Transforming Public Policy through Economic Democracy

Lead Research Organisation: University of Glasgow
Department Name: Business School


The research project centres around the basic proposition that societies with strong and effective forms of economic democracy are more likely to achieve crucial public policy goals; such as combating climate change, reducing inequalities and creating more sustainable forms of economic activity. The research will construct an index of economic democracy (EDI) as a tool to test the basic proposition. As such, the research proposed fits directly within two of the ESRC's current priority areas of economic performance, and creating a vibrant and fair society.

A key argument advanced here is that economic decision-making in many countries is becoming increasingly monopolised by a core of financial and political elites at the expense of the broader population. An increasingly narrow range of interests are therefore dominating economic decision making and policy failing to reflect the broad and diverse interest groups that constitute advanced capitalist societies. Not only is this leading to a democratic deficit in the management of society's resources and assets but it is argued that there are considerable negative public policy effects in terms of greater income and wealth inequalities, increasing susceptibility to financial crises and fragility, and arguably a failure to effectively address the causes of climate change. This leads to another central proposition, that greater economic democracy - more diversity and plurality in economic decision-making - will lead to better policy outcomes in terms of better taking into account critical economic, social and environmental issues.

The research proposed here will be pioneering in developing an inter-disciplinary conceptual framework, drawing upon scholars as diverse as Ostrom, Sandel, Olin Wright, Dewey and Sen who argue for the importance of collective action and public discourse in economic decision making for advancing the common good over vested interests, and for promoting individual economic and social rights.

The research takes a broad definition of economic democracy - employing four dimensions: (i) workplace (nature and structure of employment relations, levels of co-determination, etc); (ii) degree of associational economic governance (e.g. level of cooperatives within economy, number and extent of business and labour associations in economic policy forums); (iii) distribution of decision-making powers across space and sector between different economic and political governance institutions (e.g. ownership structure of the economy, diversity ; (iv) engagement of broader population in macro-economic decision-making (e.g. nature of economic policy formulation, governance structures in economic policy formation at national and subnational levels, role and participation of different interest groups).

Research Aims and Objectives
The research would construct an Economic Democracy Index (EDI), and use it to test several key questions about the relationship between levels of economic democracy and three key public policy goals (see below). Key questions are: what is the level of public engagement and deliberation in economic decision-making and how does this vary internationally? What is the relationship between different levels and types of economic democracy and achieving key public policy goals around sustainable economic development and social justice?

Planned Impact

The research will produce a new set of indicators and research findings regarding democratic participation and good governance in economic decision-making and therefore will be of direct applicability to policy makers at national, sub-national and international levels. Consequently, it will make a timely and important contribution to the growing public debate about how the contemporary economy is governed and regulated, and provide new data and information about the relationship between inequality, increased economic instability and the nature of economic decision-making. The research will also be of direct interest to civil society and business associations concerned with the nature of economic policy-making and its effects.

There are a host of indices seeking to measure numerous dimensions of socio-economic activities, ranging from human development to the multidimensional poverty index to the perceptions of corruption. The EDI explicitly attempts to provide an indication of the levels of economic democracy in particular states. By doing so, it augments existing indices, and also provides information on an area that is currently overlooked in analyses of human well-being and economic governance.

During the course of the project, a wide range of partner organisations including UNRISD, trade union bodies, NGOs and think tanks will benefit directly from access to the research findings and involvement in the construction of the EDI. Through the project website, and through policy briefings the research will also be disseminated to UK government departments involved in economic development such as the Treasury, BIS and devolved administrations in Scotland, Wales and Northern Ireland, as well as supranational bodies such as the EU, ILO, UNRISD, OECD and the World Bank.

By developing research findings and indicators of good governance and transparency, the research will also be relevant to business organisations and associations, helping them to deliver best practice around agendas concerned with employee involvement, corproate social responsibility and broadening stakeholder involvement and access to decision-making.
Description We have developed an index for economic democracy which involves the construction of a new database for levels of economic democracy across the OECD. Our EDI initial findings have been published in The Conversation, see here:
Exploitation Route Too early to fully report but our initial findings do suggest that there does seem to be an important highly significant relationship between economic democracy and ley public policy goals like tackling poverty and inequality.
Sectors Environment,Government, Democracy and Justice

Description an article for The Conversation. We have also publicised findings on our website and are organising two events (i) in the Scottish Parliament (ii) at the New Econonics Foundation in London.
First Year Of Impact 2017
Sector Government, Democracy and Justice
Impact Types Societal,Economic

Title Established a new index of economic democracy 
Description Established a new set of indcators relating to economic democracy 
Type Of Material Model of mechanisms or symptoms - human 
Provided To Others? No  
Impact Early days to assess impact as the index has only just been constructed and we are currently developing robustness checks. 
Description Economic Democracy Index Scottish Parliament Information and Knowledge Exchange Event 
Organisation Scottish Parliament
Country United Kingdom of Great Britain & Northern Ireland (UK) 
Sector Public 
PI Contribution We are delvering a seminar on the index to the Scottish Parliament.
Collaborator Contribution Hosting our event and organising the guest list, inviting key public policy actors, etc.
Impact Scottish Parliament information event
Start Year 2017
Description New Economics Foundation Launch Event 
Organisation New Economics Foundation
Country United Kingdom of Great Britain & Northern Ireland (UK) 
Sector Charity/Non Profit 
PI Contribution Delivering a launch event seminar in London
Collaborator Contribution Hosting the event and inviting key public policy actors and civil society groups
Impact Launch event (London)
Start Year 2016
Description Next System Project Research and Knowledge Exchange Partnership 
Organisation Democracy Collaborative
Department Next System Project
Country United States of America 
Sector Charity/Non Profit 
PI Contribution Feeding in to their ongoing work around economic democracy including sharing publications, presenting findings to seminar in Washington September-October 2017
Collaborator Contribution Participating on the Project Advisory Board, Hosting seminar in Washington.
Impact seminar event planned in Washington DC, Autumn 2017
Start Year 2016
Description Oxfam partnership 
Organisation Oxfam GB
Country United Kingdom of Great Britain & Northern Ireland (UK) 
Sector Charity/Non Profit 
PI Contribution Compiling the EDI.
Collaborator Contribution Advise and consultancy, attending Project Advisory Board
Impact none beyond intangible advice and consultancy.
Start Year 2016
Description Article in The Conversation on the EDI 
Form Of Engagement Activity A magazine, newsletter or online publication
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Media (as a channel to the public)
Results and Impact An article in The Conversation about the initial findings of our research project and in particular the Economic Democracy Index.
Year(s) Of Engagement Activity 2017
Description Established a website and blog 
Form Of Engagement Activity Engagement focused website, blog or social media channel
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Other audiences
Results and Impact Established a blog and have posted various articles and papers relating to the project.
Year(s) Of Engagement Activity 2016,2017