Fair Trade: A 'Third Generation' Welfare Mechanism to Make Globalisation Sustainable

Fabrizio Adriani and Leonardo Becchetti

CEIS Research Paper from Tor Vergata University, CEIS

Abstract: Globalisation of product and labour markets has dramatically evidenced the market failure generated by the monopsonistic/oligopsonistic power of exporters dealing with unskilled workers (subcontractors). The absence of a global benevolent planner and unequal representation mechanisms in international institutions prevent the reduction of imbalances in the bargaining power between employers and unskilled workers. In a model of North-South trade we suggest that, under the existence of a share of altruistic consumers in the North, the effects of market imperfections and the absence of a global benevolent planner may be partially alleviated by a bottom-up welfare approach directly promoted by consumers of the final product. Our results also show that ethical concerns of consumers in the North might end up with reducing the welfare of workers in the South unless ethical concerned producers enter the market.

Keywords: monopsony; social responsibility; fairness (search for similar items in EconPapers)
JEL-codes: F02 F13 L31 (search for similar items in EconPapers)
Pages: 31
Date: 2004-11-26
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
https://ceistorvergata.it/RePEc/rpaper/No-62-Becchetti-Adriani.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rtv:ceisrp:62

Ordering information: This working paper can be ordered from
CEIS - Centre for Economic and International Studies - Faculty of Economics - University of Rome "Tor Vergata" - Via Columbia, 2 00133 Roma
https://ceistorvergata.it

Access Statistics for this paper

More papers in CEIS Research Paper from Tor Vergata University, CEIS CEIS - Centre for Economic and International Studies - Faculty of Economics - University of Rome "Tor Vergata" - Via Columbia, 2 00133 Roma. Contact information at EDIRC.
Bibliographic data for series maintained by Barbara Piazzi ().