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

TitleForeign Direct Investment, Regime Type, and Labor Protest in Developing Countries
Publication TypeJournal Article
Year of Publication2011
AuthorsRobertson, Graeme B., and Teitelbaum, Emmanuel
JournalAmerican Journal of Political Science
Volume55
Issue3
Pagination665 - 677
Keywordsdeveloping countries, foreign direct investment, industrial conflict, labor strikes
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.