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Development economics
Sundaram, Jomo K.
Sundaram, Jomo K.
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Abstract
"Meanwhile, however, the protests at Seattle and since have continued to remind the world that all is not well with liberalization, with its international manifestation in the form of globalization. It is therefore useful to begin our reconsideration of development economics by the some issues exacerbated by the current phase of globalization. It seems necessary to begin with two rather obvious points. First, globalization is not inevitable. Second, globalization means different things to different people, like the proverbial elephant and the blind men. At least five aspects of economic globalization pose serious challenges to the developing world, so much so that many in the South now think of globalization as inimical to development. These aspects include: 1) international trade; 2) foreign direct investment (FDI); 3) international finance; 4) strengthened intellectual property rights and technological access; 5) the new institutional economic governance. International Trade Although there is more controversy around international trade theory than commonly acknowledged, it seems likely that there are potential gains from trade due to international specialization, and that much existing protection is more burdensome than advantageous. Nevertheless, however, advocates of trade liberalization need to consider so-called transitional costs (e.g. employment and income losses due to trade liberalization, including the destruction of existing industries, jobs, etc.) and that there is no guarantee that better new jobs will replace lost jobs. Besides such theoretical objections, experience reminds us that the consequences of trade liberalization are generally far more severe than in make-believe worlds of constrained economic analysis with its convenient, but unrealistic assumptions about the real world."(pg 3)
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2001-09-07
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With permission of the license/copyright holder