IDEAS home Printed from https://ideas.repec.org/p/hal/cesptp/halshs-03223795.html
   My bibliography  Save this paper

The Generalized System of Preferences and NGO Activism

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-03223795v2/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Baldwin, R E & Murray, Tracy, 1977. "MFN Tariff Reductions and Developing Country Trade Benefits under the GSP," Economic Journal, Royal Economic Society, vol. 87(345), pages 30-46, March.
    2. James Albrecht & Susan Vroman, 2002. "A Matching Model with Endogenous Skill Requirements," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(1), pages 283-305, February.
    3. Michele Ford, 2006. "Labour NGOs: An Alternative Form of Labour Organizing in Indonesia, 1991--1998," Asia Pacific Business Review, Taylor & Francis Journals, vol. 12(2), pages 175-191, April.
    4. Paul Brenton & Miriam Manchin, 2014. "Making EU Trade Agreements Work: The Role of Rules of Origin," World Scientific Book Chapters, in: INTERNATIONAL TRADE, DISTRIBUTION AND DEVELOPMENT Empirical Studies of Trade Policies, chapter 14, pages 299-313, World Scientific Publishing Co. Pte. Ltd..
    5. Timothy Besley & Maitreesh Ghatak, 2005. "Competition and Incentives with Motivated Agents," American Economic Review, American Economic Association, vol. 95(3), pages 616-636, June.
    6. Martín Rama, 2001. "The Consequences of Doubling the Minimum Wage: The Case of Indonesia," ILR Review, Cornell University, ILR School, vol. 54(4), pages 864-881, July.
    7. Ann Harrison & Jason Scorse, 2022. "Multinationals and Anti-Sweatshop Activism," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 13, pages 291-317, World Scientific Publishing Co. Pte. Ltd..
    8. Armin Falk & Ernst Fehr & Christian Zehnder, "undated". "The Behavioral Effects of Minimum Wages," IEW - Working Papers 247, Institute for Empirical Research in Economics - University of Zurich.
    9. Armin Falk & Ernst Fehr & Christian Zehnder, 2006. "Fairness Perceptions and Reservation Wages—the Behavioral Effects of Minimum Wage Laws," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(4), pages 1347-1381.
    10. Melissa Dell & Benjamin A Olken, 2020. "The Development Effects of the Extractive Colonial Economy: The Dutch Cultivation System in Java," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(1), pages 164-203.
    11. Henderson, J Vernon & Kuncoro, Ari, 1996. "Industrial Centralization in Indonesia," The World Bank Economic Review, World Bank, vol. 10(3), pages 513-540, September.
    12. Deichmann, Uwe & Kaiser, Kai & Lall, Somik V & Shalizi, Zmarak, 2005. "Agglomeration, transport, and regional development in Indonesia," Policy Research Working Paper Series 3477, The World Bank.
    13. Gil-Pareja, Salvador & Llorca-Vivero, Rafael & Martínez-Serrano, José Antonio, 2014. "Do nonreciprocal preferential trade agreements increase beneficiaries' exports?," Journal of Development Economics, Elsevier, vol. 107(C), pages 291-304.
    14. Elisa Gamberoni, 2007. "Do unilateral trade preferences help export diversification? An investigation of the impact of European unilateral trade preferences on the extensive and intensive margin of trade," IHEID Working Papers 17-2007, Economics Section, The Graduate Institute of International Studies.
    15. Ham, Andrés, 2018. "The Consequences of Legal Minimum Wages in Honduras," World Development, Elsevier, vol. 102(C), pages 135-157.
    16. Karolina GORAUS‐TAŃSKA & Piotr LEWANDOWSKI, 2019. "Minimum wage violation in central and eastern Europe," International Labour Review, International Labour Organization, vol. 158(2), pages 297-336, June.
    17. Wang, Xianghong, 2012. "When workers do not know – The behavioral effects of minimum wage laws revisited," Journal of Economic Psychology, Elsevier, vol. 33(5), pages 951-962.
    18. Teal, Francis, 2000. "Real wages and the demand for skilled and unskilled male labour in Ghana's manufacturing sector: 1991-1995," Journal of Development Economics, Elsevier, vol. 61(2), pages 447-461, April.
    19. Ozden, Caglar & Reinhardt, Eric, 2005. "The perversity of preferences: GSP and developing country trade policies, 1976-2000," Journal of Development Economics, Elsevier, vol. 78(1), pages 1-21, October.
    20. Acemoglu, Daron & Pischke, Jorn-Steffen, 1999. "Beyond Becker: Training in Imperfect Labour Markets," Economic Journal, Royal Economic Society, vol. 109(453), pages 112-142, February.
    21. Haroon Bhorat & Ravi Kanbur & Benjamin Stanwix, 2015. "Partial minimum wage compliance," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-20, December.
    22. Dolado, Juan J. & Felgueroso, Florentino & Jimeno, Juan F., 2000. "Youth labour markets in Spain: Education, training, and crowding-out," European Economic Review, Elsevier, vol. 44(4-6), pages 943-956, May.
    23. Mansoor, Kashif & O'Neill, Donal, 2021. "Minimum wage compliance and household welfare: An analysis of over 1500 minimum wages in India," World Development, Elsevier, vol. 147(C).
