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The Generalized System of Preferences and NGO Activism

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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

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  • Lionel Fontagné & Michela Limardi, 2021. "The Generalized System of Preferences and NGO Activism," Documents de travail du Centre d'Economie de la Sorbonne 21014r, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne, revised Jun 2021.
    • Handle: RePEc:mse:cesdoc:21014r
    DOI: 10.1016/j.jdeveco.2023.103207
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    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.

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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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