New Horizons in Management series
Edited by Michael Barry and Adrian Wilkinson
Chapter 4: Legal Origins, Labour Law and the Regulation of Employment Relations
Sean Cooney, Peter Gahan and Richard Mitchell INTRODUCTION The proposition that a country’s legal institutions and regulatory approach are likely to condition the operation of labour markets and employment relations has been a continuing theme in the social sciences. Even in a period in which it was often presumed that globalization would undermine the distinctive institutional features that distinguish one national system from another (Mills et al., 2008), the idea that countries could be classified into different ‘families’, ‘types’ or ‘varieties’ has persisted. Indeed, over the course of the last decade, it has again emerged as one of the most important questions among economists, political scientists, sociologists and other scholars, including those in the field of employment relations. This renewed interest in comparing national institutions is not merely a response to globalization; it is also a consequence of the transition of former socialist economies in Eastern Europe and Asia to market economies, and the rapid growth of the developing economies of South-East and East Asia. Legal origins theory is without doubt the most influential approach to classifying and analysing national institutions to emerge in the 1990s. The theory is grounded in the work of a group of economists located principally at Harvard and Yale Universities and at the World Bank (Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer and Robert Vishny – collectively referred to as LLSV). In a series of highly influential articles, these authors argued that there is a strong empirical correlation between a nation’s regulatory style and the origin...
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