IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/2687.html
   My bibliography  Save this paper

The Race To the Bottom, From the Bottom

Author

Listed:
  • Kanbur, Ravi
  • Chau, Nancy H

Abstract

The dominant perspective in discussions of labour and environmental standards and globalization is that of North-South competition and its impact on Northern standards. This Paper presents an alternative perspective, that of South-South competition to export to the North, and its impact on Southern standards. It develops a simple model of Southern competition on standards, which can begin to provide insights into some key questions. A Southern race to the bottom is possible but not inevitable. It depends intricately on the Northern demand curve, the size of big exporters relative to each other, and the relative size of the competitive fringe of small exporters ? a precise and complete characterization is developed in the Paper. The Paper also analyses the effect of Northern tariffs on Southern strategic competition in standards. It is shown that Northern trade protectionism undermines Southern standards.

Suggested Citation

  • Kanbur, Ravi & Chau, Nancy H, 2001. "The Race To the Bottom, From the Bottom," CEPR Discussion Papers 2687, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:2687
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP2687
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Drusilla K. Brown, 2000. "International Trade and Core Labor Standards: A Survey of the Recent Literature," Discussion Papers Series, Department of Economics, Tufts University 0005, Department of Economics, Tufts University.
    2. Basu, Arnab K. & Chau, Nancy H., 2001. "Market Access Rivalry and Eco-labeling Standards: Are Eco-labels Non-tariff Barriers in Disguise?," Working Papers 127662, Cornell University, Department of Applied Economics and Management.
    3. Alan B. Krueger, 1996. "Observations on International Labor Standards and Trade," NBER Working Papers 5632, National Bureau of Economic Research, Inc.
    4. Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June.
    5. repec:bla:worlde:v:23:y:2000:i:04:p:561-576 is not listed on IDEAS
    6. Kyle Bagwell & Robert W. Staiger, 1998. "The Simple Economics of Labor Standards and the GATT," NBER Working Papers 6604, National Bureau of Economic Research, Inc.
    7. Jai S. Mah, 1997. "Core Labour Standards and Export Performance in Developing Countries," The World Economy, Wiley Blackwell, vol. 20(6), pages 773-785, September.
    8. Alan Krueger, 1996. "Observations on International Labor Standards and Trade," Working Papers 741, Princeton University, Department of Economics, Industrial Relations Section..
    9. Kaushik Basu, 1999. "International Labor Standards and Child Labor," Challenge, Taylor & Francis Journals, vol. 42(5), pages 80-93, September.
    10. Jim Rollo & L. Alan Winters, 2000. "Subsidiarity and Governance Challenges for the WTO: Environmental and Labour Standards," The World Economy, Wiley Blackwell, vol. 23(4), pages 561-576, April.
    11. Goldin,Ian & Winters,L. Alan (ed.), 1995. "The Economics of Sustainable Development," Cambridge Books, Cambridge University Press, number 9780521469579, January.
    12. Stern, R.M., 2000. "Labor Standards and Trade," Working Papers 457, Research Seminar in International Economics, University of Michigan.
    13. Brown, D.K. & Dearorff, A.V. & Stern, R.M., 1993. "International Labor Standards and Trade: A Theoretical Analysis," Working Papers 333, Research Seminar in International Economics, University of Michigan.
    14. Maskus, Keith E., 1997. "Should core labor standards be imposed through international trade policy?," Policy Research Working Paper Series 1817, The World Bank.
    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. Bandyopadhyay, Subhayu & Basu, Arnab K. & Chau, Nancy H. & Mitra, Devashish, 2021. "The Pro-Trade Bias of Offshoring," Working Papers 313773, Cornell University, Department of Applied Economics and Management.
