"Can workers' rights and social protections be reconciled with firms' competitiveness and productivity? In contrast to current development policy advice, which emphasizes the "flexibilization" of labour laws, this article contributes to an ongoing debate about styles of inspection by exploring the causal links between different regulatory practices and economic development and compliance outcomes. Findings from subnational comparisons in Brazil challenge established theories about the behaviours of firms and regulatory agencies, and indicate that labour inspectors have been able to promote sustainable compliance (legal and technical solutions linking up workers' rights with firms' performance) by combining punitive and pedagogical inspection practices."

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