Global Policy Network

Questions for future research
raised at Hamburg meeting of IPPC, March 2000

Globalization and economic policy
From notes by Robert E. Scott, EPI, USA

Participants placed a strong emphasis on the importance of nonacademic, policy-oriented research. Many participants expressed a desire to identify public policy issues that require new policy ideas or approaches—those for which, if we had an answer, we could move ahead politically.

Ingemar Lindberg (Swedish Trade Union Confederation) argued that the International Progressive Policy Conference (IPPC) needs to develop a new ideological framework, as the new political right did in the 1960s and 1970s. John Evans (Trade Union Advisory Committee to the OECD, France) suggested that we need to anticipate pressures for significant structural changes, such as the growing potential for a financial crisis in the U.S. in the next few years, and to develop an arsenal of policy ideas and proposals on how labor would respond and how it would manage these crises if it were asked to do so.

Important areas for future research included changes in the global financial architecture, reforms to new regulatory structures for the global labor market, labor market strategies, and new initiatives in other types of macroeconomic and microeconomic policies.

I. Financial architecture and monetary policy

Tom Palley (AFL-CIO, USA) proposed a major program of research measures to expand and improve regulation of the international banking system, which should include the creation of a system of required reserves on financial assets (analogous to required reserves on some types of bank deposits, which are currently used to regulate banks and control money supplies). Proposals were made for policy seminars with academics and the research community, and with legislative staff and members.
Peter Botsman (Brisbane Institute, Australia) proposed new research on an ASEAN currency and/or currency area.
Ravi Naidoo (NALEDI, South Africa) and Roy Green (National University of Ireland, Galway) called for new research on the accountability of central banks.
Tom Palley (AFL-CIO, USA) called for the development of a set of progressive monetary policy guidelines, including union attitudes toward inflation, with an emphasis on whether there is a role for interest rate policy in dealing with inflationary conditions?

II. The architecture of global labor rights: WTO/ILO or new institution(s)?

The IPPC needs to develop a coherent strategy on international labor standards. Key issues include: 1) carrots (incentives) vs. sticks (penalties, including trade restrictions); and 2) the relative merits of the WTO, ILO, and some unspecified, alternative, new global trade organization.
Jeff Faux (EPI, USA) and several others called for new studies of the costs and benefits of protection. For example, a recent OECD study suggested that gross national product would increase by only 3% if all remaining barriers to trade were phased out. How do these benefits compare with the costs of liberalization, in the short and long run? Tom Palley (AFL-CIO, USA) added that we should examine whether, at the margin, the indirect effects of globalization are more or less important than the direct consequences (an example of an indirect channel is the impact of globalization on the interest rate channel — its often said that when the U.S. gets a monetary cold, Latin America gets pneumonia).
Ravi Naidoo (NALEDI, South Africa) suggested that the definition of contract work and the growing use of contingent labor will be important topics for research and discussion within the next 18 months, as the ILO debates the terms of a proposed new convention that will define and set limits on the use of contract work.

III. Employment and labor market strategies

There were several proposals for new research on the European Monetary Union (EMU) and labor’s bargaining position. David Foden (ETUI, Brussels) asked whether the unemployment problem is finished. Juhana Vartiainen (Labour Institute for Economic Research, Finland) suggested that a new critique of the NAIRU theories is needed.
Christian Weller (EPI, USA) and Peter Botsman called for further international work on pension funds, corporate governance, and economic development, including such tools as corporate codes of conduct and corporate campaigns. This may be an area for potential joint IPPC research (see forthcoming proposal from Weller). There were also related proposals in Track B for the creation of a shadow corporate monitoring committee.
Jürgen Hoffmann (Hamburg School of Economics and Politics, Germany) recommended further study of regional and sectoral policies, including the effects of union and labor policies on the location of production clusters, following on the conference presentation by Dieter Läpple (Technical University Hamburg, Germany) on Globalisation and the Economy of the Hamburg Region.
Juhana Vartiainen (LIER, Finland) called for new research on the impacts of demographic changes and immigration on labor markets. For example, it was suggested that, in the future, the need to maintain an adequate balance between working- and retirement-age populations in order to maintain the solvency of social security systems may result in increased labor support for higher immigration limits in many developed economies.
Peter Coldrick (ETUC, Belgium) suggested that the IPPC should examine the implications of e-commerce for employment and labor market strategies.
Coldrick also said that the implications of the EU model for development in the South, and in other regions in the North (e.g. North America, North Asia) should also be the subject of new research in the network.
Tom Palley (AFL-CIO, USA) recommended that the IPPC initiate a review of import substitution strategies for economic development, and that particular attention should be paid to issues such as the terms of trade between northern and southern economies, and the importance of market access both within and between regions.
Antonio do Prado (DIEESE, Brazil) suggested studies on several topics related to the flexibility of labor markets, including international variations in the extent of flexibilization, and proposals for reform of regulations on work time, such as annualized limits on hours.
Prado (DIEESE, Brazil) also suggested that the IPPC should do more research on methodologies for measuring unemployment and the impact of flexibilization on these various measures, including narrowly defined unemployment (ILO/OECD definitions), involuntary underemployment, and discouraged workers (labor force dropouts). Ravi Naidoo (South Africa) added that we should examine changes in the vulnerability of different types of workers to spells of unemployment.
Several speakers in both tracks noted that it is important to determine how the collective bargaining process in Europe has been affected by the creation of the EMU. Has the bargaining power of labor been reduced? Has labor gained more influence over monetary policy? In particular, Juhana Vartiainen (LIER, Finland) suggested that the IPPC examine the relationship between corporatism and wage determination in European countries.
During the general discussion, Robert Taylor (Financial Times, UK) suggested that the IPPC should jointly produce a regular report, perhaps titled State of the Working World. Several other participants endorsed Taylor’s proposal.

IV. New fiscal, macroeconomic and microeconomic policies

Juhana Vartiainen (LIER, Finland) called for new research on the global governance of consumer protection, including for example, enforcement of consumer rights fraud/complaint/damage claims over the internet, which would require new institutions.
Vartiainen (LIER, Finland) also suggested that the IPPC should consider the implications of e-commerce taxation (and the moratorium on new e-taxes) for the tax structures of member countries.
Roy Green (Ireland) recommended that the IPPC evaluate the effectiveness of industrial policies and industrial targeting in the era of highly volatile exchange rates, particularly in the North. A 20% change in currency values, can easily negate the effects of even the most generous industrial development program, and such currency fluctuations have become increasingly common in the past two decades.
Several speakers called for IPPC research on the "New Economy" and new growth theory, including: 1) the European Tiger Economies (Ireland, Austria, Netherlands, Denmark, Portugal, and Norway); 2) the role of technology and computers; and 3) the post-bubble economy/worldview.
Ingemar Lindberg (Sweden) said that the IPPC should develop a new stream of research on the "Right to Life-Long Learning," which should consider the rights of both workers and of individuals.
Andrew Glyn (Oxford University, UK) suggested that the IPPC should develop research that denies the assertion that we can "no longer afford the social welfare state." This research should document the need for programs to redress growing levels of income inequality and its consequences. Mike Waghorne (Public Services International, France) added that we need to systematically explain what social wage and welfare benefits – public goods and services – have been won, and how these victories were achieved. Robert Taylor (Financial Times, UK) suggested that it was time to go on the offensive for social welfare programs.

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