The rules of globalisation: A place for labour


Contrary to popular myth, the most serious threat to workers from globalisation is not trade or investment, on which many of our members depend for their livelihoods, but the erosion of the legitimate role of the state, and in particular the effective public regulation of markets.

The last 20 years of the 20th century were dominated by the leitmotif of liberalisation, privatisation and deregulation. At the same time governments were stepping away from their responsibilities to set a policy framework, whether in tax rates, economic policy management, interest rate policy or exchange rate policy.

But the need for a framework of mechanisms for global market governance is clear from events such as Californian power cuts in the wake of energy deregulation, British rail crashes in the wake of privatisation and a corporate governance crisis following the collapse of Enron in the United States. The key debate at the beginning of the 21st century is how to guarantee effective public regulation.

A spectrum of mechanisms is available, from “hard” international regulations covering specific fields such as those of the WTO and IMF, through looser policy co-ordination such as the G8, OECD, and ILO, to regional integration, national and district level policies. But the international governance architecture shows a striking imbalance in the power and enforcement capabilities of different institutions. It is unacceptable that the world system of governance has binding protection for intellectual property rights, investors’ rights, and even environmental standards and yet denies enforceable protection for human rights, including core labour rights.

Some progress has been made towards the goal of effective regulation to guarantee core labour rights. The OECD and World Bank now regard core standards and trade union recognition as at least neutral in their economic effects, and at best positive because of their influence on improving the quality of governance. The OECD now has revised its Guidelines on Multinational Enterprises which set out a benchmark for corporate behaviour. The debate has now moved on to enforcement mechanisms. Modest progress could be made, for example, by modifying WTO rules to clarify the primacy of human rights over trade rules and developing a codex of existing human rights obligations as called for by the UN High Commissioner on Human Rights, Mary Robinson.

But if stable and sustained long-term growth is to be realised changes must also be made to the financial market architecture. For too long the debate over financial market reform has been held behind closed doors by bankers and finance ministry officials. The institutions charged with financial market reforms remain closed to discussion with the labour movement and civil society. Labour must have a “place at the table” in these debates. The OECD should work as a “bridge” to make this happen.

Global unions have put forward a range of measures designed to establish better regulation of international financial markets. These include improved fiscal and monetary policy co-ordination between major currency zones and serious examination of an international tax on foreign exchange transactions to finance “global public goods”. (Tobin tax: see article by Helmut Reisen).

There needs to be a non-ideological debate on the role of the public sector that accepts the notion that an effective public sector is an economic as well as social necessity. The response of the trade union movement to globalisation is not to bemoan changes or react defensively. The response is to campaign for the mechanisms of governance to manage them.

©OECD Observer No. 231/232, May 2002

Economic data

GDP growth: +0.6% Q1 2019 year-on-year
Consumer price inflation: 2.3% May 2019 annual
Trade: +0.4% exp, -1.2% imp, Q1 2019
Unemployment: 5.2% July 2019
Last update: 8 July 2019

OECD Observer Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Subscribe now

<b>Subscribe now!</b>

To order your own paper editions,email

Online edition
Previous editions

Don't miss

  • MCM logo
  • The following communiqué and Chair’s statement were issued at the close of the OECD Council Meeting at Ministerial level, this year presided by the Slovak Republic.
  • Food production will suffer some of the most immediate and brutal effects of climate change, with some regions of the world suffering far more than others. Only through unhindered global trade can we ensure that high-quality, nutritious food reaches those who need it most, Angel Gurría, Secretary-General of the OECD, and José Graziano da Silva, Director-General of the United Nations Food and Agriculture Organization, write in their latest Project Syndicate article. Read the article here.
  • Globalisation will continue and get stronger, and how to harness it is the great challenge, says OECD Secretary-General Gurría on Bloomberg TV. Watch the interview here.
  • OECD Secretary-General Angel Gurría with UN Secretary-General António Guterres at the 73rd Session of the UN General Assembly, in New York City.
  • The new OECD Observer Crossword, with Myles Mellor. Try it online!
  • Listen to the "Robots are coming for our jobs" episode of The Guardian's "Chips with Everything podcast", in which The Guardian’s economics editor, Larry Elliott, and Jeremy Wyatt, a professor of robotics and artificial intelligence at the University of Birmingham, and Jordan Erica Webber, freelance journalist, discuss the findings of the new OECD report "Automation, skills use and training". Listen here.
  • Do we really know the difference between right and wrong? Alison Taylor of BSR and Susan Hawley of Corruption Watch tell us why it matters to play by the rules. Watch the recording of our Facebook live interview here.
  • Has public decision-making been hijacked by a privileged few? Watch the recording of our Facebook live interview with Stav Shaffir, MK (Zionist Union) Chair of the Knesset Committee on Transparency here.
  • Can a nudge help us make more ethical decisions? Watch the recording of our Facebook live interview with Saugatto Datta, managing director at ideas42 here.
  • The fight against tax evasion is gaining further momentum as Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia signed the BEPS Multilateral Convention on 24 January, bringing the total number of signatories to 78. The Convention strengthens existing tax treaties and reduces opportunities for tax avoidance by multinational enterprises.
  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at .
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2019