The Generalized System of Preferences and NGO activism

Lionel Fontagné and Michela Limardi

Journal of Development Economics, 2024, vol. 166, issue C

Abstract: Can NGOs contribute to the implementation of Labor Laws in a developing country? We exploit as a quasi-natural experiment the renegotiation of the Generalized System of Preferences (GSP) between the US and Indonesia in 1994, which induced the Indonesian government to raise the level of the legal minimum wage. Using data from Indonesian manufacturing firms, a diff-in-diff analysis and an event study show that the activism of workers’ rights groups helped increase firm-level average wages up to the minimum-wage level, not only inside but also outside the export sector. Labor NGO activism helped to implement the new minimum wage standards in a country that lacked strong governmental institutions.

Keywords: GSP; Labor standards; NGOs; Wage determination (search for similar items in EconPapers)
JEL-codes: J52 J80 (search for similar items in EconPapers)
Date: 2024
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Related works:
Working Paper: The Generalized System of Preferences and NGO activism (2024)
Working Paper: The Generalized System of Preferences and NGO activism (2024)
Working Paper: The Generalized System of Preferences and NGO activism (2024)
Working Paper: The Generalized System of Preferences and NGO Activism (2021)
Working Paper: The Generalized System of Preferences and NGO Activism (2021)
Working Paper: The Generalized System of Preferences and NGO Activism (2021)
Working Paper: The Generalized System of Preferences and NGO Activism (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:166:y:2024:i:c:s0304387823001633

DOI: 10.1016/j.jdeveco.2023.103207

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