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

Abstract

Does openness in trade and the free flow of capital promote growth for the poor? The author 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.