Stormy Days on an Open Field: Asymmetries in the Global Economy

32 Pages Posted: 3 May 2007

Date Written: February 2006

Abstract

Does openness in trade and the free flow of capital promote growth for the poor? In this Working Paper, Nancy Birdsall discusses the inherent asymmetries in globalization, and the implications those inequalities have for poverty reduction. She suggests that global trading rules work less well for the people and households within poor countries. While modern capitalist and rich societies have mechanisms to manage their markets so that free trade and commerce more equally benefit all, poor countries cannot benefit from effective social contracts, progressive tax systems, and laws and regulations to manage asymmetries and market failures. This is also true at the global level, where poor countries are especially susceptible to the risks of free trade, and the vagaries of volatile capital flows.

This paper is updated from a paper presented at the 2002 G-20 Workshop on Globalization, Living Standards, and Inequality in Sydney, Australia. It is also forthcoming in a Jubilee Conference Volume of the World Institute for Development Economics Research.

Keywords: IMF, trade protection, economic growth, market economy, tariff

JEL Classification: F13, F40, O1

Suggested Citation

Birdsall, Nancy, Stormy Days on an Open Field: Asymmetries in the Global Economy (February 2006). Center for Global Development Working Paper No. 81, Available at SSRN: https://ssrn.com/abstract=984042 or http://dx.doi.org/10.2139/ssrn.984042

Nancy Birdsall (Contact Author)

Center for Global Development ( email )

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