    2. Laixun Zhao, 2006. "International Labor Standards and Southern Competition," Discussion Paper Series 193, Research Institute for Economics & Business Administration, Kobe University.
    3. repec:ilo:ilowps:371237 is not listed on IDEAS
    4. Anindya Bhattacharya & Debapriya Sen, 2021. "Labor policy and multinational firms: The “race to the bottom” revisited," Review of Development Economics, Wiley Blackwell, vol. 25(3), pages 1515-1537, August.
    5. Basu, Arnab K. & Chau, Nancy H. & Grote, Ulrike, 2004. "On export rivalry and the greening of agriculture--the role of eco-labels," Agricultural Economics, Blackwell, vol. 31(2-3), pages 135-147, December.
    6. Bernhard G. GUNTER & Rolph HOEVEN, 2004. "The social dimension of globalization: A review of the literature," International Labour Review, International Labour Organization, vol. 143(1-2), pages 7-43, March.
    7. Zhiqi Chen & Afshan Dar‐Brodeur, 2020. "Trade and labour standards: Will there be a race to the bottom?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(3), pages 916-948, August.
    8. Laixun Zhao, 2009. "International Labour Standards and North–South Competition," The World Economy, Wiley Blackwell, vol. 32(7), pages 1091-1114, July.
    9. Sara Kahn-Nisser, 2017. "Channels of Influence: The EU and Delta Convergence of Core Labour Standards in the Eastern Neighbourhood," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 29(1), pages 127-143, January.
    10. Yanan Li & Ravi Kanbur & Carl Lin, 2019. "Minimum Wage Competition between Local Governments in China," Journal of Development Studies, Taylor & Francis Journals, vol. 55(12), pages 2479-2494, December.
    11. Hur, Jung & Zhao, Laixun, 2009. "Labor standards, labor-management bargaining and international rivalry," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 259-272, August.
    12. Bandyopadhyay, Subhayu & Basu, Arnab K. & Chau, Nancy H. & Mitra, Devashish, 2022. "On Trade Policy Preference and Offshoring Ties," IZA Discussion Papers 15782, Institute of Labor Economics (IZA).
    13. Donado, Alejandro. & Wälde, Klaus., 2012. "Globalization, trade unions and labour standards in the North," ILO Working Papers 994694483402676, International Labour Organization.
    14. Chau, Nancy H., 2016. "On sweatshop jobs and decent work," Journal of Development Economics, Elsevier, vol. 121(C), pages 120-134.
    15. Subhayu Bandyopadhyay & Arnab K. Basu & Nancy H. Chau & Devashish Mitra, 2022. "On Terms of Trade, Offshoring Ties, and the Enforcement of Trade Agreements," Working Papers 2022-039, Federal Reserve Bank of St. Louis, revised Apr 2023.
    16. Donado, Alejandro & Wälde, Klaus, 2010. "How bad is globalization for labour standards in the north?," W.E.P. - Würzburg Economic Papers 84, University of Würzburg, Department of Economics.
    17. Dimova, Ralitza, 2021. "The Political Economy of Child Labor," GLO Discussion Paper Series 816, Global Labor Organization (GLO).
    18. repec:ilo:ilowps:469448 is not listed on IDEAS
    19. Kimberly Ann Elliott, 2003. "Labor Standards and the Free Trade Area of the Americas," Working Paper Series WP03-7, Peterson Institute for International Economics.
    20. Kanbur, Ravi, 2014. "Globalization and Inequality," Working Papers 180163, Cornell University, Department of Applied Economics and Management.
    21. Seliger Bernhard, 2001. "Die Krise der sozialen Sicherung und die Globalisierung – Politische Mythen und ordnungspolitische Wirklichkeit," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 52(1), pages 215-238, January.
    22. Nirvikar Singh, 2004. "The Impact of International Labor Standards: A Survey of Economic Theory," International Trade 0412007, University Library of Munich, Germany.
    23. Mehdi M. Chowdhury, 2009. "Migration, Remittances and Competition in International Labour Market," Discussion Papers 09/02, University of Nottingham, CREDIT.

