Trade policy, government and non-state regulation of international labor and environmental standards.

Summary Relocation of production to developing countries in the manufacturing sector has increased dramatically over the past three decades. A large body of economic literature shows that globalization and the offshoring of manufacturing to developing countries have been accompanied by negative effects. One response to these negative perceptions of globalization has been the rise of non-governmental organizations (NGOs). These activities, defined by Baron (2001) as private policies, have grown rapidly primarily because the traditional regulation of labor and environmental standards and the government monitoring and enforcement systems on which they depend have proven inadequate to the changing global economy. This research analyzes the economic implications of the emergence of private policies for higher social standards in developing countries characterized by very weak enforcement mechanisms. We conduct a theoretical and empirical analysis exploring the microeconomic aspect of social norms. Specifically, we want to assess the effects of: I) trade policies aimed at inducing Southern firms to respect social standards, II) NGO activism in favor of workers in domestic enterprises in poor countries, III) NGO enforcement strategies on firms' incentives to invest in "socially responsible" technologies, IV) the effects at the industrial level of increasing NGO pressure on multinational firms.