Beyond Sweatshops: Foreign Direct Investment and Globalization in Developing Nations
Theodore H. MoranBooks.org participates in affiliate programs including Bookshop.org and the Amazon Services LLC Associates Program. We may earn a commission from qualifying purchases made through links on this page, at no additional cost to you.
Overview
The expansion of foreign direct investment (FDI) in manufacturing and assembly has raised concerns that workers may be exploited in developing economies while jobs are drained from developed economies at home. In Beyond Sweatshops. Theodore Moran shows how the dangers associated with FDI can be avoided and the globalization process turned into a win-win outcome for workers and communities in both developed and developing countries. The effects of trade liberalization have been widely studied, yet the impact of FDI is less well known. By filling in gaps in evidence and analysis, Moran provides a foundation for understanding the effects of globalization of industry on workers, firms, and communities in home and host countries.Synopsis
Moran (international business and finance, Walsh School of Foreign Service at Georgetown U.) attempts to counter widespread concerns that the globalization of manufacturing in the form of foreign direct investment (FDI) results in the exploitation of workers in host countries and the loss of jobs in developed countries. He examines some of the proposed solutions to this concern, including adopting labor standards into the World Trade Organization framework, invariably favoring voluntary "enforcement" measures. He argues that with a little modification, the globalization of FDI, leads to the gradual raising of skill levels and economies in developing countries and the growth of high-value-added activities in developed countries. Annotation c. Book News, Inc.,Portland, OR
Foreign Affairs
Critics often charge Western firms with exploiting workers in poor countries through low pay and dire conditions. Here Moran evaluates these claims and appraises the arguments for an international agreement on minimum labor standards and on the mechanisms that would enforce them. He is pessimistic about the prospects for reaching agreement with developing countries beyond the International Labor Organization's four core labor standards, and he doubts formal mechanisms could help the workers they targeted even if they were agreed upon. He argues that foreign direct investment (FDI), in contrast, is highly beneficial to host countries, especially if it is closely integrated with parent firms. He also finds that FDI generally improves conditions of local workers, especially skilled workers. Although instances of harsh labor conditions can be found, senior management officials will correct them once they (and the public) become aware of them. The author concludes that the best approach to improving labor conditions in foreign firms in poor countries is a voluntary one, in which firms publicly state their policies and are held to them through transparency and public accountability.