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

  • Thomas I. Palley

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

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

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File URL: http://hdl.handle.net/10.1002/jid.1140
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Article provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.

Volume (Year): 17 (2005)
Issue (Month): 7 ()
Pages: 883-898

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Handle: RePEc:wly:jintdv:v:17:y:2005:i:7:p:883-898
Contact details of provider: Web page: http://www3.interscience.wiley.com/journal/5102/home

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  1. Vito Tanzi, 1998. "Corruption Around the World; Causes, Consequences, Scope, and Cures," IMF Working Papers 98/63, International Monetary Fund.
  2. Rodrik, Dani, 1998. "Democracies Pay Higher Wages," CEPR Discussion Papers 1776, C.E.P.R. Discussion Papers.
  3. Sanjeev Gupta, 1998. "Does Corruption Affect Income Inequality and Poverty?," IMF Working Papers 98/76, International Monetary Fund.
  4. Thomas I. Palley, 2004. "The economic case for international labour standards," Cambridge Journal of Economics, Oxford University Press, vol. 28(1), pages 21-36, January.
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