Beyond Sweatshops: Foreign Direct Investment and Globalization in Developing Nations / Edition 1

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The expansion of foreign direct investment (FDI) in manufacturing and assembly has raised concerns that workers may be exploited in developing economies while jobs are drained from developed economies at home. In Beyond Sweatshops. Theodore Moran shows how the dangers associated with FDI can be avoided and the globalization process turned into a win-win outcome for workers and communities in both developed and developing countries. The effects of trade liberalization have been widely studied, yet the impact of FDI is less well known. By filling in gaps in evidence and analysis, Moran provides a foundation for understanding the effects of globalization of industry on workers, firms, and communities in home and host countries.
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Editorial Reviews

Foreign Affairs
Critics often charge Western firms with exploiting workers in poor countries through low pay and dire conditions. Here Moran evaluates these claims and appraises the arguments for an international agreement on minimum labor standards and on the mechanisms that would enforce them. He is pessimistic about the prospects for reaching agreement with developing countries beyond the International Labor Organization's four core labor standards, and he doubts formal mechanisms could help the workers they targeted even if they were agreed upon. He argues that foreign direct investment (FDI), in contrast, is highly beneficial to host countries, especially if it is closely integrated with parent firms. He also finds that FDI generally improves conditions of local workers, especially skilled workers. Although instances of harsh labor conditions can be found, senior management officials will correct them once they (and the public) become aware of them. The author concludes that the best approach to improving labor conditions in foreign firms in poor countries is a voluntary one, in which firms publicly state their policies and are held to them through transparency and public accountability.
From the Publisher

"The great strength of [Moran's] book is its large quantity of solid, detailed, and up-to-date empirical evidence.... 'Beyond Sweatshops' should be mandatory reading for anyone interested in the reality rather than the rhetoric of globalization." —Guy Pfeffermann, Chief Economist and Director of Econ. Dep., IFC, Finance & Development, 12/1/2002

"The book is really quite good. Moran's style is clear, precise, and extraordinarily well researched and well organized.... [Moran's] style, reminiscent of a well-written judicial decision, allows the reader to feel as though he or she is part of an objective, fact-finding mission with no preconceived answers.... eminently readable, clear, and... interesting." —Alex Robbins, Stanford University, Stanford Journal of International Relations, 1/1/2003

"Well written and thought-provoking, Theodore Moran's Beyond Sweatshops offers a comprehensive introduction to critical issues of labor standards in global commerce, especially in connection with foreign direct investment (FDI). Beyond Sweatshops is an important contribution to labor rights literature." —Carol Pier, Labor Rights and Trade Researcher, Human Rights Watch, Industrial and Labor Relations Review

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Product Details

  • ISBN-13: 9780815706151
  • Publisher: Brookings Institution Press
  • Publication date: 1/28/2002
  • Edition description: REV
  • Edition number: 1
  • Pages: 208
  • Product dimensions: 6.00 (w) x 9.00 (h) x 0.48 (d)

Meet the Author

Theodore H. Moran is a nonresident fellow at the Center for Global Development and holds the Marcus Wallenberg Chair at the School of Foreign Service, Georgetown University. He is founder and director of the Landegger Program in International Business Diplomacy. His recent books include Does Foreign Direct Investment Promote Development? (CGD and IIE, 2005) and Beyond Sweatshops: Foreign Direct Investment and Globalization in Developing Countries (Brookings, 2002).

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Table of Contents

1 Introduction 1
2 Foreign Direct Investment in Low-Wage, Low-Skill Activities 10
3 Improving the Treatment of Workers at the Bottom by Providing a Path Up from Below 23
4 Core Standards for the Treatment of Workers around the World 46
5 WTO-Based Enforcement of Core Labor Standards 66
6 Voluntary Mechanisms for Improving the Treatment of Workers 85
7 Using Foreign Investment to Shape Host-Country Development 108
8 The Impact of Outward Investment on the Home Economy of the Investor 139
9 A Summing Up 147
Notes 167
Index 189
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