lessons from the
German Experience
John T. Addison
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THE ECONOMICS OF CODETERMINATION
Copyright © John T. Addison, 2009.
All rights reserved.
First published in 2009 by
PALGRAVE MACMILLAN®
in the United States—a division of St. Martin’s Press LLC,
175 Fifth Avenue, New York, NY 10010.
Where this book is distributed in the UK, Europe and the rest of the world,
this is by Palgrave Macmillan, a division of Macmillan Publishers Limited,
registered in England, company number 785998, of Houndmills,
Basingstoke, Hampshire RG21 6XS.
Palgrave Macmillan is the global academic imprint of the above companies
and has companies and representatives throughout the world.
Palgrave® and Macmillan® are registered trademarks in the United States,
the United Kingdom, Europe and other countries.
ISBN: 978–0–230–60609–8
Library of Congress Cataloging-in-Publication Data
Addison, John T.
The economics of codetermination : lessons from the German
experience / John T. Addison.
p. cm.
Includes bibliographical references and index.
ISBN 978–0–230–60609–8
1. Management—Employee participation. I. Title.
HD5650.A313 2009
338.6(cid:1)9—dc22 2009006871
A catalogue record of the book is available from the British Library.
Design by Newgen Imaging Systems (P) Ltd., Chennai, India.
First edition: November 2009
10 9 8 7 6 5 4 3 2 1
Printed in the United States of America.
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Contents
List of Tables vii
Preface ix
1 Introduction 1
2 Context: What Is Codetermination? 5
3 The Theory of Codetermination 27
4 The Early Econometric Literature on Works Councils 41
5 T he Emergence of a More Positive View of Workplace
Codetermination: Evidence from Some Larger Datasets 53
6 The Impact of Workplace Codetermination: Findings
from the Third Phase of Research 69
7 Codetermination at the Enterprise Level 103
8 European Rules for Informing and Consulting Employees
and the European Dimension 123
9 Codetermination in Retrospect and Prospect 141
Notes 147
Bibliography 161
Index 175
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Tables
2.1 Estimates of the Fraction of Employees Covered
by Codetermination at Company and Plant Level
in 1984 and 1994/1996 20
2.2 Incidence and Coverage of Works Councils
in Germany in 2007 (in percent) 21
4.1 The Economic Impact of the Works Council—Phase 1
Studies 44
5.1 The Economic Impact of the Works Council—Phase 2
Studies 58
6.1A The Economic Impact of the Works Council
on Productivity, Investment, and Employment—
Phase 3 Studies 73
6.1B The Economic Impact of Innovative Work Practices
and Works Councils on Performance—Phase 3
Studies 85
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Preface
The origins of this book date back to my first publication on
works councils a little more than 15 years ago. The attraction of
works councils to an uprooted British labor economist working
in the United States and at that time allocating a still significant part of
his research effort to the economics of trade unions was powerful. In
the first place, the theory and practice of works councils offered a much
improved milieu for the study of collective voice than the entity and
country for which that model was first developed—unions in the United
States. More practically, the headlong retreat of unionism at least in the
U.S. private sector threatened to transform what had been a fairly
dynamic Anglo-Saxon research area into a near pathology.
Over the years, with the steady improvement in data sets, docu-
mented here, the economic analysis of German codetermination was to
flourish. Of course, research on works councils predates the attentions
of economists, and indeed had long been the preserve of sociologists.
They have undertaken important work on works councils and at times
must have cringed at the early efforts of economists. Nevertheless, their
work is little mentioned in the present text, not out of criticism but sim-
ply because there has been an explosion of interest by economists in the
subject. It is now time to take stock of the progress we have made, and
that is the aim of the present text.
The next few years will open up new questions that will exercise
economists and other social scientists alike. A more integrative treat-
ment might well be appropriate at that time with the challenge of glob-
alization to the labor movement, the dual system, and corporate
governance alike. There will be much to study and how well German
institutions adapt to heightened regime competition should be of inter-
est to us all. As I have implied, it may even bring sometimes uneasy
bedfellows together. Some protean lines of future inquiry are sketched
in this treatment.
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