Ownership or Competition? An Evaluation of the Effects of Privatization on Industrial Relations Institutions,Processes and Outcomes

This paper examines whether privatization and exposure to product market competition leads to changes in labour management and industrial relations. Three sets of propositions are examined: privatization will lead to lower changes in industrial relations institutions and processes; privatization will lead to lower average levels of remuneration relative to public sector firms; and privatization will lead to relatively higher levels of efficiency. In each instance it is hypothesized that competition will add to ownership effects. These propositions are examined drawing on data derived from the UK bus industry.