International Labor Standards: From Theory to Policy

This paper reexamines the theoretical literature on international labor standards, providing an overview of its main analytical arguments. Among the situations in which a case for labor standards may arise are imperfections in labor markets, market power effects in international trade, and concerns that consumers may have about the working conditions or rights that workers enjoy. The paper emphasizes the importance of making clear the value judgments being used, and discusses the different institutional issues that may arise in considering the implementation of labor standards. While there are contexts in which promoting labor standards through some form of collective action is beneficial, such policies may best be incorporated into a broader perspective on well-being, especially in the case of the poor in developing countries. Finally, the theoretical survey suggests that tying international labor standards to trade through the WTO may not be the best institutional approach – weaker policy implementation through the ILO may be more acceptable to a broad range of countries, while new institutional structures for developing country consensus may ultimately be what is needed. * This paper summarizes and extends ideas developed as part of a project on international labor standards, initiated and funded by the Swedish Ministry of Foreign Affairs and the Expert Group on Development Issues, Sweden. That work is reported in Singh (2002). I am grateful to Kaushik Basu, Tore Ellingsen, Henrik Horn, Lisa Román, and T.N. Srinivasan for helpful comments and discussions. However, I am solely responsible for all errors and omissions, and the views expressed here are not those of any of the individuals or organizations mentioned.