Global Apparel Production and Sweatshop Labor: Can Raising Retail Prices Finance Living Wages?

This paper provides some empirical evidence on issues raised by the global antisweatshop movement. We first consider the relationship between wage and employment growth, finding no consistent trade-off between them. We then measure the share of labor costs in the production of garments in the United States and Mexico. We find that the retail price increases necessary to absorb the costs of substantially raising wages are small, well within the range of price increases that polls suggest U.S. consumers are willing to pay. We close by considering some implications of these results.Global sweatshop labor; empirical analysis

While Doha Sleeps: Securing Economic Growth through Trade Facilitation

Improving the international trading system does not require new, comprehensive multilateral agreements. Countries can derive large gains from the trading system by engaging in reforms often referred to as trade facilitation. In broad terms, trade facilitation includes reforms aimed at improving the chain of administrative and physical procedures involved in the transport of goods and services across international borders. Countries with inadequate trade infrastructure, burdensome administrative processes, or limited competition in trade logistics services are less capable of benefiting from the opportunities of expanding global trade. Companies interested in investing, buying, or selling in local markets are less likely to bother if there are too many frictions related to document processing or cargo inspection at customs, antiquated port facilities, logistics bottlenecks, or limited reliability of freight or trade-financing services. According to recent studies from the World Bank and other international economic institutions, trade facilitation reforms could do more to increase global trade flows than further reductions in tariff rates. For many developing countries -- particularly those that receive preferential tariff treatment from rich countries -- reducing transportation and logistics-related costs through trade facilitation reforms would be much more beneficial than further tariff cuts. But trade facilitation does not only offer promise to developing countries. All countries can benefit by removing sources of friction in their supply chains. The post-9/11 focus on minimizing the risk of terrorists exploiting porous international supply chains to sneak weapons of mass destruction into U.S. cities -- obviously a vital objective -- could hamper the capacity of Americanbased companies to attract investment and compete for markets. Likewise, U.S. prohibitions against foreign competition in transportation services and the political antipathy toward foreign investment in U.S. port operations raise the costs of doing business and increase the scope for trade facilitation in the United States

Exploring Linkages Among Agriculture, Trade, and the Environment: Issues for the Next Century

Many trade and environment issues will confront agriculture over the next several years. This report provides an economic framework to better understand these issues and discusses prior empirical inquiries and findings. Four primary issues are addressed: (1) how will environmental policies affect agricultural trade?; (2) how will agricultural trade liberalization affect environmental quality?; (3) to what extent should there be international harmonization of environmental policies and product standards?; and (4) is there economic justification for using trade measures to protect the environment? This report demonstrates that basic economic paradigms can provide a basis for understanding how trade and the environment interact. The few empirical studies based on these concepts have found many of the linkages between trade and the environment to be weak or the effects small. Trade and environment issues remain important to monitor, however, because economic and environmental relationships and domestic and international policies are continually evolving, and decision-makers need good information to confirm or disprove the numerous hypotheses that have surfaced in international discussions.environmental policy, agricultural policy, trade policy, trade, environment, harmonization, Agricultural and Food Policy, Environmental Economics and Policy, International Relations/Trade,

Local economic development in Mexico: the contribution of the bottom-up approach

This thesis examines the contribution of the bottom-up approach towards local economic development (LED) in Mexico. It applies a combination of methodologies to assess if the growing importance of this approach in the public policy arena is supported by a more focused and systematic analysis. In doing so, the aim is to offer a broader and deeper understanding of the key elements of the bottom-up perspective and their specific impact on the economic and social development of places, by considering a large sample of Mexican municipalities; and to better comprehend the effects of local actions and interactions on the shape and effectiveness of those key elements by focusing on two municipalities, which have adopted different strategies. The first part of the empirical analysis uses a quantitative methodology and presents – to the best of our knowledge – the first nationwide quantitative assessment of the impact of the constituents of the bottom-up approach on the development fortunes of local jurisdictions. The analysis relies on a purpose-built database of 898 municipalities in Mexico and on heteroscedasticity-consistent ordinary least square (OLS) regression methods to evaluate whether the implementation of six different components of the bottom-up development strategies – development plan, sustainability, entrepreneurship, capacity building, participation mechanisms, and development links – has delivered greater human development across Mexican municipalities. The results of the analysis indicate that municipalities engaging in LED have witnessed improvements in human development, relative to those which have overlooked it. The increase in human development has been greatest for those local authorities which have pursued capacity building, the establishment of development links and which have drafted a development plan based on a local diagnosis. The second part of the analysis uses a case-study methodology to dig deeper on two Mexican municipalities – Apizaco and Chiautempan – located in Tlaxcala, one of the Mexican states which has set up an institutional framework aimed at encouraging greater participation. Our findings reveal that while the implementation of certain aspects of the bottom-up approach have had a clear relevant positive contribution to economic and social development, a series of local challenges have clearly shaped the effectiveness of the LED strategies applied in both municipalities. In addition, the analysis shows that Apizaco, the local authority which pursued LED in a more comprehensive way, experienced a greater improvement in socio-economic development

