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... Other analyses suggest that this "California effect" holds for the trade-based diffusion of human rights generally (Cao, Greenhill, & Prakash, 2013). More recently, Adolph et al (2017) consider the flipside of this effect: when African countries shift their exports toward Chinese markets, they experience a limited "Shanghai effect." Deterioration in labor rights is conditional on whether trade with China displaces trade with highstandards or low-standards countries (also see Peterson et al., 2016). ...
... While China's market may present opportunities for foreign-invested firms in Vietnam, firms are unlikely to expect consumer, shareholder or government demands there for labor rights improvements; nor will they anticipate greater markups than are available in the United States (Malesky & Mosley, 2018). Indeed, to the extent that a "Shanghai effect" (Greenhill et al., 2009;Adolph et al., 2017) exists, we expect that firms may even be inclined to reduce labor standards. Moreover, because the market opportunity mechanism is more likely to affect firm behavior than the rights conditionality mechanism, we expect a greater willingness to upgrade in 2018, as compared with 2016 (when TPP was expected) and 2017 (following United States withdrawal from TPP). ...
... The sizable negative coefficient (−5.2) on the interaction of 2018 and Tariff points to a decline in willingness to spend among firms that were exposed to the tariffs, but received the China treatment in 2018. This result, which is consistently negative and significant across specifications, suggests the possibility of a "Shanghai effect," in which transacting with China might motivate a race toward the bottom in labor standards (Greenhill et al., 2009;Adolph et al., 2017). Finally, the offsetting triple interaction (13.9) indicates a much greater willingness to spend among firms that were exposed to the tariffs and received the US treatment in 2018. ...
We explore and provide an empirical assessment of an important mechanism by which global markets can motivate labor‐related upgrading among developing country firms. New market opportunities, which result from exogenous shocks, can some producers to improve their treatment of workers. These improvements come because they are consistent with taking advantage of new opportunities. We focus specifically on how shifts in U.S. trade policy toward China in 2018 affect the willingness of foreign firms operating in Vietnam to engage in upgrading. Our analyses, based on surveys of firms in 2016, 2017, and 2018, suggest that firms respond significantly to changes in market opportunities, especially when they are primed to consider specific supply chain relationships. This market opportunity mechanism for upgrading contrasts with another widely used tool, in which developed country governments condition access to their markets upon improved human and labor rights outcomes. The former operates, in the short to medium term, at the firm level, while the latter seeks to effect change at the country level.
... Anecdotal evidence points to serious violations of international labour standards at Chinese investment sites in Africa (e.g. Jauch & Sakaria, 2009;Human Rights Watch, 2011;Akorsu & Cooke, 2011), and a recent study suggests a 'Shanghai Effect', whereby African countries trading with China begin to reflect comparatively low Chinese labour protection standards (Adolph, Quince, & Prakash, 2017). This paper investigates a potential alternative channel through which China may impact African labour practices, namely in their capacity as a major donor. ...
... With the rise of China as a major player in Africa, however, this perspective may need rethinking. As noted, a recent study (Adolph et al., 2017) suggests a less optimistic 'Shanghai Effect', whereby African countries trading with China begin to reflect comparatively low Chinese labour protection standards. ...
... With the rise of China as a major player in Africa, however, this perspective may, as noted, need rethinking. In a recent study Adolph et al. (2017) suggest a less optimistic 'Shanghai Effect', whereby African countries trading with China begin to reflect their low labour standards. The authors argue that China's noninterference policy implies that the Chinese government does not exert any pressure on African governments to uphold any form of labour standards, that the fact that China does not have independent labour union means that there are no activist groups to put pressure on exporters to China (or Chinese firms importing from abroad) regarding labour practices, and finally, that absent a free press, firms do not face the same kind of reputational vulnerability, even if activist groups were to protest. ...
Chinese firms operating in Africa are often accused of violating international labour standards and not adhering with national labour laws. Considering China’s tendency to maintain control over development projects throughout the entire implementation phase, using Chinese contractors for work performed in the recipient countries, the present paper investigates whether China impacts African labour practices in their capacity as a donor. Specifically, we use a new data material allowing for systematic quantitative analysis of Chinese development finance to investigate whether Chinese development projects affect trade union involvement. Matching geo-referenced data on the subnational allocation of Chinese development projects to Africa over the 2000–2012 period with 41,902 survey respondents across 18 African countries, our estimation strategy relies on comparing the trade union involvement of individuals who live near a site where a Chinese project is being implemented at the time of the interview to those of individuals living near a site where a Chinese project will appear in the future, but where implementation had yet to be initiated at the time of the survey. The results consistently indicate that Chinese development projects – unlike the projects of other major donors – discourage trade union involvement in the local area.
... In the agriculture sector, some of the world's environmentally most problematic crops, such as oil palm and soy, are now mainly traded between Southern countries. Evidence is growing that these shifts in end markets can undermine social and environmental conditions in producer countries (Adolph, Quince, & Prakash, 2017;Kaplinsky, Terheggen, & Tijaja, 2011;Schleifer, 2016Schleifer, , 2017. Thus, from a private governance perspective, an open research question is whether voluntary social and environmental standards can gain traction in these emerging markets (Nadvi, 2014). ...
... In contrast, scholars studying social and environmental standards in the context of South-South trade point to a 'race-to-the-bottom' dynamic. For example, with reference to Vogel's 'California effect' (1995), Adolph et al. (2017) find evidence for a 'Shanghai effect'. Analyzing a panel of 49 African countries, they show how a high export dependency on China is associated with lower labor standards in producer countries. ...
... In both markets, the RSPO's uptake figures remain far behind expectations (see Figure 1 and case studies for details). The broader patterns observed in the two cases thus fit the prevailing narrative about South-South trade triggering a race-to-the-bottom in producer countries (Adolph et al., 2017;Kaplinsky et al., 2011;Schleifer, 2016Schleifer, , 2017. ...
Private governance programs are now an important source of regulation in global value chains – particularly in context of North–South trade. But can these programs play a similar role in the value chains feeding into fast-growing emerging markets like China and India? Most scholars doing research on the topic draw a pessimistic picture. They argue that the scope conditions for private sustainability governance are not yet present in these markets. Our analysis of the Roundtable on Sustainable Palm Oil – a leading non-state certification program – in China and India partially confirms this view. At the same time, however, we find that emerging markets are not a unified category. We observe that sustainable palm oil is beginning to gain momentum in China, whereas uptake in India remains much weaker. We trace this back to a number of key market conditions, which we show are more favorable in China. In addition, our analysis highlights the role of the Chinese state in creating awareness of and shaping firms’ interests in sustainable palm oil.
... The set of assumptions associated with the importing country broadly align with theories of 'trading up' or the 'California effect' (Vogel, 1995), whereby trade with developed countries can drive up standards. Clearly, with the rise of South-South trade, the concern is that there may be a so-called 'Shanghai effect' (Adolph et al., 2017), whereby trade between developing countries drives standards down. These assumptions seem sensible in theory, and have been recently reinforced through empirical study across a number of agricultural commodities (Dauvergne and Neville, 2009;Kaplinsky et al., 2011;Adolph et al., 2017;Dauvergne, 2017;Schleifer, 2016Schleifer, , 2017. ...
... Clearly, with the rise of South-South trade, the concern is that there may be a so-called 'Shanghai effect' (Adolph et al., 2017), whereby trade between developing countries drives standards down. These assumptions seem sensible in theory, and have been recently reinforced through empirical study across a number of agricultural commodities (Dauvergne and Neville, 2009;Kaplinsky et al., 2011;Adolph et al., 2017;Dauvergne, 2017;Schleifer, 2016Schleifer, , 2017. ...
While there is a substantial body of research focused on the links between North-South trade and sustainable development, research on South-South trade and sustainable development is still in its infancy. Given current understandings of the drivers of sustainable development, one might expect increasing trade in agricultural commodities within the global South to have a negative impact on sustainable development opportunities. In this sense, the Ceylon tea industry presents a puzzle. Despite exporting most of its tea to Southern markets, it has been among the top performers in terms of economic, social, and environmental practices. As such, the case raises a number of questions around shifting trade patterns and their implications for sustainability outcomes. I address these questions through four propositions – three mechanisms and one condition – through which South-South trade can expand the opportunities for sustainable development. While the exact nature of sustainable development outcomes will ultimately be decided through domestic political struggles, shifts toward more equal trade can make sustainable production more likely. Overall, the analysis draws attention to nuanced ways in which end markets shape their respective value chains and how these dynamics impact the potential for actors operating at the bottom of supply chains to shape sustainability outcomes.
... In the 'economics' and 'political sciences' fields Philips et al. (2015) analyzed vote shares in multiparty elections; Lantz et al. (2014) studied state budgets priorities; Adolph (2013) examined the central bankers' career composition and Adolph et al. (2017) studied via compositional data, the so-called 'Shanghai effect' in African countries exporting to China. The results show the effect on labor practices in African countries due to their composition of export markets aside from China. ...
... Decarbonization creates new economic opportunities, but most of them have tended to be located outside coal communities. Moreover, in a replay of the "pollution-haven"  and the "race to the bottom" debates  and more recently the "China shock"  and the "Shanghai effect" , miners and unions fear that climate regulations will incentivize companies to move their energy-intensive production to developing countries that are exempt from mandatory emission reduction targets under the 1998 Kyoto regime. And even if these countries have announced net zero targets, miners and unions doubt their political will to implement them. ...
