Tuesday , March 28 2017
Home / Dani Rodrik's weblog / Is Global Equality the Enemy of National Equality?

Is Global Equality the Enemy of National Equality?

Summary:
The question in the title is perhaps the most important question we confront, and will continue to confront in the years ahead. I discuss my take in this paper. Many economists tend to be global-egalitarians and believe borders have little significance in evaluations of justice and equity. From this perspective, policies must focus on enhancing income opportunities for the global poor. Political systems, however, are organized around nation states, and create a bias towards domestic-egalitarianism.  How significant is the tension between these two perspectives? Consider the China "trade shock." Expanding trade with China has aggravated inequality in the United States, while ameliorating global inequality. This is the consequence of the fact that the bulk of global inequality is

Topics:
Dani Rodrik considers the following as important:

This could be interesting, too:

Stephen Gordon writes L’affaire Potter

Jacob Funk Kirkegaard writes How a British Bid on Immigration Can Facilitate Brexit

Cullen S. Hendrix writes Trump Administration Is Walking Away from Good Governance in Oil, Gas, and Mining

Mark Thoma writes Paul Krugman: How to Build on Obamacare

The question in the title is perhaps the most important question we confront, and will continue to confront in the years ahead. I discuss my take in this paper.

Many economists tend to be global-egalitarians and believe borders have little significance in evaluations of justice and equity. From this perspective, policies must focus on enhancing income opportunities for the global poor. Political systems, however, are organized around nation states, and create a bias towards domestic-egalitarianism. 

How significant is the tension between these two perspectives? Consider the China "trade shock." Expanding trade with China has aggravated inequality in the United States, while ameliorating global inequality. This is the consequence of the fact that the bulk of global inequality is accounted for by income differences across countries rather than within countries. 

But the China shock is receding and other low-income countries are unlikely to replicate China’s export-oriented industrialization experience. So perhaps the tension is going away?

Not so fast. The tension is even greater somewhere else: Relaxing restrictions on cross-border labor mobility would have an even stronger positive effect on global inequality, at the cost of adverse effects at the lower end of labor markets in rich economies. On the other hand, international labor mobility has some advantages compared to further liberalizing international trade in goods.

I discuss these issues and more here.

0 0
Dani Rodrik
I am an economist, and a professor at the Harvard Kennedy School. My most recent book is Economics Rules: The Rights and Wrongs of the Dismal Science (Norton, 2015). I was born and grew up in Istanbul, Turkey. I still follow Turkish politics very closely, as you will find out if you spend any time with this blog.