Taxing the shadow: The political economy of sweatshops in La Salada, Argentina

Matías Dewey

No 14/18, MPIfG Discussion Paper from Max Planck Institute for the Study of Societies

Abstract: An effect of the informalization of production and distribution processes affecting the garment industry has been the spread of sweatshops in areas of industrial eclipse. Whilst the proliferation of these economies is usually analyzed as an outcome of sweeping macro trends, such as the “transformation of global capitalism,” the impact of domestic political decisions fostering an informal and illegal garment sector is less acknowledged. The present discussion paper focuses on informal arrangements that transform and reinforce such major forces at the local level. By alluding to shadow policies, this study sheds light on political actors who take advantage of the fact that some illegal economic activities are not morally contested and are considered to “preserve” jobs and “foster” consumption. Using data gathered in a six-month period of fieldwork in Buenos Aires, I demonstrate that the expansion of the La Salada market is the outcome of a well-established informal taxation system, a robust institutional framework that helps regulatethe growing demand of clothes and jobs by low-income sectors of the population.

Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:mpifgd:1418

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