Decarbonization creates a global public good but imposes costs on specific communities such as those employed in the fossil fuel supply chain. "Just Transition" (JT) policies that compensate cost-bearing communities are expected to build political support for decarboni-zation. In developing countries, JT policies are often financed by foreign aid and managed by governmental actors. To assess public support for JT, we identify four policy types, depending on whether they target individuals or the local government or community, and how quickly individuals receive benefits. These are: individual compensation (individual, quick), financial support to local governments (community, quick), individual reskilling (indi-vidual, delayed), and upgrading local infrastructure (community, delayed). To assess public preferences about JT policies, we focus on South Africa which has a large coal mining sector. Our in-depth interviews with 51 coal miners, Eskom power plant workers, and community members in Mpumalanga province reveal that most interviewees favor monetary compensation which provides direct support to individuals in a short period of time. Moreover , given the low trust in the government, interviewees do not want government or the labor unions to administer the JT funds. Instead, they favor independent actors, such as NGOs and the judiciary, to oversee JT disbursal.
... Then, our results suggest that as countries become increasingly integrated into the global economy, they reduce their level of informal activity, probably because informal activities such as smuggling for tariff evasion are reduced (Blanton et al., 2018). In addition, international competitors and multinational corporations may disseminate to local firms the best regulatory standards, norms, and industrial practice and thus encourage participation in the formal sector (Greenhill et al., 2009;Adolph et al., 2017). ...
... Another outcome used is intergenerational occupation mobility, 8 which was found to increase in India (Ahsan and Chatterjee, 2017). Finally, labor practices are used as outcome variable in Adolph et al. (2016) to investigate whether increasing exports from Africa to China negatively affects on the labor practices in each of the 49 African countries considered. The results indicate that negative effects are only found for a small number of countries. ...
This paper compiles a systematic review of research papers that identify the effect of international trade and trade liberalization policies on socio-economic targets linked to the sustainable development goals (SDGs). A comprehensive overview of the existing literature is provided, focusing on papers that identify causality and covering topics that have not been systematically analyzed previously. While existing literature reviews have focused on the effects of trade openness on economic growth, its consequences for other social- and sustainable-related goals have received much less attention. We restrict the review to social- and sustainability-related SDGs and classify the empirical findings in four categories. First, we analyze the extent to which trade affects poverty (SDG-1, 2, 8). The findings indicate that trade increases average incomes in most cases and that trade reforms that include the agricultural sector generally reduce poverty. Second, we examine labor market outcomes and analyze how international trade affects wages, unemployment, and informality (SDGs-1, 5, 8). We find that with more trade, employment and wages increase in the most dynamic sectors, but decrease in others with increases in informality in some developing countries. The third bloc documents papers that evaluate whether trade is good or bad for environmental quality, evaluating how trade reforms and increases in openness affect the environment at the macro and micro level (SDG-3, 7, 11, 12, 15). The reviewed research indicates that the effects of trade on environmental quality are complex and depend on the sectors that liberalize and the existence of environmental standards linked to trade agreements. The fourth category concerns the effect of trade flows on food security, hence questioning whether opening the economies could contribute to better performance in SDG-2 and SDG-9. In this area, the literature is still incipient and deals mainly with correlations. More research is needed to better define the concept of food security and related indicators and to collect better data. In summary, this systematic review should guide policymakers in developing countries in the decision-making process related to trade and industrial policies. The main recommendation is to consider the main findings when designing new trade policy strategies concerning both unilateral trade liberalization and free trade agreements negotiations.
... Furthermore, this practice diverts the labour legislation applicable to a specific African country in which they operate (Cooke et al., 2018). Moreover, African countries trading with China have purportedly adopted the Chinese labour legislation that tends to disregard the protection of workers (Adolph et al., 2017). ...
... As the emerging BRICS economies consume more and more commodities, GVCs are shifting to place economic leverage into the hands of lead firms located in these emerging economies (Gereffi 2014 conditions are in place, e.g., 'California effect' (Vogel 1998). In contrast, scholars studying social and environmental standards of South-South trade relations point to a 'race-to-thebottom' dynamic, e.g., 'Shanghai effect' (Adolph et al. 2017). ...
In the past two decades, the Indonesian palm oil industry has come under intense global scrutiny due to various environmental issues, from tropical deforestation to biodiversity loss. The WWF, with several global consumer goods manufacturers still rely heavily on palm oil for their products, came up with the Roundtable on Sustainable Palm Oil (RSPO) certification in 2004 as a form of voluntary, private environmental governance. After 15 years of RSPO existence, its uptake within Indonesia is somehow weak, with the RSPO only manage to certify 2.12 million hectares oil palm plantations or 13% of the total area throughout the archipelago, as of 2019. This research seeks to investigate the reasons behind it. Through combination of interviews and literature reviews, I found that the role of Indonesian producers association (GAPKI), the pull-factor of shifting export markets, and the challenges faced by smallholders play important roles in determining the success of RSPO uptake in Indonesia.
... Therefore, Western scholars suppose that China's Belt and Road Initiative has increased the competition in CEE because all of the countries in the region hope to become a bridge between China and Europe through this commercial project. Such fierce competition, coupled with the problem of collective action, produces the so-called Shanghai effect : The practices of foreign companies in a weakened regulatory environment will spread to local companies through competitive pressure, resulting in a decline in the overall governance quality of these countries. The impact is mainly reflected in the following three aspects. ...
The close development of the economic relations between China and Central and Eastern Europe (CEE) since 2012 has triggered the European Union’s criticism of China’s foreign policy towards Eastern European countries. The European Union believes that China’s investment growth has led to a governance crisis in CEE countries. Based on the global governance indicators of the World Bank and the outward foreign direct investment (OFDI) data of the Ministry of Commerce of China, this paper conducts a test using the panel data model and the regression discontinuity method. An imbalanced panel dataset is adopted, covering 16 CEE countries from 2000 to 2018. The empirical research results indicate that, representing a small proportion of the investment inflows to CEE countries, China is not yet able to exert a domination effect on the region, and China’s economic power is far less than the European Union’s regulatory influence. Furthermore, China’s share of the OFDI in CEE has a U-shaped effect on the regulatory quality of host countries, and the two have a mutually causal relationship. Specifically, the impact on the host country’s regulatory quality is first manifested in the Shanghai effect, and when China’s share reaches a certain level, it is manifested in the California effect. The U-shaped effect is associated with the strategic factors of CEE countries and China’s positive contribution to good global governance.
... Some recent scholarship shows evidence along these lines. Adolph, Quince, and Prakash (2017) focus on African workers and their economic ties to China, and they find that labor rights tend to deteriorate. ...
In the competition between American states for economic development, about half of American states offer lower levels of labor rights in the form of “right-to-work” (RTW) laws. RTW states often tout their advantages in competing for foreign investment, but do foreign companies really want weaker labor regulation? Many foreign firms locate production in the United States not to lower labor costs but for other reasons, such as proximity to consumers or to employ highly skilled workers, implying that differences across labor regulations within rich countries may be declining in importance. In this article, we investigate the relationship between RTW laws and greenfield foreign direct investments. In particular, we explore recent RTW changes across two states, Indiana and Michigan, controlling for national trends in foreign investment. Adopting RTW increases foreign investment in manufacturing in both states, but Michigan's RTW law is associated with gains in service-sector projects even while Indiana's is not. While RTW may attract more manufacturing, it is not enough to generate broad-based gains across the economy.
... Comparable opinions have been noted across the African continent. A research of 49 African countries concluded that Chinese investments had adverse impacts on labour practices in Africa (Adolph, Quince & Prakash, 2017). Similarly, Isaksson and Kotsadam (2018) revealed the restricted freedom of labour rights and the abuse of employees in Chinese companies operating in Africa. ...
This study examines the Chinese employer compliance with section 6 (1) of Zimbabwe's Labour Act, aimed at protecting employees' right to fair labour standards. Chinese business investments in African countries is substantial. Zimbabwe's economic development and employment creation prospects are partly attributed to the Chinese investments, with the government envisioning more strengthening of economic relations with China. Nevertheless, concerns regarding human rights abuse in Chinese-run organisations continue to be a key challenge with claims of violations of the right to fair labour standards an issue of interest in the country. The study explored the views of 14 human resource management practitioners within Chinese enterprises, exploring their experiences and perceptions regarding employer compliance to fair labour standards. The findings reflect that employer compliance with the legal provisions is a major challenge. Employees continue to experience unfair labour standards in many Chinese organisations in Zimbabwe while the role of the HR practitioners within these organisations is overlooked. There is a need to constantly conscientise Chinese investors of the country's labour laws to ensure adherence to fair labour standards.
... In order to maximize the reputation payoff, Reilly (2012) explains that one approach for China regarding foreign assistance is to propose alternative standards of non-interference and respect for the independence, national sovereignty and identity that distinguish it from the norms promoted by developed countries. Similarly, Adolph et al. (2017) find that China's downplaying of regulations such as labour and environment protection could create a 'Shanghai Effect' whereby some counterpart countries no longer have the impetus to improve their domestic regulatory standards. Therefore, some events under this case cluster challenge Western-dominated norms and thus come under the approach of Regime Shifting. ...
