Regulation at Work: Globalization, Labor Rights, and Development

Over the past three decades, globalization has created new regulatory challenges. As businesses rail against “red tape” and threaten to move if labor, health and safety codes do not become more “flexible,” what are policymakers to do? When workplaces are spread around the world, what kind of new regulatory system might ensure that basic standards are met—not only to protect consumers but also workers and their communities around the world? The question is perhaps especially pressing in developing regions: in many countries, governments already find it difficult to uphold the codes that are on their books, yet a relentless chorus of international agencies and global corporations warns them that strengthening enforcement will frighten away investors, reducing employment and undermining future growth.

What does the threat of capital mobility mean for worker and consumer protection? Can regulation be redesigned to take advantage of the new possibilities as well as the new challenges—inherent in globalization? Many observers have suggested that instead of seeing globalization only in negative terms, perhaps we can turn to global trade for a new approach to regulation: if ethical consumers can choose to buy only goods produced under conditions that comply with global label standards, perhaps producers will discover an incentive compelled to treat workers better. Why have so many activists viewed consumer-backed monitoring as a first step toward regulating global production? What are the broad characteristics of these schemes, and how do they work in practice? Does consumer-backed voluntary pressure offer a viable strategy for building new regulatory systems for global production chains?