author

Kornelius Kraft

University of Essen, Germany

Theoretical arguments suggest that codetermination has scope for real efficiency gains in terms of both productivity & job satisfaction, but the latter is difficult to measure, while the former is mostly likely to show up in long-run data sets that are difficult to acquire. Property rights theory arguments against codetermination suggest that codetermination might create tension between innovation and employment, and may increase the time needed to make decisions. The “overwhelming majority” of supervisory board decisions under codetermination are unanimous. There is suggestive evidence for a positive impact of co-determination on innovation. Data from 1972-76 and 1981-85 find codetermination had a small positive effect on productivity following the 1976 strengthening of codetermination laws. Codetermination can be explicitly designed to mitigate the conflict between efficiency and distributional goals.
Economic Effects of Codetermination Codetermination, Efficiency, and Productivity Co-Determination and Innovation
Codetermination
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