Corporate Governance, Competition, and Political Parties: Explaining Corporate Governance Change in Europe

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Corporate Governance, Competition, and Political Parties: Explaining Corporate Governance Change in Europe
By Roger M. Barker
Oxford University Press, USA, 2010
270 pp. $99.00
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The continental system of corporate governance, in which insider shareholders dominate company ownership, has traditionally differed from the Anglo-American model, in which a broad base of shareholders and institutional investors wield more power. But recently, Europe's system has moved substantially closer to that of the United Kingdom and the United States. Barker credits this shift not to right-wing ideology, since more often than not, it was left-wing parties that engineered the necessary legal changes. Instead, he argues, although right-wing parties were linked to the old system, left-wing parties used reform to attract new support from business. In addition to his econometric evidence, Barker offers an intriguing comparison of Germany and Italy to support his view -- although one wonders whether the rise of the service sector, the diversification of labor forces, and cross-class alliances might provide a more compelling explanation. Still, Barker's book contains interesting evidence that Europe's corporate landscape is anything but stagnant.