Deakin, Simon --- "Labour law and development in the long run" [2016] ELECD 1535; in Marshall, Shelley; Fenwick, Colin (eds), "Labour Regulation and Development" (Edward Elgar Publishing, 2016) 33

Book Title: Labour Regulation and Development

Editor(s): Marshall, Shelley; Fenwick, Colin

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781785364891

Section: Chapter 2

Section Title: Labour law and development in the long run

Author(s): Deakin, Simon

Number of pages: 27

Abstract/Description:

It is often claimed that labour laws of the kind which have characterised industrial economies since the middle decades of the twentieth century are of little relevance to the conditions of today’s developing countries. Labour laws, this argument goes, can only operate where certain background conditions, including stable employment, effective worker representation and a high degree of state capacity, are met. The conjunction of informal work and ineffective enforcement in low and middle-income countries is likely to render labour law rules irrelevant in those contexts (Standing, 2011). Another view, not entirely consistent with the first since it presupposes at least some degree of effectiveness for worker-protective labour law, is that the application of labour law rules to emerging markets will harm their development (Langille, 2010). Various normative conclusions flow from these positions. One is that the extension of ‘normal’ or ‘standard’ worker protections to emerging markets should be delayed until they have reached the necessary level of development (Sunstein, 1997). Another, more radical, is that emerging markets would be well advised to avoid worker-protective labour laws as far as possible, given their supposedly negative implications for economic efficiency (Botero et al., 2004). This chapter will seek to present an alternative perspective on the relationship between labour law and development. It will argue that over the long run of the emergence of industrial economies, beginning in western Europe and North America and then spreading across the world, labour law has acted as a developmental institution, that is, as a set of linked mechanisms and practices which has contributed to economic growth and to the achievement of complementary policy goals including poverty alleviation and social cohesion. Section 2 reviews two of the leading theories on law and development, structural adjustment theory and legal origin theory, and suggests that, while they may take different normative positions on the desirability of labour law regulation, they share a linear conception of the relationship between legal and economic change. Section 3 presents a systemic perspective which explains, by contrast to the prevailing accounts, how labour law rules can be understood as coevolving with economic institutions as a market economy develops. Section 4 identifies the principal regulatory functions and techniques associated with labour law when it is viewed through a systemic lens. Section 5 presents empirical evidence on the recent operation of labour law rules in developed and developing countries, using longitudinal data from the Cambridge Centre for Business Research Labour Regulation Index (CBR-LRI). Section 6 concludes.