POL SCI 124C Chapter Notes - Chapter 9: Win-Win Game
12 Apr 2018
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Workers in poor countries more likely to benefit than in rich countries. Because less to lose and more to gain. Foreign trade and investment encourages capital to flow to poor economies > raises demand for labor, make labor more productive, push incomes up. In developing world, returns on investment higher than industrialised countries. Benefits for a rich country through trade do not come at the expensive of poor country trading partners. Workers thus do not benefit as they should from an increase of demand of labor: salaries not go up, bad conditions, children forced to work. Some studies confirm trade promotes development > but don"t settle the matter. Precise economic linkages that underlie the correlations too difficult to see. Not consider intra-industry specialization in trade, which gives dev countries a further set of new opportunities. As dev countries grow by exporting, their demand for imports rises.
