In Defense of Globalization is an important contribution to an often incoherent debate. Jagdish Bhagwati never tires of proselytizing for free trade and open borders . summarized and explained so that a non-specialist can understand them. Jagdish Bhagwati, In Defense of Globalization, Oxford University Press, The first part of the review is basically a summary of the issues covered, mostly .. In a single page conclusion, in Part V, the author says: 'Reason and analysis. Notes on In Defense of Globalization by CFR Senior Fellow Jagdish N. Bhagwati. This should attract students to economics by showing how the abstract.
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PDF | On Jan 1, , Melani Cammett and others published In Defense Reviewed Work(s): In Defense of Globalization by Jagdish Bhagwati. on globalization to the United Nations, Jagdish Bhagwati is one of the In Defense of Globalization is a book of undoubted value, which steps in a scenery of. print Print; document PDF Jagdish Bhagwati provides a bracing counter- argument in In Defense of Globalization. In Defense of Globalization is especially strong in comparison to most of the recent volumes on the other side of the debate.
It would certainly imply an end to any future multilateral trade negotiations. And it would definitely damage the WTO. This last option is not exciting but is preferable for those who would like to minimize damage to the WTO and the multilateral trading system. To see what damage the elimination of any prospects for new multilateral trade negotiations implies requires viewing the WTO as a three-legged stool.
The first leg is multilateral trade negotiations. The second leg is rule making—for example, setting antidumping and subsidy rules. The third leg is the dispute settlement mechanism, the definitive achievement of the agreement ending the Uruguay Round, which makes dispute resolution binding on member governments.
The issue before us is what impact the weakening—or even breaking, if Doha is killed—of the multilateral trade negotiation leg will have on the other two legs. Rule making, which has taken place largely during multilateral trade negotiations, would now be freestanding or shifted elsewhere. The dispute settlement mechanism would also be weakened if disputes are resolved in other bilateral and regional forums instead of in the WTO.
Around the turn of the millennium, the United States opted to pursue regionalism with South America, bypassing the more dynamic east Asia. East Asian countries were excluded from the proposed Free Trade Agreement of the Americas and, as a result, Asian trade initiatives typically excluded the United States. The United States was therefore seeking a way to get back into trade with east Asia. The sense of the smaller countries, such as New Zealand, Singapore, and Vietnam, that the United States would be a counterweight to Chinese foreign policy in east and south Asia allowed the United States to reestablish its presence in the region.
The TPP appears therefore to have been inspired by commercial motives and not by a desire to contain China as has sometimes been asserted. But U. For example, the lobbyists sought to include labor union demands, even though only 11 percent of the U.
Attempts to incorporate such demands have met with resistance at the WTO by influential and democratic countries, such as Brazil and India. That is hardly desirable. The correct policy must allow accession to the TPP provided a country liberalizes trade, without these side conditions that are unrelated to trade and without undesirable WTO demands.
Acceptance of such demands should not be a prerequisite for joining the TPP. Put it this way: If I want to join a golf club, I need to play golf. But I should not have to go to church and sing hymns with the other club members. For one thing, the two markets are gigantic, whereas the TPP was essentially imposed on the small countries of Asia and only afterward were bigger countries, such as Japan and Korea, invited. Unlike in the TPP, U.
And even within the European Union there are serious disagreements on several issues, which will slow down the negotiations.
The United States has never liked this idea, which it views as a poorly disguised demand for protection. Recall that with greater openness in trade there often comes a sense of economic insecurity from the fear that more openness will create greater volatility of prices and hence of jobs. Even though the objective evidence for this fear is not compelling—recent empirical analyses suggest that labor turnover has not particularly increased in the United States and United Kingdom despite ongoing globalization—the fear is palpable and prompts anti- globalization sentiments.
I and several others have therefore long sug- gested that such assistance be provided as the economy is opened up to greater trade. Then again, the pace at which globalization advances social agendas need not be accepted as satisfactory. Today, if a developing country regis- ters growth below 6 percent annually, it is regarded as a failure. Why not the same with the speed at which we achieve social agendas? So we need to consider the ways in which we can reinforce the benign social effects of globalization.
Thus, child labor is known to decline as economic growth occurs. But what can we do to accelerate its removal? This is where the question of appropriate choice of policy instruments, and international agencies to oversee them, becomes pertinent.
