Trade, Social Insurance, and the Limits to Globalization
36 Pages Posted: 11 Jun 2000 Last revised: 5 Oct 2010
Date Written: January 1997
International economic integration increases exposure to external risk and intensifies domestic demands for social insurance through government programs. But international economic integration also reduces the ability of governments to respond to such pressure by rendering the tax base footloose. With globalization proceeding apace, the social consensus required to maintain domestic markets open to trade may erode to the point where a return to protection becomes a serious possibility.
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