What are the roles China plays and what approaches does China take to the global order? This paper goes beyond the singular and static view on the roles of states as either status quo or revisionist and introduces more subtle roles of states with multi-approaches of Status Quo, Parallel Supplement, Nested Enhancement, Regime Shifting, Competitive Regime Creation and Ideological Confrontation. After coding 1889 events from the ‘Belt and Road Portal’ and then taking eight most frequent case clusters of the BRI as representative cases, the congruence analysis leads to the main argument that China plays multiple roles of rule taker, rule reformer, rule breaker and rule innovator. The contribution is both theoretical and practical. It improves the typology of states’ approaches to the global order and helps to interpret the roles of emerging powers for the global order. By designing the BRI Index and coding the case cluster, this paper provides a new way to identify the representative case of the BRI.
... Along those lines we find that FDI from China, an autocracy with poor human rights conditions, does not respond to human rights conditions in a manner similar to US FDI or aggregate flows of inbound FDI (i.e., Blanton & Blanton, 2007;Harm and Ursprung, 2002). We also find that democracy has a positive impact on FDI even in a case where the home country is not only non-democratic but takes a very critical view of Western attempts to encourage democratic rule in other countries (Adolph et al., 2017;Scheipers & Sicurelli, 2008). This does imply that the more pragmatic benefits of democratic institutions for firms may be generalizable across vastly different types of home countries. ...
China has rapidly become one of the leading source countries for foreign direct investment (FDI), though many aspects of Chinese capital remain under examined. In this study we analyze the sociopolitical determinants of Chinese FDI, paying particular attention to the role of human rights and democracy. We hypothesize that Chinese capital is drawn to host countries with worse human rights conditions, given the lack of sensitivity that Chinese firms – particularly state-owned enterprises – have to potential “spotlighting” as well as the underdeveloped status of corporate social responsibility (CSR) practices. However, we posit that Chinese firms will be drawn to more democratic hosts due largely to experiential learning effects (negative experiences with autocratic hosts) and pragmatic advantages of investing in a state with democratic institutions. We test these hypotheses across 195 countries for the years 2005–2013, and find Chinese FDI to be negatively and significantly related to physical integrity rights and positively related to democratic institutions.
... This trend is particularly pronounced in India and China, and to a lesser extent in Brazil, where a growing share of global consumption has been driven by low-income consumers; as a result, there is higher demand for low cost and little concern for product and process standards (Adolph et al., 2017;Horner & Nadvi, 2018;Kaplinsky & Farooki, 2010;Schleifer, 2016Schleifer, , 2017. Southern consumers' growing demand, whether domestic or foreign, provides an attractive target for producers, particularly those that are unable to attain the TBG threshold referred to above. ...
Recent scholarship on transnational business governance has begun to examine public-private interactions and the active role of governments. We make two key contributions that integrate and expand this literature. First, in juxtaposition to functionalist accounts, we foreground the fundamentally political and often contentious character of these interactions. As private transnational governance schemes and standards 'hit the ground', private-public interactions, we argue, are embedded in national political arenas and tied to domestic distributional struggles among competing regulatory coalitions. Building upon multiple empirical streams of research, we develop a political-strategic framework that maps the diversity of Southern government responses (substitute, adopt, repurpose, replace or reject) to transnational private governance. Our framework shows that government responses are a function of both strategic fit with domestic industrial capabilities and structures, and strength of developmental state capacity. Second, our proposed framework adopts the vantage point of Global South governments and industries, particularly how development challenges and strategic options within global value chains affect their understanding of, and responses to, transnational schemes and standards. This is an important corrective to a Northern bias in the private governance literature.
... The market in which main products are sold can affect certification decisions (Adolph et al. 2017;Newman et al. 2017), so column (3) shows the result for firms from the sample who export at least some part of their output. The estimates show a negative correlation between certification and risk for exporting firms, but the effect is not precisely determined. ...
This chapter investigates the scope for international private standards to play a role in reducing business risk among the small and medium enterprises in Vietnam. Business risk is measured as variability in revenue, variability in customer base, practice of making informal payments, and temporary firm closure. The results show lower levels of business risk among certified firms, especially for firms in the middle deciles of the risk distribution. This finding is robust to the use of different business risk measures. Certification also correlates negatively with risk for technologically advanced firms, as well as firms located in rural areas and northern provinces of Vietnam. The results suggest that firms could find protection from business downsides by investing in internationally recognized quality management tools.
... When a surplus of low-skilled workers exists (Rudra 2002;Milner and Rudra 2015), or when economic downturns lead to reduced demand in key consumer markets (Lim and Prakash 2017), the consequences for workers may be even more severe. These perils often are exacerbated by the domestic political situations in apparel-producing countries (Adolph et al. 2017;Mosley 2011). Countries with weak state capacity lack adequately-staffed labor or health and safety inspectorates (Piore and Schrank 2008;Schrank 2013). ...
Most research on private governance examines the design and negotiation of particular initiatives or their operation and effectiveness once established, with relatively little work on why firms join in the first place. We contribute to this literature by exploring firms’ willingness to participate in two recent, high-profile private initiatives established in the aftermath of the Rana Plaza disaster in the Bangladesh ready-made garment (RMG) sector: the Accord on Building and Fire Safety and the Alliance for Worker Safety in Bangladesh. Using novel shipment-level data from U.S. customs declarations, we generate a set of firms that were “eligible” to join these remediation initiatives. We are able to positively attribute only a minority of US RMG imports from Bangladesh to Accord and Alliance signatories. Firms with consumer-facing brands, publicly-traded firms, and those importing more RMG product from Bangladesh were more likely to sign up for the Accord and Alliance. Firms headquartered in the USA were much less likely to sign onto remediation plans, especially the Accord.
... The market in which main products are sold can affect certification decisions (Adolph et al. 2017;Newman et al. 2017), so column (3) shows the result for firms from the sample who export at least some part of their output. The estimates show a negative correlation between certification and risk for exporting firms, but the effect is not precisely determined. ...
... If governments increase labour repression when export competitiveness is determined by costs, we might expect them to reduce repression in the presence of pro-labour export incentives. Indeed, countries that export to places with stronger labour rights also tend to reform their labour laws (Greenhill et al, 2009;Adolph et al, 2017;Newman et al, 2018). Similarly, Vietnamese manufacturers expressed greater willingness to improve wages and working conditions in order to enter high value foreign markets (Malesky and Moseley, 2019). ...
There is a complementary relationship between export incentives and domestic activists in improving workers’ rights in global supply chains. Governments will repress labour in order to boost export competitiveness; resistance is then sporadic, ineffective, and dangerous. If governments anticipate economic rewards, they may reduce labour repression; but domestic activists must simultaneously mobilise for substantive reforms. I demonstrate this by exploiting within-case variation in Bangladesh and Vietnam, showing what happened before the introduction of export incentives; in their presence; and after they subsided. Vietnam liberalised labour laws in order to join the Trans-Pacific Partnership; and Bangladesh did likewise in order to salvage its reputation after Rana Plaza. Activists became less fearful once Bangladeshi politicians had announced reforms. They registered unions, demonstrated en masse, and secured a 77% increase in the minimum wage. In Vietnam, party reformists were crucial in persuading their conservative colleagues that TPP would help strengthen the regime’s hold on power, while pushing for genuinely independent unions. This paper explicates the synergies between export incentives and domestic mobilisation by connecting protagonists’ motivations to macro-level reforms, via process-tracing and in-depth qualitative research.
... Plotted points show the cumulative percent change in each budget share four years after either unemployment or real income per capita increases by one standard deviation from the mean level across states. SeeFigure 2for further details.group; seeAdolph (2013) andAdolph, Quince, and Prakash (2017) for further details and examples on constructing counterfactuals for compositional covariates. ...
Because the American states operate under balanced budget requirements, increases in spending in one area typically entail equal and opposite budget cuts in other programs. The literature analysing the correlates of government spending by policy area has mostly ignored these trade-offs inherent to policymaking, failing to address one of the most politically interesting and important dimensions of fiscal policy. Borrowing from the statistical literature on compositional data, we present more appropriate and efficient methods that explicitly incorporate the budget constraint into models of spending by budget category. We apply these methods to eight categories of spending from the American states over the years 1984–2009 to reveal winners and losers in the scramble for government spending. Our findings show that partisan governments finance their distinct priorities by raiding spending items that the opposition prefers, while different political institutions, economic conditions and state demographics impose different trade-offs across the budget.
... Finally, future analysis should examine compositional trade data to determine how the types of goods a country trades, in addition to the sorts of partners that it trades with, affect its adoption of VEPs such as ISO 14001. This approach was recently introduced by Adolph et al. (2017) and applied to the diffusion of labor standards, and it is likely transferable to VEPs such as ISO 14001 as well. Specifically, it may be that ISO 14001 diffuses through trade of some goods and services at greater rates than it does through others and that, as a result, exports to countries that demand one set of goods and services produce different diffusion outcomes than exports to countries that demand another set of goods and services. ...
