International management: An institutional perspective
International management: An institutional perspective

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International management: An institutional perspective

Labour regulation

We can rank a larger range of countries on level of labour regulation on the basis of data put together by Juan Botero and colleagues (2004). They compiled indices for 85 countries looking at the extent to which legal frameworks in each country exist to regulate employment law and laws underpinning worker rights to collective representation (for example by unions or works’ councils). Table 3 below compares the countries on these two indices. We have used the average of the two indices to rank countries on the extent of labour regulation. The table arranges countries from least to most regulated.

Table 3 Countries ranked by level of labour regulation

CountryEmployment laws indexCollective relations laws index

Rank

(1= least regulated)

Malaysia0.190.191
Jamaica0.160.232
Nigeria0.190.213
New Zealand0.160.254
Malawi0.180.255
Zambia0.150.296
Canada0.260.207
United Kingdom0.280.198
United States0.220.269
Mongolia0.330.2310
Kenya0.370.2311
Israel0.290.3112
Hong Kong0.170.4613
Uruguay0.280.3514
Pakistan0.340.3115
Singapore0.310.3416
Zimbabwe0.250.4417
Australia0.350.3718
Uganda0.350.3819
Morocco0.260.4920
China0.430.3321
Thailand0.410.3622
Taiwan0.450.3223
Ghana0.290.4824
Egypt0.370.4125
Japan0.160.6326
Ireland0.340.4627
India0.440.3828
Colombia0.340.4929
Bolivia0.370.4630
Chile0.470.3831
Czech Republic0.520.3432
Austria0.500.3633
South Africa0.320.5434
Dominican Republic0.600.2735
Switzerland0.450.4236
Turkey0.400.4737
Romania0.330.5638
Lebanon0.500.4139
Argentina0.340.5840
Belgium0.510.4241
Madagascar0.470.4642
Croatia0.490.4543
Brazil0.570.3844
Bulgaria0.520.4445
Burkina Faso0.440.5346
Sri Lanka0.470.5147
Hungary0.380.6148
Korea0.450.5449
Philippines0.480.5150
Denmark0.570.4251
Greece0.520.4952
Tanzania0.680.3253
Vietnam0.540.4854
Ecuador0.400.6455
Finland0.740.3256
Mali0.670.3957
Indonesia0.680.3958
Jordan0.700.3859
Panama0.620.4660
Senegal0.510.5761
Slovak Republic0.660.4562
Armenia0.600.5263
Lithuania0.620.5064
Mexico0.590.5865
Peru0.460.7166
Venezuela0.650.5467
Netherlands0.730.4668
Tunisia0.820.3869
Poland0.640.5770
Kyrgyz republic0.750.4671
Slovenia0.740.4972
Ukraine0.660.5873
Latvia0.720.5374
Sweden0.740.5475
Italy0.650.6376
Germany0.700.6177
Spain0.740.5978
Norway0.690.6579
Georgia0.770.5780
Mozambique0.790.5881
Russian Federation0.830.5882
France0.740.6783
Portugal0.810.6584
Kazakhstan0.780.6885

It is important to note that the varieties of capitalism approach does not argue that either lower regulation or greater regulation are better. Rather writers such as Hall and Soskice (2001) argue that what matters is the way institutions combine to greater comparative national advantage. For example, both Germany and the USA show strong economic performance but have very different levels of labour regulation.

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