The Race to the Bottom, from the Bottom

36 Pages Posted: 8 May 2006

See all articles by Nancy H. Chau

Nancy H. Chau

Cornell University - School of Applied Economics and Management; IZA Institute of Labor Economics

Ravi Kanbur

Cornell University; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

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Abstract

The dominant perspective in discussions of labour and environmental standards and globalization is that of North-South competition and its impact on Northern standards. This paper presents an alternative perspective, that of South-South competition to export to the North and its impact on Southern standards. It develops a simple model of Southern competition, and demonstrates that whether a Southern race to the bottom is possible depends intricately on the Northern demand curve, the size of large exporters relative to each other and the relative size of the competitive fringe of small exporters. The possibility that Northern trade protectionism may undermine Southern standards is also examined.

Suggested Citation

Chau, Nancy H. and Kanbur, Ravi, The Race to the Bottom, from the Bottom. Economica, Vol. 73, No. 290, pp. 193-228, May 2006. Available at SSRN: https://ssrn.com/abstract=896816 or http://dx.doi.org/10.1111/j.1468-0335.2006.00483.x

Nancy H. Chau (Contact Author)

Cornell University - School of Applied Economics and Management ( email )

Ithaca, NY 14853
United States
607-255-4463 (Phone)
607-255-9984 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Ravi Kanbur

Cornell University ( email )

301-J Warren Hall
Ithaca, NY 14853
United States
607-255-7966 (Phone)
607-255-9984 (Fax)

HOME PAGE: http://www.kanbur.dyson.cornell.edu

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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