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The Generalized System of Preferences and NGO Activism

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  • Lionel Fontagné

    (UP1 - Université Paris 1 Panthéon-Sorbonne, Centre de recherche de la Banque de France - Banque de France, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Michela Limardi

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, RIME-Lab - Recherche Interdisciplinaire en Management et Économie Lab - ULR 7396 - UA - Université d'Artois - Université de Lille)

Abstract

Can preferential market access help to enforce Labor Laws in beneficiary countries? The US Generalized System of Preferences (GSP) is accorded conditional on compliance with labor rights and leaves room for petitioning and revising the scheme upon request by interest groups. Using data from Indonesian Manufacturing firms, we show that GSP renegotiation combined with the activism of workers' rights groups helped increase firm-level average wages up to the minimum-wage level, not only inside but also outside the export sector. GSP leverage allowed labor NGOs to act more effectively by putting the violation of national Labor Laws under the international spotlight.

Suggested Citation

  • Lionel Fontagné & Michela Limardi, 2021. "The Generalized System of Preferences and NGO Activism," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-03223795, HAL.
    • Handle: RePEc:hal:cesptp:halshs-03223795
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03223795v2
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    1. Pamina Koenig & Sebastian Krautheim & Claudius Löhnert & Thierry Verdier & Thierry Verdier, 2021. "Local Global Watchdogs: Trade, Sourcing and the Internationalization of Social Activism," CESifo Working Paper Series 9068, CESifo.

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    More about this item

    Keywords

    GSP; labor standards; NGOs; wage determination;
    All these keywords.

    JEL classification:

    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J80 - Labor and Demographic Economics - - Labor Standards - - - General

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