The latter group would rather see non-sanctions-based ap- proaches and the location of the issue at the ILO instead. My own sympathies lie with the latter position, for reasons that are explained in Chapters 10 and Again, the question of appropriate management of globalization requires attention to the speed at which globalization must be pursued.
The dif- ficulties that Russia got into under shock therapy, which was a program of very rapid stabilization and reform measures, are a reminder that the best speed is not necessarily the fastest speed. Or take the prescription to dismantle tariffs. Maximal speed would mean that they are eliminated forthwith.
But this may mean that the government falls and the tariffs are reimposed; gradual reduction over a few years would then have been preferable.
To use an analogy, if you kick a door open, it may rebound and close instead, whereas gentle pressure on it would ensure that it remains open. A dramatic example of mismanagement of globalization, which is the focus of Chapter 13, is the imprudent and hasty freeing of capital flows that surely helped to precipitate the Asian financial and economic crisis starting in Again, if one thinks of immigration, discussed in Chapter 14, it is clear that a rapid and substantial influx of immigrants can precipitate a reaction that may make it extremely difficult to keep the door open.
There is clearly prudence in proceeding with caution, even if one considers, as I do, that international migration is an eco- nomically and socially benign form of globalization. And so, in these different ways, globalization must be managed so that its fundamentally benign effects are ensured and reinforced.
With- out this wise management, it is imperiled. I shall also argue that this management will be better and more effective if the governments, inter- national institutions, corporations, and intellectuals who celebrate and reinforce globalization joined hands with the non-governmental orga- nizations that generally discount and oppose it, creating what UN Sec- retary General Kofi Annan calls a partnership, achieving what I call a shared success.
So before I get on with my principal themes of globaliza- tion with a human face and how to make it work better, I turn now to a close look at these NGOs. What are they? Why have their numbers increased to a level that none had anticipated a quarter century ago? How may their energies and passions be harnessed to produce a yet bet- ter globalization?
Writing in , Salamon estimated the NGOs at levels as high as , in the United Kingdom alone and roughly 20, in the poor countries. Besides, the numbers were growing rapidly: As it happens, this growth has been sustained and perhaps has even accelerated.
In fact, the definition of NGOs is both nebulous and shifting. They are commonly defined as any non-profit organization that is indepen- dent from the government. Should we refuse to admit a lone activist as an NGO? To refuse to do so would militate against the poor countries where organi- zation and finance are in short supply and many NGOs are shoestring operations.
Given the high visibility of the anti-globalization NGOs today, it is easy to forget that these NGOs represent only a small fraction of the groups that have emerged worldwide.
Indeed, the NGOs range over is- sues and objectives as diverse as outlawing bigamy, changing inherit- ance laws to enable women to inherit, or eliminating female circumcision as a barbaric relic of the past.
Only a few are focused narrowly on the global economy and global issues. Few but growing in public presence are the poor-country NGOs, the most prominent of which are the Third World Network, whose articulate head is the Malay- sian intellectual Martin Khor; the Consumer Unity and Trust Society, the leading NGO in India on trade and globalization issues, run by Pradeep Mehta;3 and the Center for Science and Technology, in New Delhi, which focuses on environmental issues and has achieved legend- ary status for the insights and programs that it has put on the world environmental agenda from a poor-country Southern perspective.
This rise of non-profit groups of varying sizes, ranging from low-key, empty-till mom-and-pop outfits to media-savvy, cash-plush, lawyer- infested razzle-dazzle juggernauts, for all kinds of public-interest causes reflects an accentuation of the altruistic activism directed at charitable and social reform causes that is hardly new in many societies.
The million NGOs in India as of a few years ago are the inheritors of activism that included individuals and groups that sought reforms in archaic religious traditions. Notable among those who devoted themselves to social progress were the members of the Servants of India Society, founded almost a century ago in Having returned from exceptional academic success at En- glish universities such as Oxford and Cambridge, they accepted educa- tional positions at a pittance over a lifetime to further the cause of higher education.
A great controversy erupted over the plans to dam the Narmada River in Gujarat and two other states , a project that involved the construction of thirty major dams and three thousand smaller ones. Many activists objected to the dam project and to the dam- age it would inflict on the communities living on the lands to be sub- merged.
Although it was not correct for the activists to argue that resettlement was being ignored, the agitation served to focus extra at- tention on this important aspect of the construction of these dams.
In October the supreme court of India, after six years of agitation and delays, declared itself satisfied with the final resettlement plans and gave the green light to the dam project. But this still does not answer the question of why NGOs seek- ing public good should be springing up in the first place.
