Foreign Direct Investment, Regime Type, and Labor Protest in Developing Countries

Authors


  • Graeme B. Robertson is Assistant Professor of Political Science, University of North Carolina at Chapel Hill, Department of Political Science, 361 Hamilton Hall, Chapel Hill, NC 27599-3265 (graeme@email.unc.edu). Emmanuel Teitelbaum is Assistant Professor of Political Science and International Affairs, George Washington University, Department of Political Science, 1922 F Street, NW, Washington, DC 20052 (ejt@gwu.edu).

  • We thank Robert Adcock, Javier Aparicio, Joseph Hilbe, Steven Kelts, Gina Lambright, Eric Lawrence, Cecilia Martinez-Gallardo, Christopher Mitchell, Layna Mosley, Chad Rector, Elizabeth Saunders, Holger Schmidt, John Sides, participants of the GW Institute for Global and International Studies, and three anonymous reviewers for their comments on previous drafts. We thank the GW Center for International Business Education and Research (GW-CIBER) for generous funding provided to construct the dataset. We thank Hannah Schiff, Stoyan Stoyanav, Adanna Taylor, Jasmin Baveja, Saif Inam, Inayat Hemani, Lara Lechtenberg, and Emily Sydnor for their skilled research assistance. Replication data for the analyses presented here can be found at http://home.gwu.edu/~ejt/.

Abstract

We explore the relationship between FDI, regime type, and strikes in low- and middle-income countries. We argue that FDI produces social tensions and opportunities for protest that can result in higher levels of industrial conflict. However, the effect of FDI is moderated by regime type. While democracies tend to have higher levels of protest overall, they are better able than authoritarian regimes to cope with the strains arising from FDI. We cite two reasons. First, political competition forces regimes to incorporate workers, which shifts conflict from industrial relations to the political arena. Second, democracies provide workers with freedom of association rights, which facilitate institutionalized grievance resolution. We test the argument using a new dataset of labor protest in low- and middle-income countries for the period 1980–2005.

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