    24. Harrison, Ann & Scorse, Jason, 2003. "Globalization's impact on compliance with labor standards," MPRA Paper 36450, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Koenig, Pamina & Krautheim, Sebastian & Löhnert, Claudius & Verdier, Thierry, 2021. "Local global watchdogs: Trade, sourcing and the internationalization of social activism," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-86-21, University of Passau, Faculty of Business and Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. World Bank, 2013. "Minimum Wage Policy : Lessons with a Focus on the ASEAN Region," World Bank Publications - Reports 16687, The World Bank Group.
    2. Haroon Bhorat & Ravi Kanbur & Benjamin Stanwix, 2017. "Minimum Wages in Sub-Saharan Africa: A Primer," The World Bank Research Observer, World Bank, vol. 32(1), pages 21-74.
    3. Haroon Bhorat & Tara Caetano & Benjamin Jourdan & Ravi Kanbur & Christopher Rooney & Benjamin Stanwix & Ingrid Woolard, 2016. "Investigating the Feasibility of a National Minimum Wage for South Africa," Working Papers 201601, University of Cape Town, Development Policy Research Unit.
    4. Vanessa, Mertins & Jeworrek, Sabrina & Vlassopoulos, Michael, 2018. ""The Good News about Bad News": Feedback about Past Organisational Failure Bad ist Impact in Worker Productivity," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181644, Verein für Socialpolitik / German Economic Association.
    5. Drusilla K Brown & Alan V Deardorff & Robert M Stern, 2013. "Labor Standards and Human Rights: Implications for International Trade and Investment," World Scientific Book Chapters, in: Zdenek Drabek & Petros Mavroidis (ed.), Regulation of Foreign Investment Challenges to International Harmonization, chapter 5, pages 153-195, World Scientific Publishing Co. Pte. Ltd..
    6. Zahra Murad & Robert Dowell, 2020. "Foreign visa salary requirement and natives’ reservation wages," Working Papers in Economics & Finance 2020-06, University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group.
    7. Prasanna Tambe & Xuan Ye & Peter Cappelli, 2019. "Paying to Program? Engineering Brand and High-Tech Wages," NBER Working Papers 25552, National Bureau of Economic Research, Inc.
    8. Jeworrek, Sabrina & Mertins, Vanessa & Vlassopoulos, Michael, 2018. ""The good news about bad news": Feedback about past organisational failure and its impact on worker productivity," IWH Discussion Papers 1/2018, Halle Institute for Economic Research (IWH).
    9. Rebitzer, James B. & Taylor, Lowell J., 2011. "Extrinsic Rewards and Intrinsic Motives: Standard and Behavioral Approaches to Agency and Labor Markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 8, pages 701-772, Elsevier.
    10. Mr. Christopher S Adam & Mr. Edward F Buffie, 2020. "The Minimum Wage Puzzle in Less Developed Countries: Reconciling Theory and Evidence," IMF Working Papers 2020/023, International Monetary Fund.
    11. Koch, Andreas & Kirchmann, Andrea & Reiner, Marcel & Scheu, Tobias & Zühlke, Anne & Bonin, Holger, 2020. "Verhaltensmuster von Betrieben und Beschäftigten im Kontext des gesetzlichen Mindestlohns," IZA Research Reports 97, Institute of Labor Economics (IZA).
    12. Gnangnon, Sèna Kimm, 2022. "Effect of the utilization of non-reciprocal trade preferences offered by the QUAD countries on beneficiary countries' economic complexity," Journal of the Japanese and International Economies, Elsevier, vol. 65(C).
    13. Prasanna Tambe & Xuan Ye & Peter Cappelli, 2020. "Paying to Program? Engineering Brand and High-Tech Wages," Management Science, INFORMS, vol. 66(7), pages 3010-3028, July.
    14. Koenig, Felix & Manning, Alan & Petrongolo, Barbara, 2014. "Reservation wages and the wage flexibility puzzle," LSE Research Online Documents on Economics 60613, London School of Economics and Political Science, LSE Library.
    15. Salvador Gil-Pareja & Rafael Llorca-Vivero & José Antonio Martínez-Serrano, 2018. "Reciprocal vs nonreciprocal trade agreements: which have been best to promote exports?," Working Papers 1802, Department of Applied Economics II, Universidad de Valencia.
    16. Léné, Alexandre, 2011. "Occupational downgrading and bumping down: The combined effects of education and experience," Labour Economics, Elsevier, vol. 18(2), pages 257-269, April.
    17. Kesternich, Iris & Schumacher, Heiner & Siflinger, Bettina & Valder, Franziska, 2022. "Reservation wages and labor supply," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 583-607.
    18. Riedel, Nadine & Schildberg-Hörisch, Hannah, 2013. "Asymmetric obligations," Journal of Economic Psychology, Elsevier, vol. 35(C), pages 67-80.
    19. Emanuel Ornelas, 2016. "Special and Differential Treatment for Developing Countries," CESifo Working Paper Series 5823, CESifo.
    20. Hernán Bejarano & Brice Corgnet & Joaquín Gómez-Miñambres, 2019. "Labor Contracts, Gift-Exchange and Reference Wages: Your Gift Need Not Be Mine!," Working Papers 19-26, Chapman University, Economic Science Institute.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:cesptp:halshs-03223795. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.