    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. Drusilla K. Brown, 2001. "Labor Standards: Where Do They Belong on the International Trade Agenda?," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 89-112, Summer.
    2. Rémi Bazillier, 2004. "Core labour standards and economic growth," Cahiers de la Maison des Sciences Economiques bla04088, Université Panthéon-Sorbonne (Paris 1).
    3. Michiel Kok & Richard Nahuis & Albert de Vaal, 2004. "On labour standards and free trade," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 13(2), pages 137-158.
    4. Matthias Doepke & Fabrizio Zilibotti, 2010. "Do international labor standards contribute to the persistence of the child-labor problem?," Journal of Economic Growth, Springer, vol. 15(1), pages 1-31, March.
    5. Pierre, Gaëlle & Scarpetta, Stefano, 2004. "Employment Regulations through the Eyes of Employers: Do They Matter and How Do Firms Respond to Them?," IZA Discussion Papers 1424, Institute of Labor Economics (IZA).
    6. Martin Rama, 2002. "Globalization and Workers in Developing Countries," Economics Study Area Working Papers 41, East-West Center, Economics Study Area.
    7. Pierre, Gaelle & Scarpetta, Stefano, 2007. "How labor market policies can combine workers'protection with job creation : a partial review of some key issues and policy options," Social Protection Discussion Papers and Notes 41439, The World Bank.
    8. Wu, Chia-Hsuan & Lin, Kuo-Jung & Chang, Ching-Cheng & Hsu, Shih-Hsun, 2003. "The Economic Analysis of GM Crops Impacts on Taiwan's Agriculture," Conference papers 331135, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Edmonds, Eric V. & Pavcnik, Nina, 2005. "The effect of trade liberalization on child labor," Journal of International Economics, Elsevier, vol. 65(2), pages 401-419, March.
    10. Drusilla K. Brown & Alan V. Deardorff & Robert M. Stern, 2009. "U.S. Trade and Other Policy Options and Programs to Deter Foreign Exploitation of Child Labor," World Scientific Book Chapters, in: Globalization And International Trade Policies, chapter 18, pages 689-743, World Scientific Publishing Co. Pte. Ltd..
    11. Eric Edmonds & Nina Pavcnik, 2002. "Does Globalization Increase Child Labor? Evidence from Vietnam," NBER Working Papers 8760, National Bureau of Economic Research, Inc.
    12. Nirvikar Singh, 2004. "The Impact of International Labor Standards: A Survey of Economic Theory," International Trade 0412007, University Library of Munich, Germany.
    13. Julika Herzberg & Oliver Lorz, 2020. "Sourcing from conflict regions: Policies to improve transparency in international supply chains," Review of International Economics, Wiley Blackwell, vol. 28(2), pages 395-407, May.
    14. Hans-Böckler-Stiftung & Deutscher Gewerkschaftsbund (ed.), 2001. "Welthandelsorganisation und Sozialstandards: Dokumentation der DGB-Tagung am 28. Mai 2001 in Brüssel," Study / edition der Hans-Böckler-Stiftung, Hans-Böckler-Stiftung, Düsseldorf, volume 60, number 60, March.
    15. Dehejia, Rajeev H. & Gatti, Roberta, 2002. "Child labor : the role of income variability and access to credit in a cross-section of countries," Policy Research Working Paper Series 2767, The World Bank.
    16. Thierry Baudassé & Rémi Bazillier, 2010. "Migration and Trade Union Rights," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 146(IV), pages 677-707, December.
    17. repec:dau:papers:123456789/3202 is not listed on IDEAS
    18. Fischer, Justina AV & Somogyi, Frank, 2009. "Globalization and Protection of Employment," MPRA Paper 17535, University Library of Munich, Germany.
    19. Michiel Kok & Richard Nahuis & Albert de Vaal, 2004. "On labour standards and free trade," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 13(2), pages 137-158.
    20. Chau, Nancy H. & Kanbur, Ravi, 2001. "The Adoption of International Labor Standards Conventions: Who, What, and Why?," Working Papers 127654, Cornell University, Department of Applied Economics and Management.
    21. Dehejia, Rajeev H. & Beegle, Kathleen & Gatti, Roberta, 2003. "Child labor, income shocks, and access to credit," Policy Research Working Paper Series 3075, The World Bank.

    More about this item

    Keywords

    Labour and environmental standards; Strategic complementarity and substitutability; Logconcavity and logconvexity; Race to the bottom; Trade restrictions;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

    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:cpr:ceprdp:2687. 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: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    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.