Teitelbaum
Partners in Production or Crime?
3
The central argument of this paper is that leaders of unions with affiliations to major
political parties aid economic development by channeling worker grievances through
institutionalized forms of grievance resolution and eschewing violence and corruption. This is
because major political parties have an interest in social stability, economic growth, and the vote
of a satisfied working class. They therefore discourage the violent and corrupt behavior of
individual union leaders and encourage settlements that benefit workers and promote economic
and social stability.
In South Asia, a partial institutionalization of worker protest has resulted from economic
liberalization and reform. Domestic and global competitive pressures on industry have made it
difficult for unions to use aggressive tactics without seriously jeopardizing the existence of union
jobs. Large incorporated unions have responded to these pressures by limiting the use of
violence while explaining to workers the precarious economic position of the employer and the
need to help industry survive. Small, politically independent unions, on the other hand, have
pursued a “go for broke” strategy, blaming employers for the poor economic position of the firm
and ratcheting up anger and violence against the management.
In the following section, I review the debate over the effects of unions on economic
development and suggest how the political economy of labor of advanced industrial countries
provides fresh insights to this debate. The third section develops a game theoretic model that
provides a micro-level explanation of how political affiliations increase the likelihood of
institutionalized grievance resolution and reduce the likelihood of violence. Section four
presents statistical models to support the conclusions derived from the game-theoretic model.
The statistical models are based on original data from telephone surveys and interviews of
Convention