July 2016

IZA DP No. 10043: UK Trades Unions and the Problems of Collective Action

published as 'UK Unions, Collective Action and the Cost Disease' in: British Journal of Industrial Relations, 2020, 58 (2), 447 - 470

This paper looks at the financial resources of trades unions in the UK, both updating previous work and attempting to understand the management of first and second order collective action problems. First order problems refer to the problems of initiating collective action and second order problems refer to the management of collective action organisations. Unions are 'cost disease' organisations in which expenditure outstrips inflation but revenue may not. Their economic model cannot survive without some form of external subsidy. Both aggregate and case study data – from the largest UK union, Unite – are presented to illustrate the cost disease problem and to suggest options for its management.