Author Archive | Layna Mosley

Will the New Agreement Help Safety Standards in Bangladesh?

The collapse of the Rana Plaza complex, which included several garment manufacturers, is yet another reminder of the working conditions that too often prevail in the apparel sector. The collapse resulted in over 1,100 deaths, and the toll continues to rise.

The global apparel industry is characterized by a vast network of subcontracting relationships. Major brands rarely own the factories in which their products are made; most factories process orders for a variety of firms, and most brands rely on an array of subcontractors. These arm’s length relationships make it difficult for even well-intentioned global brands to monitor conditions in their supply chains (see here for my argument the effects of subcontracting versus directly owned production on workers’ rights). Additionally, with competition in the industry based on speed and price – the subcontractor who can deliver cheaply and quickly enough to satisfy fickle Western consumer markets tends to win business – local factories have incentives to ignore domestic laws and corporate codes of conduct related to working hours and health and safety. Continue Reading →

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From AAA to AA+: Markets, Governments and the Downgrade

Standard and Poor’s downgrade of United States debt came after repeated warnings of such action: as policymakers argued over whether, and with which conditions attached, to raise the U.S. debt ceiling, the agency warned that a downgrade was possible.

While the consequences of the downgrade – the first time in over seventy years that U.S. debt will not have a risk-free, AAA rating – remain to be seen, the event offers a window into financial market-government relations. To what extent have the Great Recession and the European debt crisis led to a change in how markets evaluate sovereign borrowers? And what might these changes mean for governments’ capacity to act autonomously from financial markets?

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