I recall sitting down to lunch in the early s with the planner Pitambar Pant on the lawn of his home, in the mild sun of the vanishing Indian winter in the month of January, when the flowering shrubs that are the pride of the bureaucratic bungalows are pregnant with signs of new life.
This was symptomatic of the growing numbers of women going for higher education.
In Defense of Globalization
Pant and I wondered where they would all go. We thought they would be doctors, bureaucrats, politi- cians, lawyers, scientists, and much else. But we did not think that, ani- mated by altruism while also informed and equipped to pursue it by their education, they would become both leaders and followers in the immense tide of NGOs now seeking to change Indian society in pro- gressive directions.
So we find that the mantle of social activism in India, long worn mostly by men, has now fallen on the shoulders mostly of women. The ecofeminist Vandana Shiva is the most prominent in the Western media, but she is just one of a multitude. Indeed, doing good has become so much the thing to do in India that where the parents of a young man once might have bid for a bride by offering riches or a green card for immigration into the United States through marriage, the joke today on the Indian subcontinent is that they must offer the bride her own NGO!
Interact here with the environmental, human rights, and other NGOs, as I often do, and mostly you run into dedicated and impassioned women. Their writings reflected recognition of the impossibility of forming a meaningful democratic opposition within the Communist Party. New strategies were necessary. The dissident intellectuals opted for parallel politics at the level of individual morality and action, outside the frame- work of corrupted politics. In societies under the post-totalitarian [i.
People have no opportunity to express themselves politically in public, let alone to organize politically. The gap that results is filled by ideological ritual. Yet even in such societies, individuals and groups of people exist who do not abandon politics as a vocation and who, in one way or another, strive to think independently, to express themselves and in some cases even to or- ganize politically, because that is a part of their attempt to live within the truth.
The fact that these people exist and work is itself immensely important and worthwhile. Even in the worst of times, they maintain the continuity of political thought. But it ran into an obvious problem once communism had collapsed.
As the new regimes began to struggle with democratic governance, the politics of values was no longer effective. It was replaced by politics defined by democratic processes such as elections and parliaments. In turn, politics was now dominated by ideas and interests that dictated the realities of choices on issues such as the policies and institutions to be devised to guide economic transition.
These were precisely the areas where the anti-politics of the inherited civil society dissidents was at a loss. This indeed turned out to be the case.
Citizens must shoulder their share of responsibility for social development. There are various minor- ity needs that a representative democracy cannot, in its present form, safeguard.
Civil society encourages ordinary people to participate in govern- ment, thereby strengthening relations between citizens and their state. Thus Salamon has written: As of , several thousand founda- tions were registered with governmental authorities in Poland. In Hungary, 6, foundations and 11, associations had been registered by mid This explosion can be documented also for Russia, Bulgaria, and other former socialist countries.
He arranged for the heads of these institutions to meet with prominent NGOs such as Jubilee even as his riot police clashed with the demonstrators on the streets. In both cases, the fact that communication today via e-mail and the Internet makes organization and coordinated civil action so much easier than when Mahatma Gandhi, for instance, organized the civil disobedi- ence movement in India in the s and s surely has played its part. In the case of the NGO movement, where organization has flourished, this free-rider problem is transcended by the glue that the values orientation provides, by the sense of solidarity and commitment that follows from the shared presumption that the strength of numbers and activism alone can guarantee success in their cause.
Thus while dif- fused consumers may succumb to the free-rider problem, and seem tra- ditionally to have done so where their own economic welfare is involved, this does not happen when citizens are motivated by focused altruism instead.
I have only sketched what seem to be the principal reasons why NGOs have become immensely important today. Their views that economic globalization constitutes a threat to our social well-being need therefore to be examined with care, as I will do in Part II, starting with the next chapter.
But, since they represent a phenomenon that is as demanding of our attention today as the continuing economic globalization, and since their objectives will be shown in this book to be advanced rather than diminished, as they fear by such globalization, it should be pos- sible to join hands to advance the same objectives more deeply through the design of appropriate governance, which I will turn to in Part IV.
Bhagwati--In Defense of Globalization
But, in joining hands, I must caution that the functioning of the NGOs has raised certain questions that need to be addressed. Just as we insist on transparency and regulation for other agents and actors in society, it is important to see that these demands cannot be evaded by NGOs, especially if we are to work with them in the public domain.
