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Die betriebliche Mitbestimmung in Deutschland – eine richtige Reform in die falsche Richtung

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  • Berthold Norbert
  • Stettes Oliver

Abstract

Besides the system of collective bargaining the German Works Constitution Act is one peculiarity of German labour relations. A legal framework of co-determination can cure market failure caused by information asymmetries, free-riding and opportunistic behaviour. Employees are more willing to invest in specific human capital and to cooperate with the management in order to generate quasi-rents. In recent years works councils have been challenged by structural change and reorganization of work. But by enhancing the legal rights of works councils the German government failed in adapting the Works Constitution Act to new economic conditions. Voluntary agreements between employers and employees both formally and informally settled on have replaced legal works councils in governing labour relations. The paper shows that the New Works Constitution Act will not result in efficiency gains but will protect rents for insiders.

Suggested Citation

  • Berthold Norbert & Stettes Oliver, 2001. "Die betriebliche Mitbestimmung in Deutschland – eine richtige Reform in die falsche Richtung," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 52(1), pages 15-36, January.
    • Handle: RePEc:bpj:ordojb:v:52:y:2001:i:1:p:15-36:n:4
    DOI: 10.1515/ordo-2001-0104
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