Foreign direct investment (FDI) has grown far more rapidly than trade during the last two decades. As with the other prominent features of globalisation, FDI is controversial. The impact of FDI on labour markets has been of growing concern, particularly, for source countries. The deterioration...

pt. 1. Introduction -- pt. 2. Globalization and the prospects for integration -- pt. 3. Macroeconomic coordination and financial market integration -- pt. 4. Globalization, immigration and labor market issues

We study the political economy of labour market policies. First, it is shown that tax and redistributive considerations lead inside workers to prefer spending on active labour market programmes to passive spending, e.g., on unemployment benefits. We also show that greater active spending may be...