Scholars have consistently found that firms in developing countries adopt voluntary environmental programs (VEPs) in high numbers when their major trade partners are home to many VEP-certified firms. This reflects the following dynamic: Importers based in countries with many VEP-certified facilities demand similarly sustainable production processes from trade partners, and so exporting firms in partner countries adopt VEPs to signal their sustainable practices. Studies have identified characteristics of developing countries that make local exporting firms more likely to adopt VEPs as a signal; however, there has been little analysis as to the country-level characteristics that make importers more (or less) likely to demand VEPs from suppliers abroad, beyond having many VEP-certified firms themselves. This study considers this matter, theorizing that VEP diffusion only accompanies exporting to countries with high levels of income and education, as well as a high number of VEP-certified firms. Panel data analysis provides support for the theory, showing that developing countries only experience trade-based diffusion of ISO 14001 (a widely adopted VEP) through their exports to countries with high income and/or education levels. In contrast, exporting to countries that lack these characteristics creates no such diffusion, even where importing countries’ VEP certification levels are high. Instead, such trade produces a “stuck in the mud” effect, as developing countries’ certification levels stagnate even as those of their import partners rise.
... The country supported some countries politically and economically through its credit and grant scheme. Adolph et al., (2016) studied how the trade of African countries with China is affecting their labor; they called it The Shanghai Effect. Their study is mainly on how the exports from Africa to China are affecting labor practices in Africa. ...
... According to the US International Trade Commission (2014), Africa's trade with China accounted for only $6 billion in 1995, but the figure rose to over $200 billion in 2014. The trade volume is expected to rise further to a new record this year (Adolph, Quince, & Prakash, 2017). China is now leading foreign investments in Africa. ...
This chapter explores the reasons for African countries’ low achievements in learning and knowledge gain from partnerships with China and suggests ways for improvement in gaining strategic and value-adding knowledge. We analyze 29 Africa-China partnerships in 12 countries. Based on qualitative and interview-based data, we identify the weaknesses that prevented African countries from gaining significant knowledge. We propose a juxtaposition of the strategic and institutional perspectives toward effective knowledge gain. With respect to the smiling curve and global value chain, we suggest to African partners to target higher value-adding knowledge: strategic and sophisticated. Additionally, we propose the development of an intra-Africa interconnected network for knowledge transfer and experience sharing.
... It suggests that stakeholders in China were not as concerned about the CSR practices of firms exporting goods into their market during the period under study. This is consistent with earlier findings of unique characteristics of CSR as a management practice in China ( Moon and Shen, 2010 ) and recent evidence of declining labour standards in Africa after increasing exports to China ( Adolph et al., 2017 ). Firms that only export to China do not have levels of CSR that are different when compared to firms that only sell domestically, as shown in Table A.8 (Panel A) in the Appendix. ...
We investigate the relationship between corporate social responsibility (CSR) practices of domestic Vietnamese firms and their engagement with foreign markets. We develop a measure of CSR that combines compliance with labour standards, management commitment to CSR, and corporate community related actions; and find a strong relationship between this measure and participation in international markets. Results suggest that both exporting and importing firms engage in more CSR activities. Conditional on exporting, we show that Vietnamese exporters to China are less involved in CSR related activities, and that exporters to the US engage in more community related CSR. This may reflect differences in stakeholder preferences across markets.
Scholars have long debated whether trade leads to a ‘race to the bottom’ or to a ‘race to the top’ in the labour standards of developing countries. Recent literature has offered encouraging findings consistent with the latter theory: stringent labour laws diffuse from importing countries to their export partners in the developing world. This finding has advanced our understanding of trade and labour rights, but more fine-grained analysis can further clarify what sorts of bilateral trade partnerships generate diffusion. In particular, South–South trade appears not to be characterised by the competitive pressures and foreign policy norms that produce labour rights diffusion. As such, this study compares the diffusion effects of South–South trade to those of other types of trade, using data covering 104 developing countries from 1986 to 2011. Results demonstrate that South–South trade is not accompanied by diffusion of labour laws, in contrast to other types of trade. This finding has important implications: whereas empirical results in earlier work suggest that developing countries will experience labour rights betterment if they export intensively to partners with stringent labour standards, my findings clarify that this will not occur if those partners are countries of the Global South.
... In contrast, SWFs from Libya, Algeria, Botswana and Nigeria that do not hold such promise may encounter setbacks and challenges to their legitimacy in host countries (Sovereign Brands Survey, 2010). Similarly, investments by SWFs from less reputable countries may serve as a warning signal of potentially declining corporate governance practices in a host country (Adolph, Quince & Prakash, 2017). While Norway's SWF epitomizes the salutary outcomes of a government-owned foreign institutional investor, future work could unpack the deterring role of certain intermediaries. ...
Bringing together leading experts in trade law and policy, this volume investigates the coherence between the European Union's trade policy and its non-trade objectives. Adopting an interdisciplinary approach, it highlights previously unaddressed dimensions of EU policy objectives and outcomes. With a range of illustrative case studies, the contributions offer in-depth analysis while making key issues and policy conclusions accessible to readers without specialist training. Pushing the frontiers of research on trade, investment, and non-trade issues, the volume advances debates concerning the reform of the international trade regime and the EU's adoption of a new trade policy. Bolstered by a diverse range of contributors and perspectives, this expansive collection recognises the achievements of the current EU trade policy, assesses its limits, and puts forth actionable recommendations for how it may be improved.
Is reciprocity possible in human rights agreements? This article argues that human rights agreements can create negative diffuse reciprocity if there is reliable information about countries’ compliance levels. The article analyses the link between information on countries’ non-compliance with the International Covenant on Economic, Social and Cultural Rights on the one hand, and countries’ efforts to protect social economic rights on the other. It finds that the more information is published on violations of rights, the lower the levels of countries’ efforts to protect these rights. This means that countries practice negative diffuse reciprocity with regard to the International Covenant on Economic, Social and Cultural Rights. This is a notable finding since there are several factors working against the practice of reciprocity in human rights agreements. The article draws theoretical conclusions regarding the conditions for reciprocity in human rights agreements and sheds new light on the concept of reciprocity and its link with information.
Over the last 25 years, the BRICs asserted themselves as drivers of globalization. But what does their new‐found prominence mean for working conditions at home? Using a novel sub‐national database covering outward investment linkages and working conditions in Brazilian municipalities, this study tests whether a direct investment in Europe leads to the introduction of decent working conditions in Brazil. The empirical results provide strong support for the investing‐up effect using a mixture of panel data analysis and text analysis. The results suggest that economic integration with high‐standard developed countries can act as a powerful mechanism for labor standard improvements in developing countries.
Does foreign direct investment (FDI) lead to better or worse labour standards in developing countries? We argue that it depends on the type of labour right, and how costly it is to protect it. We propose that governments are likely to follow international pressure and ‘climb to the top’ of improved labour standards, but only for those rights that do not incur direct costs to foreign investors, such as collective bargaining rights. In contrast, we expect that governments engage in a ’race to the bottom’ when it comes to rights that bear immediate costs for firms, such as overtime pay. To test our argument, we use novel data to distinguish between the legal protection of (1) fair working contracts, (2) adequate working time, (3) dismissal protections, which are more costly; versus (4) collective worker representation, and (5) industrial action rights, which are relatively cheaper to grant. Our panel data analysis for 75 developing countries (1982–2010) shows that higher FDI stock and flow is indeed connected to better protection of collective rights, while FDI flow is connected to a decline in relatively expensive outcome rights. These results remain robust across a range of model specifications.
Research has documented labor conflict within foreign-owned, and especially Chinese-owned, manufacturing firms in sub-Saharan economies. Yet, systematic comparisons of foreign versus domestic firms are rare, and it remains unclear whether labor conflict is a phenomenon that affects emerging industries or is specific to foreign firms. Drawing on a large firm survey in Ethiopia, we show that foreign firms hire similarly educated and experienced workers. They also offer comparable salaries, benefits, and hours than domestic firms, after controlling for firm size and age. Nevertheless, they experience more complaints, strikes, and protests, with Chinese-owned firms reporting particularly high rates of labor conflict. To scrutinize these findings, we conduct case studies of labor management in six domestic and eight foreign-owned firms around Addis Ababa, Ethiopia. We observe antagonistic labor relations in five foreign-owned firms, four of which are Chinese-owned. In these firms, managers perceive employees as using labor laws to take advantage of them, whereas employees see labor laws as a basis for harmonious labor relations. In the remaining firms, managers frame their firm policies as consistent with employee perceptions of labor laws. We conjecture that the visibility of formal labor institutions leads employees to interpret disagreements as intentional disrespect, rather than ignorance. Our findings suggest that misaligned perceptions about the role of local labor institutions may be an important driver of conflict in foreign-owned firms.
Chinese multinational corporations (MNCs) in Africa are often criticized for hiring Chinese expatriates at the expense of native workers. This raises the possibility that Chinese MNCs, unlike most non-Chinese MNCs, fail to contribute to local employment or the skill improvement of native workers. In reality, the extent to which Chinese firms increase the number of expatriate workers varies widely across host countries. When does Chinese FDI increase the number of Chinese expatriate workers in a host country? Do Chinese MNCs rely more heavily on expatriate workers than do MNCs from other countries? To answer these questions, I conduct a cross-national analysis of a panel dataset of Chinese workers in 49 African host countries from 2000 to 2018. This study finds that Chinese FDI only increases the number of Chinese workers in host countries with weaker collective labor rights. In host countries featuring stronger collective labor rights, Chinese FDI does not increase the number of Chinese expatriate workers. The firm-level analysis of the African Investor Survey of 2010 also shows that Chinese MNCs hire more non-native workers than do non-Chinese MNCs only when investing in countries with weaker collective labor rights. These findings highlight the role of host countries’ institutions in conditioning the impact of FDI.
