Layna Mosley, Ph.D.
mmosley@princeton.edu
Full Professor
Princeton University
About Me:
Layna Mosley is Professor in the School of Public and International Affairs and in the Department of Politics at Princeton University. Mosley's research and teaching focus on the politics of the global economy. Her ongoing research projects address sovereign borrowing and debt (including sovereign bond issuance, debt management offices, and how governments choose among various types of creditors), as well as the link between global supply chains and labor rights in developing countries. Mosley also is interested in the economic and cultural determinants of the anti-globalization backlash in rich democracies, as well as the link between trade agreements and worker rights. .Mosley is author of Global Capital and National Governments (Cambridge University Press 2003) and Labor Rights and Multinational Production (Cambridge University Press 2011). Mosley also is editor of Interview Research in Political Science (Cornell University Press 2013). Mosley's recent commentary on trade, labor rights and sovereign borrowing can be found here.
Research Interests
Political Economy
Human Rights
International Law & Organization
Development
Global Finance
Trade Agreements
Sovereign Debt
Worker Rights
Multinational Corporations
Foreign Direct Investment
International Political Economy
Interview Research Methods
Debt Management
Sovereign Debt Restructuring
Politics Of Globalization
Countries of Interest
United States
Vietnam
Germany
Bangladesh
Zambia
My Research:
My research examines the politics of the global economy. Broadly, I am interested in how governments borrow money to finance their activities; how investors evaluate the risks associated with lending to governments; how multinational production and global supply chains influence worker rights; and the conditions under which private sector-based efforts to improve labor rights are successful.My work on government borrowing includes an analysis of how governments choose among potential creditors (including commercial banks, sovereign bondholders, international financial institutions like the World Bank, and bilateral official creditors). With the category of sovereign bonds, I consider how domestic political features -- democracy, government ideology, elections -- affect governments' demands for borrowing and investors' willingness to supply credit. My ongoing research in this area also examines the role of government debt management offices (DMOs) as well as the tradeoffs governments make regarding the terms (interest rates, maturity, currency of issue) at which they borrow. In the area of labor rights, I am interested in when global supply chain participation provides incentives for labor-related upgrading. My initial work on this area focused on the differing effects of foreign direct investment and subcontracting on workers' right to organize, bargain collectively and strike. More recently, I consider how firms' willingness to protect workers varies with the availability of markups; with the destination of their exports; and with the attention of labor activists to worker rights issues. Related work considers the effects of unilateral trade preference programs (GSP) and preferential trade agreements (PTAs) on labor rights. I've also been involved in the analysis of data related to private sector initatives in the apparel sector in Bangladesh.In other work in progress, I investigate the determinants of the anti-globalization backlash in developed countries, with a focus on how attitudes toward economic openness are affected by local economic conditions, as well as occupational characteristics.
Publications:
Journal Articles:
Governments interact strategically with sovereign bond market creditors: they make choices not only about how often and how much to borrow, but also under what terms. The denomination of debt, in domestic or foreign currency, is a critical part of these terms. The “original sin” logic has long predicted that creditors have little appetite for developing country government debt issued in domestic currency. Our novel data, including bond issues by 131 countries in 240,000 primary market transactions between 1990 and 2016, suggest otherwise. Domesticdenominated bonds have come to dominate the market, although domestic currency issuance often is accompanied by shorter bond maturities. We argue that ideologically-rooted policy preferences play an important role within this unexpected trend in denomination. All else equal, right governments choose foreign denomination as a means of mitigating currency risk and thus minimizing borrowing costs. In contrast, left governments opt for the flexibility of domestic denomination, and they are better able to act on their preferences in the presence of risk-mitigating monetary institutions and macroeconomic stability. We find support for our argument that partisanship has a robust and enduring relationship with denomination outcomes, even in a marketplace in which domestic-denominated developing country sovereign bonds have become the norm.
How do domestic and global factors shape governments’ capacity to issue debt in primary capital markets? Consistent with the ‘democratic advantage’, we identify domestic institutional mechanisms, including executive constraints and policy transparency, that facilitate debt issuance rather than electoral events. Most importantly, we argue that the democratic advantage is contingent: investors’ attention to domestic politics varies with conditions in global capital markets. When global financial liquidity is low, investors are risk-averse, and political risk constrains governments’ capacity to borrow. But when global markets are flush, investors are risk-tolerant and less sensitive to political risk. We support our argument with new data on 245,000 government bond issues in primary capital markets – the point at which governments’ costs of market access matter most – for 131 sovereign issuers (1990–2016). In doing so, we highlight the role of systemic factors, which are under-appreciated in much ‘open economy politics’ research, in determining access to capital markets.
