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Giving people more control over their labour and the money it generates can both reduce slavery and spur significant economic growth
Professor James Cockayne is a Senior Fellow at the United Nations University Centre for Policy Research, and lead author of Developing Freedom: The Sustainable Development Case for Ending Modern Slavery, Forced Labour and Human Trafficking.
Two years ago, the UK government posed a deceptively simple question to the team I led at United Nations University Centre for Policy Research: How can fighting slavery contribute to sustainable development?
Answering that question took us on a complex journey – and led to surprising insights into how we can boost post-pandemic growth.
Our research journey took us from the theorizing of Adam Smith and Amartya Sen to the empirical insights of Nicola Phillips and Genevieve Le Baron. We studied the activities of lenders from the World Bank to the China Development Bank and surveyed officials from over 16 countries.
We crunched over 2 million official aid project records and 396 United Nations country development strategies. And we undertook deep dives on six global value chains, from cattle to construction and apparel to palm oil.
Our results – published last week in Developing Freedom: The Sustainable Development Case for Ending Modern Slavery, Forced Labour and Human Trafficking – surprised us with both their simplicity and their significance for pandemic recovery.
We discovered that interventions focused on protecting people’s economic agency – their control over their own labour and what they do with the money they earn from it – can both reduce slavery and unleash significant social development and economic growth.
In Uzbekistan, labour market reforms undertaken by the government with the support of the ILO and foreign donors have reduced forced labour cases in the cotton harvest by over 77 per cent in five years. This translates to over 300,000 cases of forced labour prevented annually. In the process, Uzbekistan’s moribund cotton industry is seeing a rebirth and renewed growth.
In Brazil, government investment has made the cattle industry a global leader, while also developing powerful new tools for identifying, disrupting and preventing slavery. Over 55,000 Brazilians have been rescued from slavery-like conditions since 1995, one third of them in the livestock sector.
In Qatar, cooperation between the government and the ILO has led to significant labour market reforms, increasing worker voice and protections, and reducing forced labour risks in the construction industry ahead of the 2022 FIFA World Cup.
It even turns out the development boost that comes from tackling slavery is measurable. IMF researchers have estimated that ending child marriage, just one aspect of modern slavery, unlocks around 1.05 per cent GDP growth. Another estimate suggests ending all modern slavery would likely unlock around 3 to 5 per cent GDP growth.
What is going on here?
These win-wins result from a simple but profound shift in how we understand the modern slavery that affects 40 million people worldwide, according to the ILO. They point to the fact that those who have been enslaved lack the basic economic agency that most economic and development theory assume all people enjoy. They do not control their own labour or what happens to the money it generates.
We found that interventions giving people back their economic agency ripple out through the economy, removing 10 different drags on development. They boost overall wages and productivity, encourage innovation, reduce corruption, and strengthen environmental outcomes.
And these interventions seem to be replicable, because they follow a common pattern.
First, they address the institutional environment in which people live and work. This includes both the local norms and social structures, and the global trade and investment regimes that shape global value-chains.
Second, they empower vulnerable people to resist exploitation. The best way to address people’s lost agency is often simply to help them take their own agency back.
Third, they alter the incentive structures that shape exploiter strategies. That can involve changing formal market regulation, but also often involves tackling informal arrangements – especially the protection traffickers receive from corrupt officials.
Such significant economic transformations are routinely – and often violently – resisted. We also found that an intervention’s success becomes more likely when there is some external shock that offers a new path to transformation.
This is where the pandemic comes in.
COVID-19 has revealed that our social and economic well-being depends on resilient supply-chains. That has fostered a surge of capital towards socially responsible lending and investment, and towards companies that look after workers.
And in responding to the pandemic, governments have taken big, active positions in their own economies, through lending and ownership stakes. This gives them increased influence over business conduct.
Post-pandemic recovery thus offers a unique opportunity for adopting development strategies that simultaneously boost growth and reduce vulnerability to slavery. In the final part of Developing Freedom, we explain what that might look like, and how governments and business can use supply-chain management, development finance, and strategic coordination to promote economic agency.
Fighting modern slavery, it turns out, is not just the right thing to do; it’s also the smart thing to do. By protecting and maximizing everyone’s economic agency, we will all end up better off.