Human-induced changes in climate have affected the environment to the extent that any more economic development at the cost of the environment will be too costly. Thus, sustainable development options posing no additional harm to the environment are the only viable option. This study aims to examine the likely environmental impacts of infrastructural developments through the China–Pakistan Economic Corridor (CPEC).
There is a scarcity of academic debate and discussion on the environmental impact of CPEC developments in laws and policies on the environment. The qualitative approach is followed in this study and official documents and reports are used to investigate the environmental challenges posed by CPEC.
The findings show three possible environmental concerns which could increase the climate change vulnerability of Pakistan. The coal-fired power plants are the most prominent threat based on their CO 2 contributions and smog. Second, cutting more than 54,000 trees for roads infrastructure will increase CO 2 concentration along the CPEC route. Third, increasing vehicle trafficking by up to 7,000 trucks per day on Karakorum Highway alone will release 36.5 million tons of additional CO 2 .
It is essential to rethink the environmental cost of CPEC. The study suggests economic and legal cooperation between Pakistan and China as a way forward to deal with climate change issues. Environmental laws should be a vital part of CPEC projects to ensure their safety, security and sustainability.
This study examines the effect of FDI openness to China and the rest of the world (ROW) on democracy levels of African countries in the short and long terms. We propose and test the hypothesis that the nexus between FDI openness and democracy is moderated by the grabbing and helping hands of regime corruption of African countries. We argue that in the short run, FDI openness will negatively impact democracy (grabbing hand) in corrupt regimes. However, in the long run there will be a positive effect (helping hand) as the revenue spillovers from the investment projects will reach the society empowering the middle class to demand better institutional qualities. We test these theories with a unique panel dataset spanning 2003–2017. Our dataset includes gravity model and politico-economic variables not only between China and African countries but also between the ROW. Building on examples from the existing research, we test the short-run impacts with dynamic GMM model (Blundell and Bond, J Econ, 87(1):115–143, 1998), whereas we test the long-run relationships with two stage least squares fixed effects models. To account for transaction costs and endogeneity problems, in the first stage we apply instruments on openness to both China and ROW FDI. We find statistically strong yet mixed results for our expectations. While in the short-run corrupt African countries that liberalize to Chinese FDI have lower democracy levels, in the long run, the FDI openness has a positive influence. Our results are robust to alternative measurements of democracy, 3- and 5-year non-overlapping smoothed averages and exclusion of top five countries with FDI openness to China and ROW.
Bu çalışmada yıllık veriler yardımıyla 2000-2018 periyodu için OECD üyesi 36 ülkede, büyüme ve dış ticaretin, işgücü üzerindeki etkisi araştırılmıştır. Toplam işgücü miktarı, dolar bazında 2010 fiyatlarıyla kişi başı GSYİH, dolar bazında 2010 fiyatlarıyla mal ve hizmet ihracatı, dolar bazında 2010 fiyatlarıyla mal ve hizmet ithalatı, GSYİH’nin yüzdesi olarak brüt sabit sermaye oluşumu ve nüfus artış oranının kullanıldığı çalışmada, Arelano ve Bond tarafından geliştirilen iki aşamalı GMM yöntemi uygulanmıştır. Ayrıca dış ticaret; ithalat ve ihracat olarak ayrı ayrı temsil edilmiştir. Yedi farklı modelin kurgulandığı analiz sonuçlarında ise; büyüme, ihracat ve ithalatın, işgücünü pozitif şekilde etkilediği sonucuna ulaşılmıştır. Ayrıca tüm modellerde birer kontrol değişkeni olarak kullanılan, brüt sabit sermaye oluşumu ve nüfus artışının da işgücü üzerinde pozitif yönlü bir etki bıraktığı saptanmıştır.
Laws restricting foreign funding to domestically operating nongovernmen-tal organizations (NGOs) have proliferated in developing countries. This is puzzling because Western powers support the norm that NGOs are critical for democracy and development, recommend governments partner with NGOs, and sometimes use trade sanctions to encourage adherence to this norm. We examine whether rising trade with China influences the onset of NGO restrictions. China, which has emerged as an important export destination, articulates a different norm of state sovereignty over NGOs and does not sanction developing countries that enact restrictive NGO laws. Analysis of 153 developing countries from 2000-2015 finds that increasing exports to China may double the risk of NGO crackdown, but only when accompanied by declining exports to Western democracies. NGO scholars should recognize there are multiple norms about state-NGO relationship and that norm acceptance is influenced by the economic clout of the power that espouses a particular norm.
Interaction between private sustainability standards and international trade has attracted much attention in the past decades. This paper reviews literature from different disciplines and discusses how market-driven private standards affect producers in exporting countries through trade. A large body of literature is found for interaction between public regulations and international trade. However, literature hasn’t discussed much about differences between public regulation-trade linkage and private standards-trade linkage. Literature review focuses on how findings on public regulations are relevant to private standards. Finally, Roundtable on Sustainable Palm Oil, a palm oil sustainability standard, is used to exemplify the discussion.
China's Belt and Road Initiative (BRI), launched in 2013, is rapidly subsuming much of China's political and economic involvement abroad. As a far‐reaching infrastructure development and investment strategy, officially involving more than 130 countries, the expansion of the BRI raises important questions about its environmental impacts and its implications for environmental governance. This article examines how China is actively and rapidly developing an institutional architecture for its envisioned “green BRI,” considering the key actors, policies, and initiatives involved in the environmental governance of the BRI. We find that the current institutional architecture of the “green BRI” relies on voluntary corporate self‐governance and a multitude of international and transnational sustainability initiatives. The effectiveness of the environmental governance of the BRI not only hinges on China's priorities and commitments, but also on the political willingness and capacity of BRI partner countries to maintain, implement, and enforce stringent environmental laws and regulations. We conclude by outlining several environmental governance challenges and an agenda for future research.
This article looks at the linkages between export to the European Union (EU), export to china and human rights policies. The article argues that countries that export to the EU at high rates are more likely to converge towards its policies than countries that don’t export to the EU. The article also argues that the rise of China as a significant economic actor does not undermine this process. The article tests these arguments by analysing the links between human rights protection in the EU and in China, and export to the EU and to China, on the one hand, and human rights protection in all the countries for which there are data, on the other. The results indicate that countries’ human rights policies are positively associated with the EU’s human rights policies and this association is conditioned by countries’ levels of export to the EU. The results further indicate that export to China does not undermine this pattern. The article draws conceptual and policy implications.
China becomes an active global provider of financial flows in recent years, and the Western Hemisphere also received more Chinese capital. The Chinese government has a significant role behind this trend, particularly with the active participation of Chinese State Owned Enterprises (SOEs) in overseas activities. This article investigates the possible political influence behind the outward Chinese financial flows in the Latin American and the Caribbean region, through an empirical analysis of Chinese financial flows and the United Nations (UN) General Assembly (UNGA) voting alignment. Countries receiving more Chinese capital may become more dependent on China, and hence vote aligns with China in the UN. This projection of political influence should also exist when more Chinese capital flow into strategically important sectors (mainly infrastructure). In addition, the empirical analysis also tests if the Chinese influence affects the traditional political alignment between the United States and regional countries through UNGA voting. Based on the Chinese financial data from both the Ministry of Commerce and the disaggregated flow-type and the sectoral position from the AidData, a panel data analysis is adopted to test the empirical relationship from 2000 to 2015. The result showcases a political alignment between China and the Latin American and the Caribbean countries that have received increasing Chinese outward financial flows, as well as for investments in strategic sectors (infrastructure). Meanwhile, the result also suggests that Washington’s political influence in the region has not yet been diminished despite a growth of Beijing’s financial flows and influence.
This article explores attitudes of Ghanaian traders towards an increasing Chinese influx into Ghanaian trading spaces and the impacts of Chinese merchants on Ghanaian traders and trading spaces. Despite a late entrance of Chinese merchants into Ghanaian trading spaces relative to Lebanese, Indians and Nigerians, the abrupt change in size of the Chinese trading community along with its huge capital and cheap goods have had big impacts on local trading spaces. We maintain that relations between Ghanaian traders and Chinese counterparts may be roughly described as complementary, collaborative and competitive. While the Chinese impacts are seen as positive by some Ghanaian traders and landlords, they are negative for others. Yet, we argue that these relations are also nuanced and rooted in each Ghanaian trader's position amidst the Chinese presence. This article contributes to the literature on dynamics of South-to-South movements. It adds to growing studies on contemporary Chinese emigrations and accompanying impacts in host communities.
This paper analyses the emergence of the ‘full package’ firm in India and its implications for workers’ strategies. A ‘full package’ firm expands outward, from low-value assembly-only products to high-value specialized garment production; consolidating under one roof. Historically, geographic and political barriers separated centres of value-creation (producers) and value-capture (brands and retailers) in the global garment sector. However, enhanced value-capture at the point of production has led to considerable consolidation organizationally, giving an increasingly symbiotic character to relationships within ‘buyer driven’ supply chains. Though this change aggregates the bargaining power of workers, it also introduces new obstacles to workers’ organization. The concomitant rise of supplier-end value capture allows garment trade unions to nonetheless demand greater shares. Thus, previously unviable modes and methods have become available to workers engaged in struggles with their employers in the globalized garment sector. This paper examines a protracted workers’ struggle in light of this process. In doing so, the paper demonstrates that codes of conduct and auditing alone cannot significantly impact labour standards because the needs of capital accumulation are greater than the threat posed by any auditing program or code. Ultimately, the paper demonstrates that labour rights within the garment GVC will not arrive through a rights-based approach -- though strong codes of conduct and independent auditing can assist -- but rather through a combination of an increased power of suppliers vis-à-vis buyers, greater workers' bargaining power with their direct employers, and -- critically -- workers' self organization.
