Globalization, Infrastructure, and Inclusive Growth

21 Pages Posted: 25 Feb 2014

See all articles by L. Alan Winters

L. Alan Winters

University of Sussex; IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Date Written: February 23, 2014

Abstract

This paper covers threes issues: first, defining and measuring inclusive growth; second, the relationship between international trade and inequality; and third, the links between infrastructure and inequality. Both international trade and infrastructure make it easier for people to exchange goods and services and to increase income by allowing specialization, economies of scale, variety, etc. The gains are important not only in aggregate, but also at an individual level, and different people’s ability to take advantage of them varies. Hence each can increase inequality. Critical to sharing the gains from trade is mobility — specifically labor mobility, which determines the capacity of people to move from areas, sectors, skills, or firms of low or declining opportunity to those of higher opportunity. In the context of inclusive growth, this constitutes a challenge. However, the answer should not be to eschew opening up the economy or building infrastructure, but to do so in an informed way and seek to undertake complementary policies that help the less well-off take advantage of them.

Keywords: trade, infrastructure, inequality, labor mobility, trade opening, globalization

JEL Classification: F16, F64, H54

Suggested Citation

Winters, L. Alan Alan, Globalization, Infrastructure, and Inclusive Growth (February 23, 2014). ADBI Working Paper 464, Available at SSRN: https://ssrn.com/abstract=2400220 or http://dx.doi.org/10.2139/ssrn.2400220

L. Alan Alan Winters (Contact Author)

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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