WEBINAR RECORDING · 2022-12
Responsible Sourcing? Theory & Evidence from Costa Rica
In this conversation: Isabela Manelici; discussant Sara Schoenfeld; moderators Ben Shepherd and Hanna Norberg.
Isabela Manelici finds that responsible-sourcing requirements improve pay for targeted workers while creating costs elsewhere in Costa Rica’s economy. Sara Schoenfeld’s questions turn the analysis toward who finances compliance, supplier support, and what ethical claims can establish.
Session information draws on the recording and its original description. Affiliations and policy context refer to the time of the webinar.
FROM THE CONVERSATION
Three takeaways.
What they mean in practice.
Prepared from the session recording using automatic transcription and editorial review. Follow the timestamp links for the original wording and context.
Supplier codes have effects and tradeoffs
Watch 27:25 ↗Using linked Costa Rican firm, worker, and transaction records, Manelici studies suppliers exposed to multinational buyers’ rollouts. Suppliers shrink, while lower-paid workers receive wage gains and the workforce becomes more skill intensive. Broken buyer-supplier relationships explain much of the decline in sales to the multinational introducing the code.
Policy interpretation: Track employment, supplier exits, and continuing workers’ conditions together; gains among remaining workers do not establish universal benefits.
Economy-wide effects differ from gains inside the chain
Watch 34:19 ↗The model links supplier responses to wages and domestic prices. Its Costa Rican quantification finds gains for exposed low-wage workers but losses for low-wage workers outside those chains. Cost increases affect domestic sales as well as exports, while relative labor demand shifts toward higher skills.
Policy interpretation: Evaluate spillovers beyond monitored suppliers and distinguish measured firm responses from model-based welfare results.
Who pays for compliance is central
Watch 48:44 ↗Responding to Schoenfeld, Manelici emphasizes that safer conditions, benefits, and higher pay require resources. Estimates imply incomplete pass-through of supplier costs to multinational buyers. Stronger buyer contributions or productivity-enhancing support could improve outcomes; imposing standards does not determine fair cost distribution.
Policy interpretation: Align purchasing terms and support with requirements, monitoring whether improvement is financed through squeezed suppliers or displaced workers.
From the discussion
At 51:24, Manelici explains that a small immediate demand response does not prove altruistic motivation: reputational insurance may pay off later. At 57:56–60:04, Shepherd identifies labor-market structure, pass-through, and domestic spillovers as reasons countries may differ. Schoenfeld adds at 63:29–64:19 that buyers can offer nonfinancial support and share compliance burdens across multinational customers. These are design questions, not a case for abandoning responsible sourcing.