Under what conditions does the global economy serve as a means for the diffusion of labor standards and practices? We anticipate variation among internationally engaged firms in their propensity to improve labor standards. Upgrading is most likely when a firm’s products exhibit significant cross-market differences in markups, making accessing high-standards overseas markets particularly profitable. Additionally, upgrading is more likely when lead firms attach a high salience to labor standards. Therefore, while participation in global production induces “trading up” behaviors among firms overall, the effect strength varies across industries. We test our expectations via a survey experiment, which queries foreign firms operating in Vietnam about their willingness to invest in labor-related upgrading. We find strong evidence for the effect of markups on upgrading choices and suggestive evidence for the saliency mechanism.
A growing number of developed country governments link good governance, including human rights, to developing countries’ access to aid, trade, and investment. We consider whether governments enforce these conditions sincerely, in response to rights violations, or whether such conditions might instead be used as a veil for protectionist policies, motivated by domestic concerns about import competition. We do so via an examination of the world’s most important unilateral trade pre- ference program, the US Generalized System of Preferences (GSP), which includes worker rights as one criterion for program access. We argue that the two-tiered structure of the GSP privileges some domestic interests at one level, while dis- advantaging them at the other. Using a new data set on all US GSP beneficiary countries and sanctioning measures from 1986 to 2013, we demonstrate that labor rights outcomes play a role in the maintenance of country-level trade benefits and that import competition does not condition the application of rights-based criteria at this level. At the same, however, the US government does not consider worker rights in the elements (at the country-product level) of the program that have the greatest material impact. The result is a situation in which the US government talks somewhat sincerely at the country level in its rights-based conditionality, but that its behavior at the country-product level cheapens this talk.
What does current scholarship suggest about the relationship between the rights of workers in the developing world and the global economy? Contemporary multinational production includes both direct ownership of manufacturing facilities abroad and arm’s length subcontracting and supply chain relationships. Thus far, political economists have paid greater attention to the former; there are various reasons to expect that multinational firms may have positive, rather than negative, effects on workers’ rights. For instance, some multinationals are interested in hiring at the top end of local labor markets, and high standards serve as a tool for recruitment and retention. Multinationals also could bring “best practices” from their home countries to their local hosts, and some face pressure from shareholders and consumers—given their visibility in their home locations—to act in “socially responsible” ways. Hence, while directly owned production does not automatically lead to the upgrading of labor standards, it can do so under some conditions. Supply chain production is likely more mixed in its consequences for workers. Such production involves arm’s length, subcontracted production, in which multiple potential suppliers typically compete to attract business from lead firms. Such production often includes more labor-intensive activities; minimizing costs (including labor costs) and lowering production times can be key to winning subcontracts. We may therefore expect that subcontracted production is associated with greater violations of labor rights. It is worth noting, however, that research regarding the consequences of supply chain production—and the conditions under which such production may lead to improvements for workers—is less advanced than scholarship related to foreign direct investment. The governance of labor rights in a supply chain framework is marked by several challenges. It is often difficult for lead firms, even those that wish to protect worker rights, to effectively monitor compliance in their subcontractor facilities. This becomes more difficult as the length and breadth of supply chains grow; private governance and corporate social responsibility have therefore not always lived up to their promise. Rather, achieving labor protections in a supply chain framework often requires both private and public sector efforts—that is, governments that are willing to privilege the rights of workers over the rights of local factory owners and governments that are willing to enact and implement legal protections of core labor rights. Such government actions, when coupled with private sector–based capacity building, codes of conduct, and regular monitoring, offer the most promise for protecting labor rights within global supply chains. Finally, governments of developed countries also may play a role, if they are willing to credibly link working conditions abroad with market access at home.
I consider the effect of global supply chain production – in contrast to directly owned overseas production – for labour rights in low- and middle-income countries. I develop a set of hypotheses regarding the conditions under which supply chain workers are most likely to experience improvements in their working conditions and procedural rights. In doing so, I highlight the importance of host country governments in the protection of labour rights: while private governance efforts have intensified in recent years, their success is conditional on local political actors’ interests in the protection of workers’ rights. Put differently, appropriate protections for labour require that the incentives of participating firms (foreign or domestic) and host country governments align. I also suggest how future research might best explore these dynamics, by focusing its attention at the firm and supply chain (rather than at the country) level.
