Abstract
In this paper, I examine an economy where output is produced from labor, capital and public services, and where firms and labor unions bargain over labor conditions and lobby the government over union bargaining power and public services. I compare three institutional cases: (a) competitive wage settlement, (b) bargaining over wages and employment, and (c) bargaining over wages only. I show that in cases (a) and (b) the government expropriates investment rents, but right-to-manage bargaining (c) protects investors from this expropriation.
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Palokangas, T. Investment, expropriation, and unionization. Econ Gov 10, 27–42 (2009). https://doi.org/10.1007/s10101-008-0048-5
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DOI: https://doi.org/10.1007/s10101-008-0048-5