Privatisation et négociation collective

This article deals with the role of labor unions in the privatization movement for developing countries. We consider the case of a public monopoly whose workers are members of a trade union and examine the consequences of its privatization. When the trade union and the rm bargain over the level of employment, there exists an overemployment in the public rm while the private rm is characterized by a too low level of employment in order to reach the social optimum. The privatization can be socially desirable when the trade union has an important bargaining power and is characterized by a strong preference for employment. However, with the right-tomanage model, the privatization is never wishable.