A/HRC/34/57 wisdom, labour legislation, in particular employment protection legislation, is a main obstacle to economic growth and employment. In this regard, the Organization for Economic Cooperation and Development (OECD), IMF and the World Bank have advocated that high labour protection standards are a driver of unemployment, among others, and should be scaled down.61 43. Those views have, however, been challenged on a number of fronts. Scholars have identified a number of functions of labour law that render the economy efficient rather than encumbering it. Among others, labour laws further economic coordination at both the company and market levels. 62 In addition, laws regarding minimum wages or protection against dismissal tend to incentivize employers to utilize their workforce in an efficient manner, invest in technology and strive to improve their organization. Labour standards also contribute to stabilizing demand during recession. In this regard, the role of labour legislation in correcting market failures is frequently acknowledged. 63 44. Furthermore, a body of empirical literature has emerged that suggest that the effects of labour standards on the economy are, by far, less problematic than conventional wisdom would have believe. The only robust finding in the literature on the economic effects of labour standards appears to be its positive effect on income distribution. By contrast, “despite considerable effort, researchers have not pinned down the effects, if any, of [labour market] institutions on other aggregate economic outcomes, such as unemployment and employment”.64 Notably, in an analysis of data on 20 OECD countries, no association was found between weaker labour market institutions and reduced unemployment, while coordinated collective bargaining was found to be related to lower unemployment. 65 A recent study that analysed data from OECD countries and 10 new market economies in Central and Eastern Europe, over three decades, arrived at similar conclusions. 66 Moreover, it was found that “employment protection, benefit replacement rates and tax wedge do not seem to have a significant impact on unemployment”. 67 Another study found “no consistent relationship, either negative or positive, between labour laws in general and unemployment 61 62 63 64 65 66 67 See OECD, “The OECD Jobs Study. Evidence and Explanations. Part I – Labour Market Trends and Underlying Forces of Changes” (Paris, 1994), p. 69; IMF, World Economic Outlook: Growth and Institutions (Washington D.C., 2003), pp. 137-138 and 141-142; World Bank, Doing Business (Washington D.C., 2007), p. 19. Simon Deakin, “Labour law and development in the long run”, in Shelley Marshall and Colin Fenwick, eds., Labour Regulation and Development. Socio-Legal Perspectives (Cheltenham, Edward Elgar, forthcoming), p. 41. See for example, Alan Hyde, “What is labour law?”, in Guy Davidov and Brian Langille, eds., Boundaries and Frontiers of Labour Law: Goals and Means in the Regulation of Work (Oxford and Portland, Oregon, Hart Publishing, 2006), pp. 54-60.. Richard B. Freeman, “Labor market institutions around the world”, in Paul Blyton and others, eds., The SAGE Handbook of Industrial Relations (Los Angeles, SAGE, 2008), p. 652. See Dean Baker and others, “Labor market institutions and unemployment: assessment of the crosscountry evidence”, in David Howell, ed., Fighting Unemployment: The Limits of Free Market Orthodoxy (Oxford, Oxford University Press, 2005), p. 109. Sabina Avdagic and Paola Salardi, “Tenuous link: labour market institutions and unemployment in advanced and new market economies”, Socio-Economic Review, vol. 11, No. 4 (2013), p. 765. Lucio Baccaro and Diego Rei, “Institutional determinants of unemployment in OECD countries: does the deregulatory view hold water?”, International Organization, vol. 61 (2007), pp. 528 and 563. 15