Electoral accountability in the workplace

Abstract

To address economic inequality, proposals have emerged to expand democracy within firms. To evaluate these proposals, empirical researchers have examined European policies for worker representation. Yet without a baseline model against which to compare the results of these studies, we cannot know which elements derive from workplace democracy as such versus other institutional or contextual factors. To provide such a baseline model, we apply the electoral accountability framework to an economic context. With commonplace assumptions about preferences and information of economic actors, we show how voters increase their allocation at the official’s expense without affecting broader firm behavior. Since the sole democratic institution is electoral control over an official, we conclude that variation in firm behavior associated with existing worker representation policies results from institutional or contextual factors other than workplace democracy itself. Additionally, our analysis highlights the close conceptual connection between electoral accountability models and the Condorcet jury theorem.