Arresting the Opposition: Labor Repression and Trade Liberalization in Developing Countries

Abstract

AbstractAt the turn of the twenty-first century, why did country after country in the developing world open their economies to the global market? This paper argues that increases in democracy were more likely to lead to trade liberalization when governments violated workers’ basic rights to act collectively. Democracy empowered pro-trade domestic groups and therefore had the potential to lead to trade liberalization, but respect for labor rights empowered protectionist labor unions to launch protests and strikes that hampered such reforms. This paper supports these arguments with a multimethod approach that combines quantitative analysis of data from 126 developing countries from 1985 to 2010 with qualitative case studies of Argentina and Mexico. In general, the empirical evidence suggests that democracy and labor repression often worked together to facilitate the process of trade liberalization in developing countries.