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Part I of the book explored differences in how workers in the organized industrial sector respond to increased exposure to market forces. It argued that democracy helps to explain why some workers continue to engage in routine protest and institutionalized grievance resolution despite declining bargaining power, while others engage in more militant protest to achieve their demands. This section of the book tests this argument in three ways. In chapter 4, I look at the relationship between political competition and industrial protest. I use state-level data to test the argument that more competitive party systems, elections, and higher levels of voter turnout help to reduce worker protest. I then draw on original firm-level survey data to demonstrate the primary mechanism linking political competition with better industrial relations outcomes—union-party ties. In chapter 5, I turn to the relationship between labor legislation and economic performance in the Indian states. If the arguments about state-labor relations advanced in chapter 3 are correct, then legislation that facilitates third-party mediation and worker voice should produce better economic performance, whereas legislation that violates FACB rights should produce worse outcomes. Finally, in chapter 6, I illustrate my argument about the corrosive effects of labor repression through an examination of state-labor relations in Sri Lanka. In an historical and a quantitative framework, I show how the United National Party’s repressive stance towards unions in the 1980s led to worse industrial relations and economic outcomes in the two decades that followed.
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