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Social Dumping in the Transformation Process?


  • Hans-Werner Sinn


Business representatives and union leaders in highly industrialised countries often accuse the governments of less-developed countries of practising social dumping in the sense of deliberately neglecting work-place safety legislation, co-determination rights and other fringe benefits which define the quality of workplaces. This paper refutes this view by modelling the transition path of a less-developed small open economy that faces transactions costs when trading capital and labour with the rest of the world. It shows that competitive markets and competitive governments choose Pareto efficient transition strategies which are characterised by a sluggish development of market wages and government-imposed social standards.

Suggested Citation

  • Hans-Werner Sinn, 2001. "Social Dumping in the Transformation Process?," NBER Working Papers 8364, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:8364
    Note: ITI PE

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    References listed on IDEAS

    1. Hans-Werner Sinn, 2000. "EU Enlargement, Migration, and Lessons from German Unification," German Economic Review, Verein für Socialpolitik, vol. 1(3), pages 299-314, August.
    2. Sinn, Gerlinde & Sinn, Hans-Werner, 1992. "Kaltstart. Volkswirtschaftliche Aspekte der Deutschen Vereinigung," Monograph, Mohr Siebeck, Tübingen, edition 2, number urn:isbn:9783161459429.
    3. Hans-Werner Sinn & Gebhard Flaig & Martin Werding & Sonja Munz & Nicola Düll & Herbert Hofmann, 2001. "EU-Erweiterung und Arbeitskräftemigration : Wege zu einer schrittweisen Annäherung der Arbeitsmärkte," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 2, April.
    4. Feldmann, Horst, 1999. "Zehn Jahre EU-Sozialcharta," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW – German National Library of Economics / Leibniz Information Centre for Economics, vol. 79(11), pages 670-676.
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    Cited by:

    1. Achim Kemmerling & Tiiu Paas & Raul Eamets, 2002. "Regional Input on Eastward Enlargement of the Eurozone: Labour Markets," Eastward Enlargement of the Euro-zone Working Papers wp06a, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Sep 2002.
    2. Torben Andersen, 2001. "European Integration - A Downward Bias in Employment Policies?," CESifo Working Paper Series 574, CESifo Group Munich.
    3. Justina A.V. Fischer & Frank Somogyi, 2009. "Globalization and Protection of Employment," KOF Working papers 09-238, KOF Swiss Economic Institute, ETH Zurich.
    4. Fischer, Justina A.V., 2012. "The choice of domestic policies in a globalized economy," Papers 306, World Trade Institute.
    5. Achim Kemmerling, 2003. "Regional Input on the Social Dimension of Ezoneplus: Belgium, The Netherlands, France, Austria, and Germany," Eastward Enlargement of the Euro-zone Working Papers wp13c, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Mar 2003.
    6. Michael Bolle & José Caétano & Jaakko Kiander & Vladimir Lavrac & Renzo Orsi & Tiiu Paas & Katarzyna Zukrowska, 2002. "The Eastward Enlargement of the Eurozone - State of the Art Report," Eastward Enlargement of the Euro-zone Working Papers wp02, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Jan 2002.
    7. Berthold, Norbert & Neumann, Michael, 2006. "Europas Sozialstaaten im Schatten der Globalisierung," Discussion Paper Series 88, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    8. Fischer, Justina A.V., 2013. "Der Euro – ein Projekt ohne Zukunft? Ein Plädoyer für europäische Solidarität und Toleranz
      [The Euro - a Project without Future? Calling for European Solidarity and Tolerance]
      ," MPRA Paper 46944, University Library of Munich, Germany.
    9. Hans-Werner Sinn & Wolfgang Ochel, 2003. "Social Union, Convergence and Migration," Journal of Common Market Studies, Wiley Blackwell, vol. 41(5), pages 869-896, December.
    10. Fischer, Justina A.V., 2012. "The choice of domestic policies in a globalized economy: Extended Version," MPRA Paper 37816, University Library of Munich, Germany.
    11. Hanns-Dieter Jacobsen et. al, 2004. "Economic, Political, Institutional as well as Social Risks and Opportunities of EMU Enlargement," Eastward Enlargement of the Euro-zone Working Papers wp22, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Jun 2004.

    More about this item

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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