Does monitoring improve labor standards? Lessons from Nike

Using a unique data set based on factory audits of working conditions in over 800 of Nike’s suppliers across 51 countries over the years 1998–2005, the authors explore whether monitoring for compliance with corporate codes of conduct—currently the principal way both global corporations and labor rights non-governmental organizations (NGOs) address poor working conditions in global supply chain factories—achieved remediation, as indicated by improved working conditions and stepped-up enforcement of labor rights. Despite substantial efforts and investments by Nike and its staff to improve working conditions among its suppliers, monitoring alone appears to have produced only limited results. However, when monitoring efforts were combined with other interventions focused on tackling some of the root causes of poor working conditions— in particular, by enabling suppliers to better schedule their work and to improve quality and efficiency—working conditions seem to have improved considerably.