Disney is moving the production of its licensed apparel out of countries with bad scores on World Bank Governance Ratings!
“Disney said in its letter to licensees that it would pursue “a responsible transition that mitigates the impact to affected workers and business.” It set out a yearlong transitional period for its contractors to phase out production in Bangladesh, Pakistan, Belarus, Ecuador and Venezuela by March 31, 2014.
In that letter, Josh Silverman, executive vice president for global licensing for Disney Consumer Products, wrote that because Disney did not do manufacturing itself and licensed its brand for so many goods produced in so many countries, “we must rely more heavily upon our licensees and vendors to help ensure working conditions that are consistent with Disney’s standards.”
In deciding in which countries to permit production, the company relied heavily on the World Bank’s Governing Indicators, which evaluate performance on issues like government effectiveness, rule of law, accountability and control of corruption. Disney decided to prohibit production in several dozen countries that had a combined low score on the World Bank indicators.”
I actually like this move quite a bit. There is a school of thought that says aid only “works” in countries with good governance, and a push to restrict aid to badly governed countries.
If more big companies also did this, then there would be even more pressure for reform in the pariah states.
Hat tip to Bill Easterly (who does not necessarily think aid works in countries with good policies).