Essays in Honour of Peter Lloyd, Volume II
Edited by Sisira Jayasuriya
Chapter 2: The economic crisis, labour standards and trade performance in East Asia
2. The economic crisis, labour standards and trade performance in East Asia Keith E. Maskus* 1. INTRODUCTION It is a pleasure to honour Peter Lloyd, who for decades has been at the top rank of applied international trade economists. Peter has made fundamental contributions in trade measurement, in the theory of trade policy, and in empirical analysis of trade restrictions. He has also been intimately involved in considering the role of trade in the development of East Asian economies. In that context, I am delighted to oﬀer this chapter. In this chapter I analyse a question that is both straightforward and diﬃcult to answer: ‘Did the economic crisis in East Asia of the late 1990s have the eﬀect of weakening labour rights in those countries, with a consequent increase in export performance of labour-intensive manufacturing goods?’ The question seems straightforward because, as has been suggested in the popular literature, collapsing economic conditions would be expected to diminish social protection and because, as civil society would have it, such diminution would expand export competitiveness. It is diﬃcult to answer both because the logic is far more complex and because available data are poorly suited to the task. Despite these diﬃculties the question is of considerable interest and deserves analytical attention. To this end I review available evidence on relationships between labour standards and trade, then go on to an empirical analysis of the recent East Asian experience. The data suggest that exports of labour-intensive goods...
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