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Labour standards, democracy and wages: some cross-country evidence

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  • Thomas I. Palley

    (U.S.-China Economic and Security Review Commission Washington, DC USA)

Abstract
The international community is divided over labour standards. Opponents claim that standards are protectionist. Proponents say they benefit developing economies by improving governance and income distribution. This paper presents evidence supporting the case for labour standards. Using cross-country data from the second half of the 1980s and the first half of the 1990s, it shows that labour standards are associated with improved governance and reduced corruption. Labour standards also improve income distribution and raise wages. The results qualify Rodrik's (1999) findings about democracy and wages. Labour standards rather than democracy cause higher wages, but democracy may still matter indirectly by promoting labour standards. Copyright © 2005 John Wiley & Sons, Ltd.

Suggested Citation

  • Thomas I. Palley, 2005. "Labour standards, democracy and wages: some cross-country evidence," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(7), pages 883-898.
    • Handle: RePEc:wly:jintdv:v:17:y:2005:i:7:p:883-898
    DOI: 10.1002/jid.1140
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    References listed on IDEAS

    as
    1. Mr. Sanjeev Gupta, 1998. "Does Corruption Affect Income Inequality and Poverty?," IMF Working Papers 1998/076, International Monetary Fund.
    2. Dani Rodrik, 1999. "Democracies Pay Higher Wages," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 707-738.
    3. Vito Tanzi, 1998. "Corruption Around the World: Causes, Consequences, Scope, and Cures," IMF Staff Papers, Palgrave Macmillan, vol. 45(4), pages 559-594, December.
    4. Thomas I. Palley, 2004. "The economic case for international labour standards," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 28(1), pages 21-36, January.
    5. Mr. Vito Tanzi, 1998. "Corruption Around the World: Causes, Consequences, Scope, and Cures," IMF Working Papers 1998/063, International Monetary Fund.
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    Cited by:

    1. Marta Guerriero, 2019. "Democracy and the Labor Share of Income: A Cross-Country Analysis," ADB Institute Series on Development Economics, in: Gary Fields & Saumik Paul (ed.), Labor Income Share in Asia, chapter 0, pages 151-176, Springer.
    2. Rémi Bazillier & Nicolas Sirven, 2006. "Les normes fondamentales du travail contribuent-elles à réduire les inégalités ?," Revue Française d'Économie, Programme National Persée, vol. 21(2), pages 111-146.
    3. Vivek Soundararajan & Jill A. Brown, 2016. "Voluntary Governance Mechanisms in Global Supply Chains: Beyond CSR to a Stakeholder Utility Perspective," Journal of Business Ethics, Springer, vol. 134(1), pages 83-102, March.
    4. Günseli Berik & Yana Van Der Meulen Rodgers, 2010. "Options for enforcing labour standards: Lessons from Bangladesh And Cambodia," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(1), pages 56-85.
    5. Gilberto Santos & Federica Murmura & Laura Bravi, 2018. "SA 8000 as a Tool for a Sustainable Development Strategy," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(1), pages 95-105, January.
    6. Jayjit Roy, 2016. "Employment Protection Legislation and International Trade," Working Papers 16-06, Department of Economics, Appalachian State University.
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    8. Kerner, Philip & Wendler, Tobias, 2022. "Convergence in resource productivity," World Development, Elsevier, vol. 158(C).
    9. Roy, Jayjit, 2021. "The effect of employment protection legislation on international trade," Economic Modelling, Elsevier, vol. 94(C), pages 221-234.
    10. Federica Murmura & Laura Bravi, 2020. "Developing a Corporate Social Responsibility Strategy in India Using the SA 8000 Standard," Sustainability, MDPI, vol. 12(8), pages 1-17, April.

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