Co-determination and economic performance in Europe

Even though the US neo-liberal economic model is currently regarded by many as dominant, this may be proved false by the future of Europe's stakeholder economies. An examination of individual countries in the European Union reveals facts that speak against the supposed superiority of the US model in terms of economic performance. The strongest economies can be found, by and large, where employees enjoy strong rights of representation in company boardrooms, a finding that contrasts strongly with the prevailing opinion that co-determination impairs economic performance.

This is the main conclusion of a new study by Sigurt Vitols, Senior Research Fellow at the Wissenschaftszentrum Berlin für Sozialforschung (WZB), commissioned by the European Trade Union Institute in Brussels. For this study the EU member states were divided into two groups: countries with extensive legal rights to board-level representation, and countries with weak or no legal rights to such representation.

Table 1: Economic performance of EU countries, according to strength of board representation rights