Static analysis of the role of labour standards in national competitiveness
This chapter explores the theoretical foundations of the debate centred on the role of labour standards in enhancing national competitiveness. The chapter is divided into five sections. Section 6.1 introduces the discussion of how labour standards and costs affect competitiveness. Section 6.2 then introduces some other initial considerations from a ‘second best’ or real world-and hence more complex-perspective. Section 6.3 addresses the debate by using theories of MNC decisions on where to locate. Section 6.4 explores the results of the important 1996 OECD study on labour standards and trade, as well as some criticisms and concerns based on the issues raised in this study. Finally, Section 6.5 draws conclusions from all of these approaches, on the impact of labour standards on national competitiveness, now and in the future, given the existence of diverging national interests in promoting international labour standards.