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International Institutions and Workers’ Rights: Between Labor Standards and Market Flexibility


International financial institutions (IFIs) like the International Monetary Fund and the World Bank often have used the leverage afforded them through their loan mechanisms to demand domestic labor market flexibility. At the same time, the International Labour Organization’s call to respect Core Labor Standards (CLS) in the global economy has increasingly gained acceptance since 1998. CLS that sanction freedom of association and collective bargaining have been particularly emphasized by the ILO since these are collective rights that enable the exercise of other rights. While IFIs have generally held to free market principles, new research findings and international pressure has led the IMF and World Bank to be more open to the idea of core labor standards. Implementation has often lagged, but some advances have been made. This includes the World Bank’s commitment to ensure respect for CLS through its private sector lending arm. Yet to be seen is whether these policy shifts will lead to greater respect for labor standards or whether the continuation of market-oriented reforms will further undermine labor’s collective power, creating new challenges for future resistance.

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  1. 1.

    Some 29 of these Conventions have been shelved or withdrawn; see

  2. 2.

    For the history behind defining these standards as core and debates about their potential impact on the international labor rights regimes, see the exchanges between Alston (2004, 2005), Langille (2005), and Maupain (2005).

  3. 3.

    The Digest is available at

  4. 4.

    The ILO defines essential services as those in which the interruption of service would endanger the life, personal safety, or health of the whole or part of the population. The hospital sector, electricity services, water supply services, telephone service, and air traffic control qualify as essential services.

  5. 5.

    According to the Norwegian Ambassador to the WTO at the time, Terje Johannessen, “it took two full nights to draft this paragraph. There were still many lingering doubts about the wording, but when the US supported the paragraph, the issue was decided.”

  6. 6.; accessed December 21, 2005

  7. 7.

  8. 8.

    It is worth noting that, since the 1980s, no developed countries have resorted to IMF support due to their aversion to the Funds conditionality (Buira 2003: 7).

  9. 9.

    All ratifications of Convention 182 on the worse forms of child labor have taken place since 1998 because the convention was not initiated until 1999.

  10. 10.

    For unionization rates for Brazil, see the Instituto Brasileiro de Geografia e Estatística (IBGE). Unionization rates in Costa Rica and Honduras come from the ILO.

  11. 11.

  12. 12.

    These letters of intent are available online at The sample is partial since the IMF does not release letters of intent for 5 years, unless the borrowing government agrees to their public release.

  13. 13.

    Failure to meet IMF conditions results in a suspension in disbursements. Thus, disbursement rates are an indication of compliance, and a disbursement rate of 75% or higher can be considered an indicator of compliance (Buira 2003: 8). Only a fraction of programs end early due to extreme success (Mussa and Savastano 1999: 15).

  14. 14.

    The ICFTU has tried to hold the World Bank to its word, and after the former publicized labor rights abuses by Grupo M, the Dominican Republic’s largest export processing zone operator, the IFC required Grupo M to respect all of the CLS as a condition of the loan (ICFTU 2006b).


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Anner, M., Caraway, T. International Institutions and Workers’ Rights: Between Labor Standards and Market Flexibility. St Comp Int Dev 45, 151–169 (2010).

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  • Labor standards
  • Flexibility
  • ILO
  • IMF
  • World Bank