Under what conditions does the global economy serve as a means for the diffusion of labor standards and practices? We anticipate variation among internationally engaged firms in their propensity to improve labor standards. Upgrading is most likely when a firm's products exhibit significant cross‐market differences in markups, making accessing high‐standards overseas markets particularly profitable. Additionally, upgrading is more likely when lead firms attach a high salience to labor standards. Therefore, while participation in global production induces “trading up” behaviors among firms overall, the effect strength varies across industries. We test our expectations via a survey experiment, which queries foreign firms operating in Vietnam about their willingness to invest in labor‐related upgrading. We find strong evidence for the effect of markups on upgrading choices and suggestive evidence for the saliency mechanism.
The existence of shadow economies is an important, yet understudied, issue for international political economy and development. This study examines how two distinct types of international economic engagement—economic openness and participation in International Monetary Fund (IMF) programs—affect the growth of shadow (informal) sectors. We theorize that increased economic openness will reduce the size of countries’ shadow sectors. More specifically, we posit that eliminating market-distorting trade barriers will decrease the incentives for shadow sector activities such as smuggling. Additionally, we posit that increased participation in global production and supply chains is likely to lead to a positive, “climb to the top” effect on states’ regulatory and labor policies that enhance the prospective benefits associated with formal sectors. Conversely, we argue that participation in IMF structural adjustment programs can lead to great shadow sector activity as IMF-imposed structural conditions might cause significant near-term economic hardship and degrade states’ regulatory capacity. The results from a panel of 145 countries from 1971 to 2012 indicate that economic openness reduces the size of the shadow economy, while participation in IMF programs is significantly related to a larger shadow economy. These findings have important implications for understanding how the divergent forms of international economic engagement might affect shadow economies.
This paper identifies two critical factors that shaped workers' sense of injustice and drove them to protest: a subsistence crisis and managerial corruption. A subsistence crisis means here a situation in which workers have incomes far below local minimum wages or no incomes at all for a period of time. Not all laid-off workers necessarily confront such a crisis. Those who do are ones who have been denied a minimum living allowance and lack alternative employment. Such workers, desperate to retain their subsistence, have a strong motivation to protest. The motivation increases if they believe that their economic plight is exacerbated by managerial corruption at the workplace-that is, that managers are enriching themselves by stripping the assets of enterprises that workers depend on for a living. However, this paper will argue that while both a subsistence crisis and managerial corruption cause discontent among workers, their roles in explaining protests are quite different. A subsistence crisis is the underlying force behind the collective actions China is witnessing, while managerial corruption only works upon an existing subsistence crisis. Workers tend to acquiesce in corruption in their factory so long as they do not see it as affecting their own lives in a significant way.
Forthcoming article in The World Economy (http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9701)
Africa’s largest trade partner, China, criticised for exchanging resources for
manufactures, has promised to increase imports and optimise the structure of
trade with Africa. Using a gravity model of China’s imports for the years 1995-
2009, we explore potential dynamics for this promise, uniquely accounting for
market economy recognition and Taiwan recognition. The former is associated with
increased imports, while the latter effect is ambiguous and statistically insignificant.
Comparison of projected against actual imports across three growth-path-aligned
economic geography typologies - resource-rich; landlocked and resource-poor;
coastal and resource-poor – sets out China’s imports trends in an abstract
framework of African export potential. We find not only ‘under’ importing across a
majority of resource-poor countries. We also find that current trade policy is the
least applicable to these comparatively poor exporters’ trade with China. If the
latter are to serve a broader catalytic role in Africa’s regional industrial
transformation as compared to the role of coastal and resource poor countries in
regional economic transformation in Asia and Latin America, China-Africa trade
and investment policies may need additional thinking.
Author Original version uploaded to SSRN: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2406253
As China’s footprint in African trade grows larger by the day, the need to contextualize this rise through comparative analysis becomes ever more necessary. This paper contrasts the sub-Saharan trade relations of both China and Europe with their respective designated stereotypes: those of a dragon and a dove. The article compares the trade dynamics on four levels: the policies and institutional mechanisms that shape the relationship; the composition of the trade flows; the geographic distribution of trade dominance; and the influence of norms and values on the trade pattern. It concludes that although there are empirical grounds behind these stereotypes, Chinese and European trade relations with sub-Saharan Africa are becoming more similar, partly due to a more hawkish European stance.
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.
In the period 1946-2001, there were 225 armed conflicts and 34 of them were active in all of or part of 2001. Armed conflict remains a serious problem in the post-Cold War period. For three decades, the Correlates of War project has served as the main supplier of reliable data used in longitudinal studies of external and internal armed conflict. The COW datasets on war use the relatively high threshold of 1,000 battle-deaths. The Uppsala dataset on armed conflict has a lower threshold, 25 annual battle-deaths, but has so far been available for only the post-Cold War period. This dataset has now been backdated to the end of World War II. This article presents a report on armed conflict based on this backdate as well as another annual update. It presents the procedures for the backdating, as well as trends over time and breakdowns for the type of conflict. It assesses the criteria for measuring armed conflict and discusses some directions for future data collection in this area.
This paper employs the standard gravity model to identify the quality of governance of China's African trade partners. As a benchmark, we perform the same analysis on other major African trade partners: France, Germany, UK, and USA. Data from 53 African countries in 1996–2009 show that only China is consistently willing to import more from African countries with a lower governance standing. By doing so; China fills a gap left open by the other major world economies, and might even play a key role in the future development of Africa.
This article investigates the nature of the linkages between trade and labor rights in developing countries. Specifically, we hypothesize that a “California effect” serves to transmit superior labor standards from importing to exporting countries, in a manner similar to the transmission of environmental standards. We maintain that, all else being equal, the labor standards of a given country are influenced not by its overall level of trade openness, but by the labor standards of its trading partners. We evaluate our hypothesis using a panel of 90 developing countries over the period 1986–2002, and we separately examine the extent to which the labor laws and the actual labor practices of the countries are influenced by those of their export destinations. We find that strong legal protections of collective labor rights in a country's export destinations are associated with more stringent labor laws in the exporting country. This California effect finding is, however, weaker in the context of labor rights practices, highlighting the importance of distinguishing between formal legislation and actual implementation of labor rights.
Chinese official union's reactions to labour contentions can be explained by its double institutional identity as both a state apparatus and the labour organization. Before the reform, the union did not confront tense conflicts between its double identity, as its representation function was absorbed by the paternalist state. As the state retreats from socialist paternalism, the union finds that its double identity becomes contradictory. What role the union is apt to play in any particular dispute issue is determined by whether and to what extent its double institutional identity is in conflict. Specifically, three patterns of the union's roles can be identified: representing, mediating and pre-empting. State corporatism remains the fundamental institutional parameter that shapes the union's behaviour. A combination of state corporatism binding the union and rampant capitalist assaults on workers tends either to produce more spontaneous protests or to force workers to seek independent organizing outside the ACFTU framework.
The authors examine the impact of the international human rights regime on governments' human rights practices. They propose an explanation that highlights a "paradox of empty promises." Their core arguments are that the global institutionalization of human rights has created an international context in which (1) governments often ratify human rights treaties as a matter of window dressing, radically decoupling policy from practice and at times exacerbating negative human rights practices, but (2) the emergent global legit-imacy of human rights exerts independent global civil society effects that improve states' actual human rights practices. The authors' statistical analyses on a comprehensive sample of government re-pression from 1976 to 1999 find support for their argument.
The skeptics of globalization argue that increased trade openness and foreign direct investment induce developing countries to keep labor costs low, for example, by letting children work. This article argues that there are good theoretical reasons why globalization might actually have the opposite effect. We test this with various measures of child labor and provide the first analysis of foreign investment in addition to trade. We present evidence that countries that are more open to trade and/or have a higher stock of foreign direct investment also have a lower incidence of child labor. This holds for the labor force participation rate of 10–14-year old children, the secondary school nonattendance rate and a count measure of economic sectors with child labor incidence as the dependent variables. Globalization is associated with less, not more, child labor.
Some scholars have rushed to judgment about the nature of the relationship between trade and conflict, making strong assumptions about the data upon which their conclusions rest. In this paper, we test these assumptions, showing that they are often not warranted and, thus, pose threats to many of our conclusions about trade’s impact on conflict. We discuss official trade statistics; the treatment of missing trade data; and problems with some decision rules being adopted within our research community. We introduce the new Correlates of War (COW) Trade Data Set; discuss the rationale behind our coding decisions; and compare this data set with other sets. The end result is a series of findings that should help our field advance its understanding of the often difficult issue of trade’s relationship with international conflict.
While a number of different theoretical models have been advanced to explain why states implement-or, indeed, do not implement-multilateral environmental agreements (MEAs), very little empirical work has been undertaken to validate their predictions. With a view to narrowing this gap, the present article adopts a large-N, econometric approach to test the explanatory power of four distinct models of compliance-domestic adjustment, reputational, constructivist and managerial-in the context of European Union (EU) environmental policy. Using data on the number of ofıcial infringements received by 15 member states for non-implementation of environmental directives over the period 1979-2000, we ınd that all four models make a statistically signiıcant contribution to explaining spatio-temporal differences in legal implementation. Thus, our results suggest that the implementation of MEAs is shaped by a combination of rational calculations of domestic compliance costs and reputational damage, domestically institutionalized normative obligations, and legal and political constraints. We conclude by suggesting a greater need for multi-causal theoretical models of supranational legal compliance. (c) 2007 by the Massachusetts Institute of Technology.
