Racing to the Bottom or Climbing to the Top? Economic Globalization and Collective Labor Rights

Abstract

This article explores the impact of economic globalization on workers' rights in developing countries. The authors hypothesize that the impact of globalization on labor rights depends not only on the overall level of economic openness but also on the precise ways in which a country participates in global production networks. Using a new data set on collective labor rights, the authors test these expectations. Their analysis of the correlates of labor rights in 90 developing nations, from 1986 to 2002, highlights globalization's mixed impact on labor rights. As “climb to the top” accounts suggest, foreign direct investment inflows are positively and significantly related to the rights of workers. But at the same time, trade competition generates downward “race to the bottom” pressures on collective labor rights. The authors also find that domestic institutions and labor rights in neighboring countries are important correlates of workers' rights.

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