Labor Standards and Labor Market Flexibility in the Middle East: Free Trade and Freer Unions?

Abstract

This paper examines how two, potentially opposing trends—pressure to adhere to international labor standards and movement toward greater labor market flexibility—have affected labor market characteristics in the Middle East. Focusing on 13 countries, the paper presents indices of de jure and de facto labor flexibility and standards in the region. The paper makes two main contributions. First, it develops a typology of post-independence Middle Eastern political economies based on oil dependence and political regime type (including oil monarchies, low-income republics, and low-income monarchies) to explain widely divergent sub-regional trends in labor flexibility and standards. Second, it argues that different actors have spurred changes in labor flexibility and standards in distinct sub-regional political economy groupings. In the low-income countries, the state and domestic business were most instrumental in driving increased flexibility, although unions were able to win concessions in countries where the political system permitted some voice for labor. In the oil monarchies, international pressure, particularly through negotiations over trade agreements with the USA, spurred a trend toward increased labor standards, while domestic programs to indigenize the workforce account for a trend toward decreased flexibility.