A General Model of Codetermination



Attempts to compare the so-called “codetermined” firm with the “conventional” capitalist firm tend to run into difficulty quickly because there is, normally, no general agreement on the precise characteristics of the respective organizations being compared. Given the possible variations in the institutional arrangements of codetermination, many different types of codetermined firms are conceivable.1 Similarly, there are many variant forms of conventional (or non-participatory) firms. And, depending on structure, each separate firm, codetermined or conventional, can be expected to exhibit its own distinctive pattern of behavior. In principle, the new property-rights approach to comparative economics provides a general framework for analyzing the various organizational cases. By examining systematically the effects of different institutional configurations on transaction costs and economic incentives, predictions about the behavior of firms can be made. In this way,then, it is possible to relate variant models of codetermination to each other and to models of the conventional capitalist firm. But the possibility of conducting methodical analysis does not banish all problems. If, as we would anticipate, the behavior of a codetermined firm is quite sensitive to the specific institutional structure established to implement codetermination,2 the task still remains to define the particular type of codetermined firm we wish to consider. Moreover, if questions of relative efficiency are to be broached,it is also necessary to decide on the type of non-participatory firm that will be used as the basis for behavioral comparisons.


Wage Rate Labor Participation Pareto Improvement Neoclassical Theory Resource Owner 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Alchian, A.A. (1983), “Specificity, Specialization, and Coalition”, Working Paper, Department of Economics, University of California-Los Angeles, 1–36.Google Scholar
  2. Alchian, A.A. (1984), “Specificity, Specialization, and Coalition”, Zeitschrift für die gesamte Staatswissenschaft, 140, 34–49.Google Scholar
  3. Alchian, A.A. and Demsetz, H. (1972), “Production, Information Costs, and Economic Organization”, American Economic Review, 62, 77795.Google Scholar
  4. Cable, J. and FitzRoy, F. (1980), “Productivity, Efficiency, Incentives, and Employee Participation:Some Preliminary Results for West Germany”, Kyklos, 33, 100–121.CrossRefGoogle Scholar
  5. Furubotn, E. G. (1985), “Codetermination, Productivity Gains, and the Economics of the Firm”, Oxford Economic Papers, 37, 22–39.Google Scholar
  6. Furubotn, E.G. and Wiggins, S.N. (1984), “Plant Closings, Worker Reallocation Costs and Efficiency Gains to Labor Representation on Boards of Director”, Zeitschrift für die gesamte Staatswissenschaft, 140, 176–92.Google Scholar
  7. Jensen, M.C. and Meckling, W. H. (1979), “Rights and Production Functions:An Application to Labor-Managed Firms and Codetermination”, Journal of Business, 52, 469–506.CrossRefGoogle Scholar
  8. Lutz, M. and Lux, K. (1979), The Challenge of Humanistic Economics, Menlo Park, California.Google Scholar
  9. McCain, R.A. (1980), “A Theory of Co-Determination”, Zeitschrift für Nationalökonomie, 40, 65–90.CrossRefGoogle Scholar
  10. Mueller, D.C. (1976), “Information, Mobility and Profit”, Kyklos, 29, 419–48.CrossRefGoogle Scholar
  11. Oi, W.Y. (1962), “Labor as a Quasi-Fixed Factor”, Journal of Political Economy, 70, 538–55.CrossRefGoogle Scholar
  12. Steinherr, A. (1977), “On the Efficiency of Profit Sharing and Labor Participation in Management”, Bell Journal of Economics, 8, 545–55.CrossRefGoogle Scholar
  13. Svejnar, J. (1982a), “Codetermination and Productivity: Empirical Evidence from the Federal Republic of Germany”; in Jones, D. and Svejnar, J. eds.,(1982), Participatory and Self-Managed Firms, Lexington, Massachusetts.Google Scholar
  14. Svejnar, J. (1982b), “On the Theory of a Participatory Firm”, Journal of Economic Theory, 27, 313–30.CrossRefGoogle Scholar
  15. Williamson, O.E. (1984), “The Economics of Governance:Framework and Implications”, Zeitschrift für die gesamte Staatswissenschaft, 140, 195–223.Google Scholar

Copyright information

© Springer-Verlag Berlin · Heidelberg 1989

Authors and Affiliations

There are no affiliations available

Personalised recommendations