The tendency on the part of some of them to turn their halos into shields is unwise and unacceptable. The NGOs that claim the moral high ground because they profess a moral commitment need not be taken at their word.
Pecksniff in Martin Chuzzlewit. Comfortable in his professed empathy for humanity, and even christen- ing his daughters Mercy and Charity, Pecksniff turns out to be a scoun- drel in truth. Auden alerts us to the need for critical scrutiny in a gentler tone: Base words are uttered only by the base And can for such at once be understood, But noble platitudes: Many independent observers, including those who are NGO-friendly, have therefore argued that the transparency many of the NGOs ask from others needs to be extended to them as well.
She responded with arcane legalisms such as the right to make anonymous donations, none of them insurmountable in my view if Public Citizen wished to put principles such as transparency before the pursuit of profits. I use the word deliberately, as profits are not all that different from contributions insofar as they both imply the acquisi- tion of cold cash. If transparency is not routinely practiced by NGOs, it would be noth- ing short of a miracle if NGOs did not produce their own counterparts of the occasional corruptions of some multinationals such as Enron.
Lest anyone thinks that NGOs are exempt from the laws of human na- ture, recall the lapses by one of the most venerated non-profit organiza- tions, the Vatican—consider its historical record on anti-Semitism or its collaborations, first with the conquistadors in South America and next with the oppressive dictatorial regimes that afflicted the region until very recently—and by charities such as the United Way whose CEO turned out to be not quite a moral example to the rest of us and the American Red Cross whose practice of secretly reassigning funds gathered in a disaster to its general war chest, practicing a deceptiveness that amounts to fraud, came to light after the outpouring of charitable contributions following September Nor are the NGOs and their rank and file beyond practicing the occasional lie, much like the corporations, politicians, and bureaucrats they excoriate.
These are only among the most disturbing of such activities, all presumably in the name of a good cause. Another recent example is even more striking because it was per- haps based not on outright fraud but rather on the desire to inflate num- bers to motivate remedial action. Many accounts in British and American news media last year spoke breathlessly of 15, child slaves. The number first appeared in Malian newspapers, citing the Unicef of- fice in Mali.
The Unicef office in Ivory Coast, which had, concluded that it was impossible to determine the number. This month, the results of the first extensive survey of child labor in cocoa plantations in Ivory Coast and three other African nations were re- leased by the International Institute of Tropical Agriculture, a nonprofit, multinational organization that works in Africa.
The survey. As for child workers [most of them ages fifteen to seventeen] unrelated to the plantation owners. Ninety percent of the children, the study says, knew the intermediary or broker who hired them for the plantation work. But even in the United States—my own background is a farm- ing background—we grew up helping on the farm.
Everyone was surprised when all the wild figures—15, trafficked children—were being thrown around. It is also necessary to recognize that NGOs, no matter what universalism they profess, are grounded in national political and cultural contexts.
This constrains their universalism when it comes to choice of causes and campaigns. Let me take just two examples. It is hard to believe that the U. Then again, when the WTO found, correctly again as it happens, against the United States for providing subsidies to exporters operating through offshore subsidiaries, the U.
Or did the deafening and nationalistic protests of the U. The problem of the cultural context is acute also for another reason. Globalization involves issues of the balance of power, and hence also of democratic governance, between groups and between nations.
The NGOs-multinationals divide is therefore crisscrossed by a within-NGOs divide that reflects a poor-rich country divide. These large American anti-capitalist movements have effectively taken over the mili- tant scene in this country. The poor-country NGOs, with their shoestring budgets, feel overwhelmed by the hugely more prosper- ous NGOs of the rich countries. I visited the leaders of nearly all the labor unions in India.
When I was attending a conference at the U. Chamber of Commerce building, I was told that it was near the Hay-Adams. The salience of this rich-poor divide is evident also when the poor countries object to what seem like obviously good proposals, such as the acceptance of amicus curiae briefs which in the United States can be filed by qualified organizations and individuals who are not direct par- ties to a case.
Such briefs by NGOs are seen by the poor countries as giving the rich countries two oars to put in the disputed waters. When these NGOs back U. We cannot ignore, without sowing seeds of discord, the rela- tive size and resources of NGOs in rich and poor countries, and the inference of the bias it builds into defining the globalization agendas and priorities in favor of rich-country definitions of public interest.
Recognizing a problem often prompts its resolution. NGOs are in- creasingly aware of these shortcomings, and signs of change are already visible. Their role as partners in creating and sustaining appropriate governance is therefore a task that can be pursued with confidence.
