Demand-Driven Enforcement of Labor Law in Bangladesh
Weak states with poor institutions often lack the capacity to implement and/or to enforce labor regulations aimed at improving working conditions. Increasingly, private actors are enforcing labor standards in these countries, but the effects of their interventions on local firms and workers is unknown. This research partners with a set of multinational retail and apparel firms to enforce local labor laws on their suppliers in Bangladesh. Specifically, I design and implement a randomized controlled trial with Bangladeshi garment factories, randomly introducing worker-manager safety committees in supplier establishments. I measure the impacts of this intervention on factories’ compliance levels and productivity as well as on workers’ welfare. I also explore the intervention’s broader effect on equilibrium compliance levels in the sector.