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The Race To the Bottom, From the Bottom

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Author Info
Chau, Nancy H
Kanbur, Ravi

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Abstract

The dominant perspective in discussions of labour and environmental standards and globalization is that of North-South competition and its impact on Northern standards. This Paper presents an alternative perspective, that of South-South competition to export to the North, and its impact on Southern standards. It develops a simple model of Southern competition on standards, which can begin to provide insights into some key questions. A Southern race to the bottom is possible but not inevitable. It depends intricately on the Northern demand curve, the size of big exporters relative to each other, and the relative size of the competitive fringe of small exporters – a precise and complete characterization is developed in the Paper. The Paper also analyses the effect of Northern tariffs on Southern strategic competition in standards. It is shown that Northern trade protectionism undermines Southern standards.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2687.

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Date of creation: Feb 2001
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Handle: RePEc:cpr:ceprdp:2687

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Related research
Keywords: Labour And Environmental Standards; Logconcavity And Logconvexity; Race To The Bottom; Strategic Complementarity And Substitutability; Trade Restrictions;

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Find related papers by JEL classification:
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Brown, D.K. & Dearorff, A.V. & Stern, R.M., 1993. "International Labor Standards and Trade: A Theoretical Analysis," Working Papers 333, Research Seminar in International Economics, University of Michigan.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Laixun Zhao, 2006. "International Labor Standards and Southern Competition," Discussion Paper Series 193, Research Institute for Economics & Business Administration, Kobe University. [Downloadable!]
  2. Kimberly Ann Elliott, 2003. "Labor Standards and the Free Trade Area of the Americas," Peterson Institute Working Paper Series WP03-7, Peterson Institute for International Economics. [Downloadable!]
  3. Nirvikar Singh, 2004. "The Impact of International Labor Standards: A Survey of Economic Theory," International Trade 0412007, EconWPA. [Downloadable!]
  4. Mehdi M. Chowdhury, . "Migration, Remittances and Competition in International Labour Market," Discussion Papers 09/02, University of Nottingham, CREDIT. [Downloadable!]
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