 The Theory of Raising Rivals’ Costs and Evidence from the International Labour OrganisationBernhard Boockmann () and Roland Vaubel The World Economy, 2009, vol. 32, issue 6, 862-887 Abstract: The strategy of raising rivals’ costs may be adopted by firms in a market, a cartel or interest group or by political majorities in a federal state or international organisation. We provide a first survey and formal exposition of the theory and present examples for each of these applications. In an international cross‐section analysis using unpublished data for the period 1980–98, we explain roll‐call voting of government representatives in ILO committees drafting international labour standards. Using four different indices of regulation and country samples, we find that governments vote for tighter standards if labour regulation is high in their own country. Our evidence rejects the hypothesis of Brown, Deardorff and Stern that countries exporting low‐skill labour‐intensive products vote for ILO standards in order to restrict their own supply and increase their terms of trade. As expected, left‐party governments vote more in line with labour unions than other governments do. Domestic regulation has a considerably larger effect on voting if the convention in question would raise labour costs in ILO member states. This indicates that highly regulated countries try to raise others’ costs. Date: 2009 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:worlde:v:32:y:2009:i:6:p:862-887 Ordering information: This journal article can be ordered from Access Statistics for this article The World Economy is currently edited by David Greenaway More articles in The World Economy from Wiley Blackwell |
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