Governing the FirmWorkers Control in Theory and PracticeMost large firms are controlled by shareholders, who choose the boardof directors and can replace the firms management. In rare instances,control over the firm rests with the workforce. Many explanations forthe rarity of workers control have been offered, but there have beenfew attempts to assess these hypotheses in a systematic way.In Governing the Firm, Gregory Dow draws on economic theory,statistical evidence, and case studies to frame an explanation. His fundamentalhypothesis is that labor is inalienable, while capital can befreely transferred from one person to another. This implies that workercontrolledfirms typically face financing problems, encounter collectivechoice dilemmas, and have difficulty creating markets for control positionswithin the firm. Together, these factors can account for muchof what is known about the incidence, behavior, and design of workercontrolledfirms.A policy proposal to encourage employee buyouts is developed inthe concluding chapter.Gregory K. Dow is Professor and Chair of the Department of Economicsat Simon Fraser University, British Columbia, Canada. He previouslytaught at the University of Alberta and Yale University, and hehas served as a visiting professor at the University of New SouthWales,the Erasmus Institute for Philosophy and Economics, and the SwedishCollegium for Advanced Studies in the Social Sciences. Professor Dowis associate editor of the Journal of Economic Behavior and Organization,and he has published numerous articles on labor-managed firmsand other topics in economic theory in leading journals such as theAmerican Economic Review and the Journal of Political Economy. Hehas also written many book chapters in edited volumes.