On institutions and child labor

Social welfare was once thought to be premature ambition for a developing country. Strict budget control was prescribed by them so any sort of Social safety nets were seen as unfeasible. Now, however, the IMF has changed their minds about providing social welfare. Social Welfare institutions are not limited to safety nets as they can also provide health and education which can improve a countries production and quality of life. They also can reduce tension for the public and give legitimacy to government that can drive on in sustained investment.

Child labor was widespread when today’s rich countries were developing. It took them centuries for them to fully eradicate child labor. Since many of today’s developing countries use child labor, some see it as unfair for them to eradicate it since rich countries used it. In 19th century Britain, children were working between 12.5 to 16 hours a day. The US had widespread child labor at that time as well. Institutions to regulate child labor were met with resistance. In 1833, Britain introduced the Factory Act that covered cotton, wool, flax and silk industries. It banned employment of children under nine and limited the working hours for children between 9 and 18. These bans were, however, not very effective because institutions were not very keen on enforcing them. In fact, the first attempts to reduce child labor were in the early 18th century but it wasn’t until the late 18th century and even beyond that child labor was effectively banned.

Institutions played a large part in the development of today’s rich countries but during their development they were much less advanced than today’s developing countries’. The only thing that NDCs did better than today’s developing countries was social welfare. Starting with the 1880s, social welfare institutions saw growth and by 1913 most of today’s rich countries had accident insurance, health care and pensions. But institutions during the equivalent stages of development for today’s rich countries had inferior institutions than today’s poor countries.