I n Act III, Scene 4 of King Lear, the proud old king, transported pro- foundly by the tragedy that relentlessly unfolds and engulfs him, kneels to pray as a storm rages around him, to regret his neglect of the wretched of the earth: Take physic, pomp; Expose thyself to feel what wretches feel, That thou mayst shake the superflux to them, And show the heavens more just. Of course, the acute sensitivity to poverty and the moral commit- ment to reduce it are nothing new.
It would be strange indeed if the many enlightened leaders and intellectuals of these nations had not al- ready resolved to wage a war on poverty half a century ago. That, in fact, was the very focus of the leaders in the many independence movements that resulted in extensive decolonization at the end of the Second World War. Writing some decades earlier, even the conservative Winston Churchill, who had observed acutely a shift in public opinion in the decade of the s, had remarked: The great victories had been won.
All sorts of lumbering tyrannies had been toppled over. Authority was everywhere broken.
Bhagwati--In Defense of Globalization
Slaves were free. Conscience was free. Trade was free. But hunger and squalor were also free and the people demanded something more than liberty. Indeed, few in the twentieth century have not had poverty on their minds and a passion to remove it in their hearts.
So, the compelling question is altogether different as we consider the issue of poverty as the new century, and even the new millennium, be- gins: And that returns us to the central question: As it happens, the proponents of globalization have it right. Two types of supporting argumentation can be produced: Real Story of Globalization, has written from his firsthand experiences in Asia and described with telling stories and portraits from the ground how poverty has been licked by globalization.
Let me cite one example that stayed with me long after I had read the book: The combined chicken farm and gambling den is right next door to a Lucent factory that manufactures microelectronics components—the factory floor of the broadband revolu- tion and the knowledge economy. The work is done in large square buildings that look like giant sugar cubes. At the entrance stands a shrine honoring Brahma with yellow gar- lands and small wooden elephants. Inside are thousands of Thai laborers.
Then they got motor- bikes. On my way back into town I amble through the industrial estate in search of a ride. A shift is ending. Thousands of women for it is mostly women who work in the foreign-owned electronics factories pour through the factory gates.
I pass restaurants, drugstores, supermarkets, jewelers, tai- lors, film shops, vendors of automatic washing machines. The scientific analysis of the effect of trade on poverty is even more compelling. It has centered on a two-step argument: These propositions have been supported by many economists and policy makers of very different persuasions over the years.
We calculated that a really progressive standard of living would necessitate the increase of wealth by or per cent. That was however too big a jump for us, and we aimed at a or per cent increase within ten years.
It fell to me to work on this problem since I had just returned from Oxford and was the economist assigned to assist the proponents in the Indian Planning Commission of this plan to raise the minimum incomes of the poor. I assembled the income distribution data that were available at the time; their quality was pretty awful because of inadequate statisti- cal expertise in most countries, nor were they standardized for interna- tional comparability.
But a quick scan seemed to suggest that there was no magic bullet: So the pri- mary inference I made was that if there was no way to significantly affect the share of the pie going to the bottom 30 percent, the most important thing was to grow the pie. In short, my advice—what I might call with some immodesty the Bhagwati hypothesis and prescription—was that growth had to be the principal but, as I argue below, not the only strat- egy for raising the incomes, and hence consumption and living stan- dards, of the poor.
In this view, growth was not a passive, trickle-down strategy for help- ing the poor. It was an active, pull-up strategy instead. It required a gov- ernment that would energetically take steps to accelerate growth, through a variety of policies, including building infrastructure such as roads and ports and attracting foreign funds.
By supplementing meager domestic savings, the foreign funds would increase capital formation and hence jobs. Those of us who were present at the creation therefore dismiss as nothing but ignorance and self-serving nonsense the popular and popu- list propositions that, first, growth was regarded as an end in itself and poverty removal was forgotten until a new, socially conscious genera- tion of economists who worried about poverty arrived on the scene, and second, that the strategy of growth in order to reduce poverty was a laissez-faire, hands-off, passive strategy.
We were also aware that growth had to be differentiated. Some types of growth would help the poor more than others. In India, the em- phasis on autarky and on capital-intensive projects reduced both growth rates and increase in the demand for labor, so the impact on poverty was minimal.
