Social Dumping in the Transformation Process?

Hans-Werner Sinn

No 8364, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Business representatives and union leaders in highly industrialised countries often accuse the governments of less-developed countries of practising social dumping in the sense of deliberately neglecting work-place safety legislation, co-determination rights and other fringe benefits which define the quality of workplaces. This paper refutes this view by modelling the transition path of a less-developed small open economy that faces transactions costs when trading capital and labour with the rest of the world. It shows that competitive markets and competitive governments choose Pareto efficient transition strategies which are characterised by a sluggish development of market wages and government-imposed social standards.

JEL-codes: H50 J30 (search for similar items in EconPapers)
Date: 2001-07
Note: ITI PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Working Paper: Social Dumping in the Transformation Process (2001)
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