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How can trade unionism affect welfare consequences of trade and investment reforms in a developing economy?

Sarbajit Chaudhuri ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper explains the existence of intersectoral wage differential in a developing economy in terms of trade union behavior in the formal sector industry and analyzes its role in predicting the outcomes of trade and investment reforms on welfare. It provides theoretical explanations of certain real life phenomena e.g. why the developing countries are yearning for foreign capital despite the standard immiserizing result and why these countries are not reducing the tariff rates beyond certain levels although they have chosen free trade as their development strategy.

Keywords: Labour market imperfection; trade union behavior; foreign capital; trade liberalization; general equilibrium. (search for similar items in EconPapers)
JEL-codes: D58 F13 F21 J51 O1 O17 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2014-09-30
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