Teitelbaum
Partners in Production or Crime?
2
Partners in Production or Partners in Crime?
Unions, Political Parties and Industrial Conflict in South Asia
1. Introduction
An important question for developing countries is whether labor unions help or hinder
economic development. What little has been written on the relationship between union behavior
and economic development in South Asia a) fails to distinguish between unions affiliated to
major parties (politically incorporated unions) and unincorporated unions and b) fails to grasp
the importance of extreme and violent protest behavior for economic outcomes. This paper aims
to overcome these deficits by examining how violent forms of protest affect economic
development and by providing a political explanation of why some unions resort to militant
protest behavior instead of relying on moderate levels of routine protest and institutionalized
forms of grievance resolution to pursue their demands.
Union leaders have incentives to encourage violence among union members. Violence
brings greater notoriety and therefore attracts a bigger union membership. Union leaders also
use violence to force bribe payments from managers. Violence and corruption are
counterproductive to development. Violence causes major disruptions in production, factory
closures, and discourages investment by creating a perception of instability and disorder while
corruption diminishes the size of wage settlements and therefore the incomes of workers.
On the other hand, unions that rely on collective bargaining and other forms of
institutionalized grievance resolution to achieve their ends can aid economic development.
These unions can create social and economic stability by meeting the needs of workers through
non-violent channels. Non-violent unions can also aid productivity by signing productivity-
linked wage agreements.
Convention