Regulators, industry groups, consultants, and individual companies have developed elaborate guidelines over the years for assessing and managing risks in a wide range of areas, from commodity prices to natural disasters. Yet they have all but ignored reputational risk, mostly because they aren't sure how to define or measure it. That's a big problem, say the authors. Because so much market value comes from hard-to-assess intangible assets like brand equity and intellectual capital, organizations are especially vulnerable to anything that damages their reputations. Moreover, companies with strong positive reputations attract better talent and are perceived as providing more value in their products and services, which often allows them to charge a premium. Their customers are more loyal and buy broader ranges of products and services. Since the market believes that such companies will deliver sustained earnings and future growth, they have higher price-earnings multiples and market values and lower costs of capital. Most companies, however, do an inadequate job of managing their reputations in general and the risks to their reputations in particular. They tend to focus their energies on handling the threats to their reputations that have already surfaced. That is not risk management; it is crisis management--a reactive approach aimed at limiting the damage. The authors provide a framework for actively managing reputational risk. They introduce three factors (the reputation-reality gap, changing beliefs and expectations, and weak internal coordination) that affect the level of such risks and then explore several ways to sufficiently quantify and control those factors. The process outlined in this article will help managers do a better job of assessing existing and potential threats to their companies' reputations and deciding whether to accept a particular risk or take actions to avoid or mitigate it.
The paper brings together the abundant and somewhat anarchic literature on child labor, isolating its central findings and analytical insights. The investigation is especially directed at the micro economics of why child labor occurs and the sort of policy that is likely to succeed in eradicating it. The paper also outlines new directions for analyzing the dynamics of child labor, the possibility of "child-labor traps" and the circumstances in which voluntary contracts should be banned. Various arguments for and against declaring child labor illegal are examined. A final section explores the economics of international child labor standards.
A growing number of preferential trade agreements (PTAs) have come to play a significant role in governing state compliance with human rights. When they supply hard standards that tie material benefits of integration to compliance with human rights principles, PTAs are more effective than softer human rights agreements (HRAs) in changing repressive behaviors. PTAs improve members human rights through coercion, by supplying the instruments and resources to change actors incentives to promote reforms that would not otherwise be implemented. I develop three hypotheses: (1) state commitment to HRAs and (2) PTAs supplying soft human rights standards (not tied to market benefits) do not systematically produce improvement in human rights behaviors, while (3) state commitment to PTAs supplying hard human rights standards does often produce better practices. I draw on several cases to illustrate the processes of influence and test the argument on the experience of 177 states during the period 1972 to 2002.I would like to thank Mike Colaresi, Dan Drezner, David Lake, Lisa Martin, Walter Mattli, John Meyer, Mark Pollack, Erik Voeten, Jim Vreeland, and two anonymous reviewers for their detailed and thoughtful comments on various drafts of this manuscript, as well as the many other people who have helped me by asking hard questions along the way. I would also like to thank Michael Barnett, Charles Franklin, and Jon Pevehouse for advice during the dissertation research that supports this article, and Alexander H. Montgomery for assistance in data management. All faults are my own. For generous assistance in the collection of data, I thank the National Science Foundation (SES 2CDZ414 and SES 0135422), John Meyer, and Francisco Ramirez. For support during the writing of the article, I thank Nuffield College at Oxford University, and most importantly, Lynn Eden and Stanford s Center for International Security and Cooperation.
We propose a comprehensive statistical model for analyzing multiparty, district-level elections. This
model, which provides a tool for comparative politics research analogous to that which regression
analysis provides in the American two-party context, can be used to explain or predict how
geographic distributions of electoral results depend upon economic conditions, neighborhood ethnic
compositions, campaign spending, and other features of the election campaign or aggregate areas. We also
provide new graphical representations for data exploration, model evaluation, and substantive interpretation.
We illustrate the use of this model by attempting to resolve a controversy over the size of and trend in the
electoral advantage of incumbency in Britain. Contrary to previous analyses, all based on measures now
known to be biased, we demonstrate that the advantage is small but meaningful, varies substantially across
the parties, and is not growing. Finally, we show how to estimate the party from which each party's advantage
is predominantly drawn.
The impact of foreign direct investment (FDI) on repression in developing nations is still disputed. Some argue that FDI improves economic development and exports human rights values. Others criticise the exploitation of cheap labour and resources, which may lead to tensions and government oppression. Previous studies have employed aggregate FDI data, with conflicting results. Alternatively, I propose that the effects depend on what kind of FDI enters a country. I build a sectoral framework to discuss how skills and technology levels, as well as the motivation for FDI, can mediate the impact. I then examine the link in a panel data analysis (1983-2010) in 121 countries, integrating sectoral FDI in several resource, manufacturing and service industries. The results show that investment in high-skilled and -tech sectors has positive effects. The results are robust across several measures for repression, and when accounting for sector size, regional and time effects.
This paper introduces the subject of private politics, presents a research agenda, and provides an example involving activists and a firm. Private politics addresses situations of conflict and their resolution without reliance on the law or government. It encompasses the political competition over entitlements in the status quo, the direct competition for support from the public, bargaining over the resolution of the conflict, and the maintenance of the agreed-to private ordering. The term private means that the parties do not rely on public order, i.e., lawmaking or the courts. The term politics refers to individual and collective action in situations in which people attempt to further their interests by imposing their will on others. Four models of private politics are discussed: (1) informational competition between an activist and a firm for support from the public, (2) decisions by citizen consumers regarding a boycott, (3) bargaining to resolve the boycott, and (4) the choice of an equilibrium private ordering to govern the ongoing conflicting interests of the activist and the firm.
Most studies of the political economy of money focus on the laws protecting central banks from government interference; this book turns to the overlooked people who actually make monetary policy decisions. Using formal theory and statistical evidence from dozens of central banks across the developed and developing worlds, this book shows that monetary policy agents are not all the same. Molded by specific professional and sectoral backgrounds and driven by career concerns, central bankers with different career trajectories choose predictably different monetary policies. These differences undermine the widespread belief that central bank independence is a neutral solution for macroeconomic management. Instead, through careful selection and retention of central bankers, partisan governments can and do influence monetary policy - preserving a political trade-off between inflation and real economic performance even in an age of legally independent central banks.
This article examines the impact of recent economic and political change on collective and individual labor rights in East Asia. Deploying a new index for measuring de jure and de facto labor rights, the article presents new comparative data on labor rights in the region. Democratization has produced stronger collective labor rights in much of the region, but labor laws in most countries still fall far short of international labor standards. East Asia's labor laws offer similar levels of protection for individual labor rights to the rest of the world when firing costs are taken into account, and low regional averages are primarily an effect of Singapore's extremely weak individual labor rights. Few countries have revised their labor laws in the direction of greater labor market flexibility. However, the distance between law and practice is wide, so improvements in laws are not necessarily reflected on the ground. Flexibility enters through the back door of ineffective labor law enforcement, which in turn has affected the organizing efforts of unions.
When teams of rival politicians compete for public support, they are essentially playing a zero sum game where one party's gains tend to come from the losses of one or more of their opponents. Despite this, most analyses of party support across time model the dynamics associated with a single party's support. In nations where only two parties are competing for votes, this approach is fine. But in nations with more than two parties, much of the substance of what is going on in party competition is lost. In this paper we illustrate the usefulness of a modeling strategy proposed by Philips et al. (2015) for estimating and interpreting the causal relationships that shape trade-offs in party support as they evolve over time. We extend their work by modeling public support for four parties instead of three and by developing the ability to model dynamic changes in party characteristics. We estimate our models on monthly data from the United Kingdom and Germany.
China’s special economic zones helped the country industrialize by attracting foreign investment. In 2006, Beijing initiated an overseas trade and cooperation zone program, assisting Chinese companies to invest abroad while also building China’s soft power through the transfer of a key component of China’s development success. Little is known about the 19 zones approved so far under this program, or the impact they are likely to have on structural transformation and industrial development in their host countries. This paper identifies the 19 zones and their proposed locations, the process of selection, developers, implementation, and the Chinese incentive regime. It then focuses on the African zones. Using a typology of factors that have proven critical for zone development in the past, the paper evaluates the potential of these zones for fostering structural transformation in Africa.
This paper investigates how social and environmental non-government organisations (NGOs) use the news media in an endeavour to create changes in the social performance and associated accountabilities of multinational buying companies’ (MBCs’) supply chains located in the developing country of Bangladesh. In this research, we explicitly seek the views of senior officers from global and local NGOs operating in Bangladesh, as well as the views of journalists from major global and local news media organisations. Our results show that social and environmental NGOs strategically use the news media in an effort to effect changes in corporate labour practices and related disclosure practices. More particularly, both the NGOs and the news media representatives stated that NGOs would be relatively powerless to create change in corporate without media coverage. This is the first known study to specifically address the joint and complementary role of NGOs and the news media in potentially creating changes in the social and environmental operating and disclosure practices of supply chains emanating from a developing country.