Then again, growth can paradoxically immiserize a country and hence its poor as well unless corrective policies are undertaken simul- taneously. Consider Bangla- desh, which exports a lot of jute. Growth in the shape of more jute production, resulting in greater exports, would depress the international price of jute. Suppose then that one hundred additional bales of jute have been produced. Immiseration is the result. This paradox earned me a lot of attention, partly because econo- mists love paradoxes; whoever got attention for saying the obvious?
This was either because of economic reasons such as market saturation or because of protec- tionism that would choke off markets as soon as more exports material- ized.
A suitable policy can always nip the immiserizing growth paradox in the bud, ensuring that growth does amount to an increase in the size of the pie. Think of the green revolution, the evocative phrase used to describe the arrival and use of new and vastly more productive vari- eties of wheat and rice that had been invented with support from the Ford and Rockefeller Foundations and for which Dr.
Norman Borlaug got the Nobel prize for peace in So there you have the divide that attends every transition to a major new technology: But then imagine what happens when some innovate and increase their produc- tion so that the price falls, while others have not innovated and their stagnant output now is sold at a lower price. Those who lag behind do not merely fall behind; they fall by the wayside, struck by a blow not of their making. Thus many feared that the green revolution would usher in the red revolution!
Dawn of a New System
But this did not come to pass. For one thing, policies were devised to ensure that immiseration of the laggards generally did not occur. Agricultural prices did not fall be- cause of increasing demand, which resulted from investments that added new jobs and incomes. The government in India also actively used price support schemes, providing a floor to possible declines in prices. And as for the different fear that landless labor would be replaced by the higher yields, the reality turned out to be far more agreeable.
The joint use of new seeds and irrigation led to multiple cropping; this resulted in an increased demand for labor on farms, prompting improvement in wages. Yet another possible source of immiseration with new seeds is the emer- gence of new pests and diseases that can be destructive of yields and of farming more generally.
In the Indian case again, the government was careful to establish a substantial scientific support system that contained these dangerous possibilities. So appropriate policies will always enable us to profit from growth and to moderate, even prevent, unpleasant outcomes for the poor.
While some governments have not been careful as discussed in Chapter 16 on coping with the potential downsides of globalization , other governments have not been blind to these problems. Other interesting issues, how- ever, must be addressed. First, recall that different types of growth e.
Such a de- velopment strategy undermined the cause of the poor by reducing growth and by delinking it from increased demand for the low-grade labor that constitutes the bulk of the poor. Second, what can we do to improve the access of the poor to ex- panding opportunities in a growing economy? It is not always true that growth will pull up the poor into gainful employment.
Even though growth opens the doors, the traction in the legs of the poor may not be enough to carry them through these doors. For example, tribal areas in India where poverty is acute may not be connected sufficiently to the mainstream economy where growth occurs. And we know from inner- city problems in the United States that the supply response of its youth to jobs downtown may be minimal unless we also address structural problems such as the allure of drugs, transportation bottlenecks, and the lack of role models in broken and single-parent families struggling against terrible odds.
I should add that those who grow up in the inner city also need to acquire the carriage and demeanor that are critical for service sector jobs downtown—though you need them less in the kitchen, where you flip hamburgers, than in the front, where you face the cus- tomers.
But if you know the history of developmental economics, then you also know that the earliest development-policy makers tried hard to improve the access of the poor to growing incomes by making it easier for them to borrow to invest.
This was done in India by forcing banks to open branches in rural areas and by asking them to lower collateral re- quirements. The problem with this policy was that it often resulted in bad debts. A breakthrough, however, came with the invention of micro- credit programs, which go down to the very poor.
The problem, de Soto says, is that these assets do not enjoy property rights and the associated rule of law that protects and enforces those rights.
This prevents the poor from being able to collateralize these assets in order to borrow and invest. De Soto has made this case beautifully and convincingly, citing the nineteenth-century American experience. There is no doubt that his prescription must be tried.
As I remarked earlier, the anti-market protesters do not adequately appreci- ate that, as has been documented by numerous development economists who have studied both the working of controls and the rise of corrup- tion in developing countries, far too many bureaucrats impose senseless restrictions just to collect bribes or to exercise power. I can do no better if I am to persuade skeptics than to tell here the bon mot that Sir Arthur Lewis, the Nobel laureate in development economics from St.
