The Clothing Curse: Institutional Causes And Political Consequences Of Clothing Export Dependence In Developing Countries
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Date
2022-05-10
Authors
Rahman, Mohammad Shafiqur
Journal Title
Journal ISSN
Volume Title
Publisher
University of Oregon
Abstract
Readymade garments (RMG) or clothing industry is the most important manufacturing export for poor and developing countries. Low capital requirement, high labor intensity and simple technology make the industry a natural starting base for internationally competitive manufacturing. In the last seventy years of growth in RMG exports, many formerly underdeveloped countries embarked on manufacturing export-led economic development with a start in RMG exports. These countries rapidly expanded and diversified their manufacturing sectors and climbed up the ladder of economic development. However, in recent decades, some of the leading clothing exporting countries seem to be stuck in long-term concentration in clothing exports without expected diversification and upgrading in industries. These clothing export-dependent countries also witnessed increasing authoritarianism in their ruling political regimes. This dissertation seeks to explain these phenomena in political economy of developing countries with theoretical arguments, cross-country empirical analysis and case studies. The main argument of the paper has three basic parts. First, distinctive sectoral characteristics of the RMG export industry make the sector a less suitable launching pad for industrial upgrading and diversification. Second, if a developing country where RMG export industry has become established, lacks state capacity to implement industrial policy, then the country is likely to fall into extended dependence on RMG export. Third, extended apparel export dependency changes the distribution of power among political and economic elites to the extent that democracy reversal by incumbent takeover becomes more likely.
Although the dissertation focuses on RMG industry, the building blocks of the arguments are generalizable to characteristics of all mainstream manufacturing and service export sectors, and institutional quality in developing countries. Thus, the arguments and explanations have extensive ramifications in political economy of development for poor countries.
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Keywords
Apparel, Democracy, Economic development, Industry, International trade, Labor