We assess how investors evaluate sovereign borrowers, arguing that sovereign risk is less “sovereign” than previous research assumes. Investors evaluate governments based not only on what they do, but also on investors' views of similar, “peer” countries. Professional investors use investment categorizations (geography, sovereign credit rating, or level of market development) as a heuristic device. As a result, peer country effects, as well as country-specific and global factors (booms, crises, or shocks), should explain sovereign interest rates. The peer effects we expect are regular features of international capital markets, rather than phenomena that occur in periods of market turmoil. We assess our expectations using error correction models of monthly sovereign risk premiums, which reveal significant interdependencies in sovereign risk assessments among countries, net of global and domestic predictors. Such contagion emerges principally in the short term, although we also find robust, long-term ties in sovereign risk assessments among countries sharing common regional classifications. Hence, our evidence suggests that professional investors' reliance on country categorizations facilitates the transmission of market sentiments—which include lower as well as higher risk premiums charged—across groups of countries, even when countries differ in key measures of creditworthiness. Our analyses highlight the importance of investors' ideas regarding country categorizations; they call into question the efficiency of sovereign debt markets.
This article investigates the nature of the linkages between trade and labor rights in developing countries. Specifically, we hypothesize that a “California effect” serves to transmit superior labor standards from importing to exporting countries, in a manner similar to the transmission of environmental standards. We maintain that, all else being equal, the labor standards of a given country are influenced not by its overall level of trade openness, but by the labor standards of its trading partners. We evaluate our hypothesis using a panel of 90 developing countries over the period 1986–2002, and we separately examine the extent to which the labor laws and the actual labor practices of the countries are influenced by those of their export destinations. We find that strong legal protections of collective labor rights in a country's export destinations are associated with more stringent labor laws in the exporting country. This California effect finding is, however, weaker in the context of labor rights practices, highlighting the importance of distinguishing between formal legislation and actual implementation of labor rights.
Books Written:
Labor Rights and Multinational Production investigates the relationship between workers' rights and multinational production. Mosley argues that some types of multinational production, embodied in directly owned foreign investment, positively affect labor rights. But other types of international production, particularly subcontracting, can engender competitive races to the bottom in labor rights. To test these claims, Mosley presents newly generated measures of collective labor rights, covering a wide range of low- and middle-income nations for the 1985–2002 period. Labor Rights and Multinational Production suggests that the consequences of economic openness for developing countries are highly dependent on foreign firms' modes of entry and, more generally, on the precise way in which each developing country engages the global economy. The book contributes to academic literature in comparative and international political economy, and to public policy debates regarding the effects of globalization.
Global Capital and National Governments investigates the implications of international financial integration for government policy choices. Capital market openness allows participants to react swiftly and severely to government policy; but in the developed world, capital market participants consider only a few government policies when making decisions. Governments that conform to capital market pressures in macroeconomic areas remain relatively unconstrained in supply-side and micro-economic policy areas. Therefore, despite financial globalization, cross-national policy divergence among advanced democracies remains likely. Still, in the developing world, the influence of financial markets on government policy autonomy is more pronounced. The risk of default renders market participants willing to consider a range of government policies in investment decisions. This inference, however, must be tempered with awareness that governments retain choice. As evidence for its conclusions, Global Capital and National Governments draws on interviews with fund managers, quantitative analyses, and archival investment banking materials.
Media Appearances:
Radio Appearances:
Appearance in story, "'Buy American' is a Common Presidential Promise. Why Is it So Hard to Do?"
Blog Posts:
"On their Own Terms? Sovereign Debt Choices in Developing Countries"
“Global Supply Chains and Labor Rights: Any Reasons for Optimism?” May 9, 2017.
“If Trump Restricts Skilled Immigrants, the U.S. Could Lose Jobs to Other Countries” (with David A. Singer). March 22, 2017.
“This is What Will Happen if Financial Markets Panic about Trump” (with Cameron Ballard-Rosa and Rachel Wellhausen). March 2, 2017.
"What an 'America First' Trade Strategy Gets Wrong." January 27, 2017
Other:
Part of the series “Viewpoints on Resilient and Equitable Responses to the Pandemic” from the Center for Urban and Regional Studies at The University of North Carolina at Chapel Hill. The COVID-19 pandemic is causing people around the world to question how this virus will affect the many public and private systems that we all use. We hope this collection of viewpoints will elevate the visibility of creative state and local solutions to the underlying equity and resilience challenges that COVID-19 is highlighting and exacerbating. To do this we have asked experts at UNC to discuss effective and equitable responses to the pandemic on subjects ranging from low-wage hospitality work, retooling manufacturing processes, supply chain complications, housing, transportation, the environment, and food security, among others.
“Zambia’s Looming Default is Only the Start of a Global Reckoning with Debt.” October 29, 2020.
Trump's Tariffs Would Hurt NC Businesses
"Still Afraid of Footloose Finance? Exit and Voice in Contemporary Globalization."
Op-Ed: “‘America First’ Will Set Back U.S. and NC Economies.” February 4, 2017.