Meritocracy, efficiency, incentives and voting in cooperative production: a survey

Abstract

This paper surveys selectively several contributions to the understanding of how cooperatives may cope with the interplay between meritocracy and efficiency when public decisions are taking by voting and the supply of labor is freely decided by each member. This outlines the main trade‐off faced by cooperatives. In particular, the degree of meritocracy is limited by three factors: (1) efficiency, because too much meritocracy encourages too much work from the socially optimal point of view; (2) meritocracy encourages sabotage; and (3) voting, because workers may prefer inefficient reward schemes as long as they are individually profitable.