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Volume Title: Challenges to Globalization: Analyzing the Economics Volume Author/Editor: Robert E. Baldwin and L. Alan Winters, editors Volume Publisher: University of Chicago Press Volume ISBN: 0-262-03615-4 Volume URL: http://www.nber.org/books/bald04-1 Conference Date: May 24-25, 2002 Publication Date: February 2004

Title: Front matter, Challenges to Globalization. Analyzing the Economics. Author: Robert E. Baldwin URL: http://www.nber.org/chapters/c9529

Challenges to Globalization Analyzing the Economics

A National Bureau of Economic Research Conference Report

National Bureau of Economic Research Korea Development Institute Chung-Hua Institution for Economic Research Tokyo Center for Economic Research Hong Kong University of Science and Technology Productivity Commission, Australia

Challenges to Globalization Analyzing the Economics

Edited by

Robert E. Baldwin and L. Alan Winters

The University of Chicago Press Chicago and London

R E. B is professor emeritus of economics at the University of Wisconsin at Madison and a research associate of the National Bureau of Economic Research (NBER). He is the author or coeditor of many books including Geography and Ownership As Bases for Economic Accounting, The Structure and Evolution of Recent U.S. Trade Policy, Political Economy of U.S.-Taiwan Trade, and Trade Policy in a Changing World Economy. L. A W is professor of economics at the University of Sussex. He is a research fellow of the Centre for Economic Policy Research (CEPR, London), and a senior visiting fellow of the Centre for Economic Performance at the London School of Economics. Among his books are: An Econometric Model of the Export Sector, Europe’s Domestic Market, Eastern Europe’s International Trade, Trade Liberalisation and Poverty: A Handbook, Regional Integration and Development, and Liberalising Labour Mobility under the GATS.

The University of Chicago Press, Chicago 60637 The University of Chicago Press, Ltd., London © 2004 by the National Bureau of Economic Research All rights reserved. Published 2004 Printed in the United States of America 13 12 11 10 09 08 07 06 05 04 1 2 3 4 5 ISBN: 0-226-03615-4 (cloth)

Library of Congress Cataloging-in-Publication Data Challenges to globalization: analyzing the economics / edited by Robert E. Baldwin and L. Alan Winters. p. cm. “A National Bureau of Economic Research conference report”— Includes bibliographical references and index. ISBN 0-226-03615-4 (alk. paper) 1. International economic relations. 2. Globalization. 3. Pressure groups. 4. Income distribution. 5. Human rights. I. Baldwin, Robert E. II. Winters, L. Alan. HF1359.C438 2004 337—dc22 2003056531

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Contents

Acknowledgments Challenges to Globalization: An Overview Robert E. Baldwin and L. Alan Winters

1

I. T C 1. Assessing Globalization’s Critics: “Talkers Are No Good Doers?” Kimberly Ann Elliott, Debayani Kar, and J. David Richardson Comment: Harry Flam 2. Globalization and Democracy Carl B. Hamilton Comment: Kimberly Ann Elliott

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II. T F  T C 3. Geography and Export Performance: External Market Access and Internal Supply Capacity Stephen Redding and Anthony J. Venables Comment: Keith E. Maskus 4. Globalization and International Commodity Trade with Specific Reference to the West African Cocoa Producers Christopher L. Gilbert and Panos Varangis Comment: Joshua Aizenman

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5. Globalization and Dirty Industries: Do Pollution Havens Matter? Jean-Marie Grether and Jaime de Melo Comment: Simon J. Evenett

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III. F M: L 6. The Role of Globalization in the Within-Industry Shift Away from Unskilled Workers in France Vanessa Strauss-Kahn Comment: Mari Kangasniemi 7. The Brain Drain: Curse or Boon? A Survey of the Literature Simon Commander, Mari Kangasniemi, and L. Alan Winters Comment: Alan V. Deardorff 8. The Effects of Multinational Production on Wages and Working Conditions in Developing Countries Drusilla K. Brown, Alan V. Deardorff, and Robert M. Stern Comment: André Sapir

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IV. F M: C 9. Home- and Host-Country Effects of Foreign Direct Investment Robert E. Lipsey Comment: Vanessa Strauss-Kahn 10. Competition for Multinational Investment in Developing Countries: Human Capital, Infrastructure, and Market Size David L. Carr, James R. Markusen, and Keith E. Maskus Comment: Anthony J. Venables 11. The Cross-Border Mergers and Acquisitions Wave of the Late 1990s Simon J. Evenett Comment: Rod Falvey

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Contents

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V. M 12. Financial Opening: Evidence and Policy Options Joshua Aizenman Comment: Robert M. Stern 13. Openness and Growth: What’s the Empirical Relationship? Robert E. Baldwin Comment: Simon Commander Contributors Author Index Subject Index

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527 531 539

Acknowledgments

This volume contains the papers and discussants’ comments presented at the seventh International Seminar in International Trade (ISIT). The seminar, jointly arranged by the Centre for Economic Policy Research, London (CEPR), the National Bureau of Economic Research, Cambridge, Massachusetts (NBER), and the Center for Business and Policy Studies, Stockholm (SNS), was held on May 24 and 25, 2002, in Stockholm. Financial support from the Jan Wallander and Tom Hedelius Foundation, NBER, and the U.K. Department for Trade and Industry is gratefully acknowledged. The seminar, which is a biennial event, brings together economists from North America and Europe to discuss papers aimed at informing those concerned with current public policy matters about relevant empirical economic research on these issues. We are grateful to Stefan Sandström of SNS who oversaw all the arrangements for the meeting; to Janet Seabrook of CEPR, who coordinated the program and logistics; to Helena Fitz-Patrick of NBER, who coordinated the preparation of the manuscript; and to Alex Schwartz of the University of Chicago Press, who coordinated the publication process. The manuscript benefited greatly from the comments of referees at both NBER and the University of Chicago Press, to whom we are grateful.

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