Measuring Effective Labour Regulation in the Less Developed World: Recent Advances and Challenges Ahead

Abstract

This article critically reviews the literature on labour enforcement with a focus on less developed countries. Despite measurement limitations, the evidence indicates that enforcement is quite low in poorer countries; there are fewer inspectors and inspections, lower penalties, and less trust in the judiciary compared to richer countries. The lower level of enforcement contributes to higher rates of violations of workers’ rights. More controversial are the effects of enforcement on employment. Moreover, it is unclear how to prompt less developed countries to increase enforcement. This article discusses the scant evidence about the role of trade agreements, labour unions, international organisations, and Weberian bureaucracies. The political economy of labour enforcement is still heavily underdeveloped. We conclude by suggesting avenues for future research.