Drawing on a panel of 136 countries over the period 1982–2004, we study a tipping point version of Vogel's ‘California Effect’ in the context of the diffusion of human rights practices. Because human rights practices are often deeply embedded in a society's customs and political institutions, we expect that a high level of pressure from the importing countries is needed to bring about changes in an exporting country's human rights records. We find strong empirical support for this threshold effect; provided that the average level of respect for human rights in importing countries is sufficiently high, trading relationships can operate as transmission belts for the diffusion of human rights practices from importing to exporting countries.
To describe changes in the organizational structure of state health-related departments/agencies between 1990 and 2009; to identify factors associated with key organizational structures; and to investigate their relationship with different resource allocations across health policy areas, as represented by state budgets.
Original data collection on the organization of state health-related departments/agencies from 1990 to 2009. Analyses included descriptive statistics, logistic regression, and time-series regression modeling.
All 50 states.
Organizational structure of state government related to health in 4 areas (Medicaid, public health, mental health, human services); coupling of Medicaid and public health in the same agency; state budget changes in health policy areas, including Medicaid, public health, and hospitals.
The housing of 2 or more health-related functions in the same unit was common, with 21 states combining public health and Medicaid at 1 or more points in time. Eighteen states (36%) reorganized their health agencies/departments during the study period. Controlling for numerous economic, social, and political factors, when the state agency responsible for public health is consolidated with Medicaid, the share of the state budget allocated to Medicaid declined significantly, while public health allocations were unchanged. However, consolidating Medicaid with other services did not impact state Medicaid spending.
Government organizational structure related to health varies greatly across states and is somewhat dynamic. When Medicaid and public health functions are consolidated in the same stage agency, public health does not "lose" in terms of its share of the state budget. However, this could change as Medicaid costs continue to grow and with the implementation the Patient Protection and Affordable Care Act of 2010.
Because the American states operate under balanced budget requirements, increases in spending in one area typically entail equal and opposite bud- get cuts in other programs. Yet the literature analyzing the correlates of state spending by policy area has so far ignored these tradeos inherent to the budgeting process, and thus fails to address one of the most politically interesting and important dimensions of fiscal policy. Borrowing from the statistical literature on compositional data, we present more appropriate and ecient methods that explicitly incorporate the budget constraint into models of spending by budget category. We apply these methods to eight categories of spending from the 50 states over the years 1984-2005. Our findings show that partisan governments, political institutions, and eco- nomic conditions all influence who wins and who loses in the scramble for government spending in the states.
A series of iridium complexes, with triplet energy levels above or below the triplet level of host polymer, were used to study the flow of excitons between the host and the dopants. The performance of phosphorescent polymer light-emitting diodes has been shown to be sensitive to the triplet energy of the dopant. When the dopant exciton level was higher than that of the host polymer, a ``backward excitation energy transfer'' occurred; hence, the photoluminescence is quenched and the device performance is poor. When the triplet energy level of the dopant was lower than that of the host polymer, the exciton is confined to the dopant site, and the device shows better performance due to this confinement.
We examine some issues in the estimation of time-series cross-section models, calling into
question the conclusions of many published studies, particularly in the field of comparative
political economy. We show that the generalized least squares approach of Parks produces
standard errors that lead to extreme overconfidence, often underestimating variability by 50% or
more. We also provide an alternative estimator of the standard errors that is correct when the error
structures show complications found in this type of model. Monte Carlo analysis shows that these
"panel-corrected standard errors" perform well. The utility of our approach is demonstrated via a
reanalysis of one "social democratic corporatist" model.
This study examines the relationship between foreign economic capital and the level of government respect for two types of human rights in developing countries. Two opposing schools of thought offer explanations as to what this relationship might be like. According to the liberal neoclassical school, the acceptance of liberal economic doctrine will provide positive political benefits to developing countries. The “dependency” school, on the other hand, argues that because ties between core and periphery elites give governments in developing nations an incentive to repress, human rights conditions will worsen as foreign economic penetration increases. The results of previous empirical queries into this matter have been mixed. In contrast to most studies, we focus on a broader measure of foreign economic capital, including foreign direct investment, portfolio investment, debt, and official development assistance. Using ordered logit analysis on a cross-national sample of forty-three developing countries from 1981 to 1995, we discover systematic evidence of an association between foreign economic penetration and government respect for two types of human rights, physical integrity rights and political rights and civil liberties. Of particular interest is the finding that both foreign direct investment and portfolio investment are reliably associated with increased government respect for human rights.
Here we seek to build on our earlier research (Poe and Tate, 1994) by re-testing similar models on a data set covering a much longer time span; the period from 1976 to 1993. Several of our findings differ from those of our earlier work. Here we find statistical evidence that military regimes lead to somewhat greater human rights abuse, defined in terms of violations of personal integrity, once democracy and a host of other factors are controlled. Further, we find that countries that have experienced British colonial influence tend to have relatively fewer abuses of personal integrity rights than others. Finally, our results suggest that leftist countries are actually less repressive of these basic human rights than non-leftist countries. Consistent with the Poe and Tate (1994) study, however, we find that past levels of repression, democracy, population size, economic development, and international and civil wars exercise statistically significant and substantively important impacts on personal integrity abuse.
Competition to attract foreign direct investment (FDI) creates opportunities for multinational enterprises (MNEs) to diffuse corporate management practices from their countries-of-origin (home countries) to countries hosting their foreign operations. We examine conditions under which MNEs transfer corporate environmental practices from home countries to host countries. Our focus is on ISO 14001, the most widely adopted voluntary environmental program in the world. We examine inward FDI stocks and ISO 14001 adoption levels for a panel of 98 countries, and a subset of 74 developing countries, for the period 1996–2002. We find support for the country-of-origin argument in that inward FDI stocks are associated with higher levels of ISO 14001 adoption in host countries only when FDI originates from home countries that themselves have high levels of ISO 14001 adoption. Countries’ ISO adoption levels are associated not with how much FDI host countries receive overall but from whom they receive it. Three implications emerge from this study: (1) FDI can become an instrument to perpetuate divergence in corporate practices across the world; (2) economic integration via FDI can create incentives for firms to ratchet up their environmental practices beyond the legal requirements of their host countries; (3) instead of racing down to match the less stringent corporate practices prevalent in developing countries, developed countries can employ FDI outflows to ratchet up corporate practices abroad given that developing countries are net recipients of developed countries’ FDI outflows.
Protesters now routinely fill the streets when any large, formal meeting dealing with international economic issues takes place. They express concern about the potential social and environmental costs of globalization and want negotiators to address these issues in trade agreements and international organizations. In addition, the debate over whether and how to link labor standards to trade has led to an impasse in American trade policy for much of the past decade and has tied the hands of US trade negotiators. Proposals to "let the market do it" or "let the International Labor Organization (ILO) do it" abound, but it is less common to find any serious analysis of just how activists can galvanize consumers to demand that corporations raise labor standards in their global operations or how the ILO can become more effective.In this study, Elliott and Freeman move beyond the debate on the relative merits and risks of a social clause in trade agreements and focus on practical approaches for improving labor standards in a more integrated global economy. The authors examine both what is being done in these areas and what more needs to be done to ensure that steady and tangible progress toward universal respect for core labor standards is made. While concluding that the ILO should have primary responsibility for labor standards, the book also suggests that the WTO should consider how to address egregious and willful violations of core labor standards if they are trade related.
[From the introduction]. In this article, we will focus on two cases in which the EU attempts to advance its values internationally. First, the EU promotes the International Criminal Court (ICC) within the framework of its Common Foreign and Security Policy (CFSP), thereby emphasizing its commitment to human rights. Secondly, the EU aims to disseminate the norm of environmental protection by supporting the Kyoto Protocol. We will provide empirical evidence that in both cases, the EU made efforts to empower Sub-Saharan African countries on three levels. The identity level seems to be most crucial in that support for both international institutions on the part of African states increases their recognition in the eyes and in the rhetoric of European officials. Second, at the knowledge level, the EU supports Sub-Saharan African states by providing legal and technical expertise in order to enable them to participate in international negotiations and to implement international agreements. Finally, the EU provides material incentives (material level) within the framework of conditionality arrangements. However, whereas the first two levels are part of the EU’s official self-portrayal, it tends to keep quiet about the provision of material incentives, since they seem to contradict its rhetoric of EU-Africa relations as a partnership on an equal footing.
The reminder of this article is structured as follows: the next section is devoted to a critical discussion of the concept of normative power with a particular view to the modes of identity construction it involves. We will then move on to our case studies on the ICC (part 3) and on the Kyoto Protocol (part 4). In the fifth part, we will summarize our findings and discuss what insights the investigation of EU-Africa relations offers with respect to our understanding of the EU as a normative power.
Income growth in Africa that is high enough to achieve the internationally agreed development goals implies a rise in the region's per capita income by the early 2020s to about Latin America's current level. The paper shows that such income growth would be associated roughly with a nine-fold increase in Africa's manufactured exports, but also with a tripling of its primary exports, which in absolute terms would account for two-thirds of the increase in the region's total exports. Focusing on the demand potential for such an increase in Africa's primary exports, the paper argues that rising global demand from sustained rapid growth in natural-resource-poor Asian countries, particularly China, provides sizeable new opportunities for Africa's primary exports. In Africa, extractive industries are poised best to benefit directly from China's rising imports, while exporters of agricultural products are more likely to benefit indirectly from rising world market prices associated with Asia's growing primary imports.