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Institutional Challenges in the Development of the World’s First Worker-Owned Free Trade Zone

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  • Paul Susman
  • Geoffrey Schneider

Abstract

The theory of grounded comparative institutional advantage offers a framework for examining institutions that advantage and disadvantage specific types of economic activity in particular places. A case study of a Nicaraguan women’s sewing cooperative, the world’s first worker-owned free trade zone, reveals contradictory institutional biases both promoting and inhibiting exports. Formal institutions, e.g. regulations forcing the coop to form a noncooperative business to benefit from CAFTA, and informal institutions, such as an NGO assisting the women cope with CAFTA Tariff Preference Levels, gain credit, and control inventory, form the complex web that small actors must navigate to export their goods.

Suggested Citation

  • Paul Susman & Geoffrey Schneider, 2008. "Institutional Challenges in the Development of the World’s First Worker-Owned Free Trade Zone," Journal of Economic Issues, Taylor & Francis Journals, vol. 42(2), pages 489-498, June.
    • Handle: RePEc:mes:jeciss:v:42:y:2008:i:2:p:489-498
    DOI: 10.1080/00213624.2008.11507158
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    Cited by:

    1. Alexandre Lavissière & Jean-Paul Rodrigue, 2017. "Free ports: towards a network of trade gateways," Journal of Shipping and Trade, Springer, vol. 2(1), pages 1-17, December.
    2. Geoffrey Schneider & Paul Susman, 2010. "Uneven Development and Grounded Comparative Institutional Advantage: Lessons from Sweden and Mondragon," Forum for Social Economics, Springer;The Association for Social Economics, vol. 39(1), pages 1-11, April.

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