Lucia which has the distinction of having produced two Nobel lau- reates, the other being the poet Walcott shared with me. When he met Thomas Balogh, a radical economic ad- viser to British prime minister Harold Wilson, he told him: Without a voice, it is highly un- likely that they will get appropriate and effective legislation. NGOs provide yet another support mechanism for the poor; and the Indian supreme court took great strides in the s and s by giving legal standing to social action groups as the Indian NGOs are called to bring action before the courts on behalf of the poor.
But it will often amount to a hill of beans unless a growing economy gives women the economic independence to walk out and even to sue at the risk of being discarded. A battered wife who cannot find a new job is less likely to take advantage of legislation that says a husband cannot beat his wife. An impoverished parent is unlikely, no matter what the legislation says, to send a child to school if the prospect of finding a job is dismal because of a stagnant economy.
In short, empowerment, as it is called today—a fancy word for what we development economists have long understood and written about—proceeds from both political democracy and economic prosperity, and it is a powerful tool for aiding the poor. Finally, we need to go beyond just having incomes of the poor grow. Growing incomes would do little good if frittered away, for instance. So, drawing on a lecture I gave on poverty and public policy, let me say that we have a final set of problems that need to be addressed once in- come has been provided: First, as sociologists of poverty have long known, the poor may spend their incomes on frills rather than on food.
As the Japanese proverb goes, to each according to his taste; some prefer nettles. In fact, there is now considerable econometric evidence. Should we actively intervene so that the poor are seduced into better fulfillment of what we regard as their basic needs? I do [think so]. In fact, I see great virtue in quasi-paternalistic moves to induce, by supply and taste- shifting policy measures, more nutrient food intake, greater use of clean wa- ter, among other things, by the poor.
In thus compromising the principle of unimpeded and uninfluenced choice, for the poor and not for the others, evidently I adopt the moral-philosophical position that I do not care if the rich are malnourished from feeding on too many cakes but do if the poor are malnourished from downloading too little bread, when their incomes can download them both proper nourishment if only they were to choose to do so.
Of course, the question then also arises as to the distribution of the con- sumption, even when adequate and desirable, within the household. This is, of course, an active issue today, with the rise of feminism.
But then, was our earlier optimism about the benign relationship be- tween trade and growth also justified despite the fact that one could readily imagine circumstances where, instead of helping growth, trade could harm or even bypass growth? Indeed, economists can, and do, readily build formal models to derive these unpleasant possibilities. And empirical evidence supports the optimism. First, consider the late nineteenth century. For instance, on international trade analysis, the relevant chapters in the book include Chapter 5 on "Poverty: Enhanced or Diminished.
Similarly, when students deal with direct foreign investment or multinational corporations, Chapter 12 in the book "Corporations: Predatory or Beneficial? Issues such as corporate social responsibility, again uppermost in many undergraduates' minds, are also discussed systematically and can be assigned to stimulate and hold the students' interest by demonstrating how economic analysis can help address these questions effectively.
Chapter 7 on "Women: Harmed or Helped? Similarly, in Chapter 6 several econometric and analytical studies on child labor and how trade affects it in poor countries will demonstrate to undergraduate students the power of economic analysis in addressing a burning question of the day. Environmental discussions from standard textbooks can also be supplemented with Chapter 11 "Environment in Peril?
In all these chapters, and others such as on gradualism versus shock therapy, the book offers nuanced arguments so that students are exposed to different arguments and learn how to use economic analysis to analyze them and reach their own conclusions. This should attract students to economics by showing how the abstract principles they learn are not sterile exercises but can be used to analyze pressing problems that they confront on campuses and in public policy on a daily basis.
All of the above applies to undergraduate courses in development and international economics. Here, the issues raised in the book are even more directly connected to whatever content a course might have.
The book offers chapters that analyze the most important issues that are now of concern in developmental economics. This applies equally to undergraduate courses, now frequent, on globalization. I have used the book as the principal text for a student course in Columbia University's School of International and Public Affairs, and the reaction was strongly favorable. Many students said the book and the course encouraged them to explore different arguments and taught them how to evaluate those arguments, whereas other courses often offered conclusions rather than arguments.Cooper, Foreign Affairs "Bhagwati, a Columbia University economics professor and author of many books on trade, makes all the right economic arguments, but without the flurry of statistical correlations often used to make the case.
It is distinct from other aspects of globalization, such. Parents will choose to feed their children instead of schooling them if forced to make a choice. He thus has an admirable ability to address patiently and sympathetically globalization's well-meaning but wrong-headed critics.
Auden alerts us to the need for critical scrutiny in a gentler tone:
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