"This paper uses institutional economic theory in the line of Commons and Coase to examine the purposes, economic effects, and social welfare consequences of labor unions. Cross-discipline and cross-national principles of the institutional paradigm are described, the American and European literatures are briefly juxtaposed, and the subject of unions is placed in a larger paradigm context. Relative to previous studies, this paper presents the most formal and analytically developed application of institutional theory to the subject of unions. A number of new or revisionist implications are developed, as are contrasts with neoclassical-based models."

Support: Digital