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We explore the impact of foreign direct investment, disaggregated by home (source) country on labor rights outcomes in developing nations. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]

This paper considers international bond investor reaction to Turkey's possible EU accession. We demonstrate that investors react positively to even this far-distant and uncertain event, suggesting that investors could react much further in advance of political events and institutional change than suggested by existing analysis of the impact of politics on financial market actors. We show that one of the main changes brought about by the accession process is the emergence of new investors, able to invest only because of that accession process. This both highlights the importance of disaggregating financial markets, and suggests that market reaction to institutional change is likely to be especially important when that institutional change results not only in reactions by existing investors, but also changes in the types of investors active in a particular market. We make some brief comparisons between the EU accession process and IMF programmes. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]

This article addresses a key issue in debates regarding economic globalization: to what extent does the internationalization of production, via foreign direct investment, lead to increased abuses of workers in developing countries? Using a new dataset on collective labor rights violations, we assess the relationship between foreign direct investment and labor rights violations in over 100 developing nations, for 1985-2000. Our focus is on the legal rights and actual capacity of workers to organize, strike, and bargain collectively. In cross-sectional time series analyses, we find that, where accumulated stocks of foreign direct investment are higher, violations of collective labor rights are greater. We also report evidence of competition within groups of countries: labor rights violations in one country are strongly associated with labor rights violations in the region, as well as in other countries at similar levels of development. These findings suggest that the critics of economic globalization have a point: foreign direct investment could lead to downward pressures on workers? collective rights. [ABSTRACT FROM AUTHOR]

This paper investigates the roots of policymaking autonomy vis-à-vis international capital markets in developing nations. We do so by decomposing the elements of “political risk,” and by theorizing about the implications of different components of risk for government policymaking. Political risk enters prominently in the study of economics and political science; it has been associated with outcomes including stock returns, capital flight, exchange rates, sovereign borrowing, and foreign direct investment flows. In general, where political risk is greater, investors will demand higher risk premiums, or they will refrain from investment. Nations with greater political risk therefore attract less capital or pay higher borrowing costs. As a result, political risk is a critical mechanism through which global economic forces shape domestic political outcomes.Yet, our understanding of political risk and its implications remains incomplete. Specifically, it is unclear whether market responses to political phenomena are driven by risk per se, or whether market responses are shaped more powerfully by uncertainty about the future actions of unknown political leaders. This distinction is crucial for understanding the scope and nature of market constraints on government action, and for understanding the causal linkages between globalization and domestic policymaking. We conjecture that the partisan identity of the government and the nature of political institutions will provide important signals to owners of financial capital about the risk type of the government. For governments of the left, however, we expect greater uncertainty surrounding the partisan signal of government credibility, given the disparities in market-oriented policy discipline adopted by left-leaning governments. Such uncertainty should not be as great where governments of the right are concerned. Thus, we expect sovereign debt markets to reflect such uncertainty about the government risk type in higher premiums charged to sovereign borrowers where left-leaning executives take power, compared to elections of right-wing executives.We test our propositions using both a large-N analysis of differences in interest rate spreads on government debt, a key indicator of political risk across emerging market countries over time, and by conducting case and interview research for Brazil. In the case study, we examine market responses (risk premiums) to the presidential campaign of Luiz Inácio Lula da Silva during the 2002 presidential election campaign, and compare these to data gathered in mid-2006 as Lula campaigned for re-election. As additional evidence, we draw upon interviews with professional fund managers in London and in São Paulo in mid-2006 and compare and contrast the information used to evaluate the “political risk” associated with the Lula government. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]