Globalization , Regime Type and Labor Protest in Developing Countries

How can states best manage the social dislocations associated with rapid economic development and greater exposure to market forces? In this paper, we explore the relationship between foreign direct investment (FDI), regime type and strikes in low-and middle-income countries. We argue that FDI produces social tensions and a higher demand for labor that can result in higher levels of industrial conflict. However, the effect of FDI is moderated by regime type. While democracies tend to have higher levels of protest overall, they are better able to cope with the strains arising from FDI because conflict can be channeled through state institutions or union-party ties. More institutionalized authoritarian regimes or hybrid regimes also perform better than other kinds of authoritarian regimes. We test the argument using a new dataset of labor protest in lowand middle-income countries for the period 1980-2005.