Globalization, localization and sustainable livelihood

Despite economic progress made in quite a number of countries in the former ‘Third World’, between 20% to 50% of the world population is still excluded from this progress. By taking sustainable livelihood as a point of departure and by paying attention to actor-structure inter-actions, this paper conceptualizes these processes of social inclusion and exclusion. Livelihood is represented as a whole of dynamic interactions between actors and five vital capitals i.e. human, natural, physical, financial and social capital. These vital capitals are embedded in a social, economic, political and ecological structure. Interaction between actors and structure occurs via access and agency and results in processing of capitals to build livelihood. Livelihood is sustainable if it is capable of adequately satisfying self-defined needs and securing people against shocks and stresses put on capitals by structural factors. Livelihood strategies develop in arenas of conflicting or co-operating actors. Because livelihood strategies are multiple, individuals may belong to different interest groups and therefore social inclusion and exclusion is never rigid. Globalization is interpreted as localization, meaning a close association between homogenization and diversity or between the global and the local. Diversity it is not limited to socio-cultural domains but observed in economic and political domains too. Globalization-localization has important consequences for livelihood. The importance of the international and the local level will increase to the detriment of the national level. On the one hand,livelihood will become increasingly world wide and therefore multi-local. The different levels of scale in vital capitals and in structure come closer to each other and perhaps will even fuse. The arena will become increasingly global and livelihood strategies will become more homogenous. On the other hand,certain local characteristics of the arena remain or will even become more marked, and consequently livelihood strategies will need to become more specific too. Nevertheless,it is doubtful whether social exclusion will become a thing of the past. Therefore, global governance should have an important role in promoting sustainability of livelihoods. Global governance is explained as a global co-ordination by supra-regional and international governmental institutions of national governments balanced by an emerging international ‘civil society’. Both have a task in the regulation of global markets and development co-operation will have to develop towards a global social security system.As a result, it is concluded that research on sustainable livelihood will increasingly have to become multi-dimensional,multi-local and reciprocal

The Commodity Question: New Thinking on Old Problems

human development, aid, trade, security

Industrial cluster governance in a developing country context: evidence from the petrochemical sector in the Mexican state of Veracruz

This thesis combines analysis of the political economy of Mexico with the global value chain approach to study the trajectory of the development of the Veracruz cluster and the governance structure of vertical inter-firm relationships in the locality. The petrochemical cluster located in the state of Veracruz is formed by a pool of state-owned and local private companies and is arguably the largest agglomeration of industrial firms in southern Mexico. These firms are linked to one another through output-input relationships. State-owned petrochemical complexes, which are part of Petróleos Mexicanos (PEMEX), Mexico's oil and natural gas company, supply industrial raw materials that local private firms use to process intermediate petrochemical inputs. Empirical evidence demonstrates that state-owned firms exercise a disproportionate degree of authority over input transactions. The latter assertion is illustrated by the fact that PEMEX-Petrochemicals is the only domestic producer (and therefore supplier) of a large number of inputs demanded in the locality. This, along with the hazardous nature of petrochemical inputs and spatial proximity, has contributed to locking local firms into captive transactional relationships. The significance of studying the Veracruz cluster and the nature of inter-firm transactional relationships lies in the fact that both are heavily influenced by drivers inherent in the development path the country has followed in past decades, which is characterised in the first place by the adoption of import-substituting industrialisation (ISI) policies in the 1960s and 1970s and later by the implementation of market-orientated policies in the 1980s and beyond. The discussion is therefore situated in a much broader empirical setting that pays considerable attention to economic, political, and institutional factors. For instance, external determinants such as the extent of state intervention in economic planning in the 1960s and 1970s, the economic liberalisation process embarked on by Mexico in the 1980s and 1990s, the institutionalisation of sectoral regulatory policies, the reliance of the government on PEMEX revenues, and the implications of the North American Free Trade Agreement (NAFTA), among others, will help us understand the trajectory of the petrochemical industry and the governance of inter-firm transactional linkages in southern Veracruz

Business networks SMEs and inter-firm collaboration: a review of the research literature with implications for policy

This literature review, which was commissioned by the UK's Small Business Service is concerned with business networks, and their importance for the small business community. Business networks are sometimes defined as comprising only inter-firm relationships (e.g. those that exist between component supplier and a manufacturer). However, it soon becomes apparent that a broader perspective is required, if research findings are to contribute meaningful insights for policy and practice. We have therefore incorporated research evidence on personal networks, notably those associated with entrepreneurship, and on links between firms and supporting institutions, such as trade associations, government agencies and universities