chapter  7
THE COMPETITIVE SELECTION OF DEMOCRATIC FIRMS IN A WORLD OF SELF-SUSTAINING INSTITUTIONS*
WithUgo Pagano, Robert Rowthorn
Pages 30

It has been often been claimed that, through the use of a different technology, organizations controlled by their in-workers could achieve better results than traditional capitalist firms. The normal counter-argument has been that, if such organizations were superior, they would have already been ‘selected’ by the market economy. In the present paper we examine this issue by exploring the relations between agency costs, property rights and technologies that characterize alternative organizations.