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Winners and Losers in the Global Economy

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  • Kapstein, Ethan B.

Abstract

During the 1980s, economists began to observe a trend of rising income inequality in the advanced industrial economies. At the same time, the data revealed that these economies were becoming increasingly exposed to imports of manufactured goods from developing countries. The question that follows is whether these outcomes are causally related, as economic theory suggests is possible.The literature under review represents the current thinking on that question. These studies, all by mainstream economists, accept that free trade makes for good policy, since it results in efficiency gains that are enjoyed by consumers. But these scholars also recognize that free trade can alter the returns to the factors of production, creating new patterns of winners and losers.Although this body of literature provides an impressive display of technical skills and formal economic reasoning, and on the whole gives convincing evidence that trade is only one culprit among many in explaining the problems facing blue-collar workers, it still sheds relatively little light on the political economy of the outcome. That is, it tells us little about the role that political, economic, and labor market institutions might play in shaping factor returns. This deeper understanding requires that we take a fresh look at existing institutions and the material interests and ideas underpinning them. Only then will we discover why societies have allowed a certain group of citizens—mainly the least skilled and least educated—to fall by the economic wayside.

Suggested Citation

  • Kapstein, Ethan B., 2000. "Winners and Losers in the Global Economy," International Organization, Cambridge University Press, vol. 54(2), pages 359-384, April.
  • Handle: RePEc:cup:intorg:v:54:y:2000:i:02:p:359-384_44
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    Cited by:

    1. Robin Leichenko & Julie Silva, 2004. "International Trade, Employment and Earnings: Evidence from US Rural Counties," Regional Studies, Taylor & Francis Journals, vol. 38(4), pages 355-374.
    2. Ecker-Ehrhardt, Matthias, 2010. "Problem perception and public expectations in international institutions: Evidence from a German representative survey," Discussion Papers, Research Unit: Global Governance SP IV 2010-302, WZB Berlin Social Science Center.
    3. Christopher Hartwell, 2022. "Institutions and trade‐related inequality," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(3), pages 3246-3264, July.
    4. Elia, Stefano & Maggi, Elena & Mariotti, Ilaria, 2009. "Does the logistics sector gain from manufacturing internationalisation? An empirical investigation on the Italian case," Economics & Statistics Discussion Papers esdp09052, University of Molise, Department of Economics.
    5. Yakub Halabi, 2013. "Perpetuating the global division of labour: defensive free trade and development in the third world," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 20(1), pages 91-120, June.
    6. Ingrid Nielsen & Chris Nyland & Russell Smyth & Cherrie Jiuhua Zhu, 2005. "Perceptions of Subjective Economic Well-Being and Support for Market Reform among China's Urban Population," Post-Communist Economies, Taylor & Francis Journals, vol. 17(4), pages 425-447.
    7. Bellefeuille, Gerard, 2005. "The new politics of community-based governance requires a fundamental shift in the nature and character of the administrative bureaucracy," Children and Youth Services Review, Elsevier, vol. 27(5), pages 491-498, May.
    8. Andreas Bergh & Irina Mirkina & Therese Nilsson, 2020. "Can social spending cushion the inequality effect of globalization?," Economics and Politics, Wiley Blackwell, vol. 32(1), pages 104-142, March.
    9. Ian P. McManus, 2024. "Workforce automation risks across race and gender in the United States," American Journal of Economics and Sociology, Wiley Blackwell, vol. 83(2), pages 463-492, March.
    10. Neumayer, Eric & Soysa, Indra de, 2006. "Globalization and the Right to Free Association and Collective Bargaining: An Empirical Analysis," World Development, Elsevier, vol. 34(1), pages 31-49, January.
    11. Eric Neumayer & Indra de Soysa, 2004. "Globalization and the Right to Free Association and Collective," Labor and Demography 0410006, University Library of Munich, Germany, revised 22 Apr 2005.
    12. Robert Lepenies, 2014. "Economists as political philosophers : a critique of normative trade theory," RSCAS Working Papers 2014/11, European University Institute.
    13. Steven E. Lobell, 2004. "Politics and National Security: The Battles for Britain," Conflict Management and Peace Science, Peace Science Society (International), vol. 21(4), pages 269-286, September.
    14. Bellefeuille, Gerard & McGrath, Jenny & Jamieson, Donna, 2008. "A pedagogical response to a changing world: Towards a globally-informed pedagogy for child and youth care education and practice," Children and Youth Services Review, Elsevier, vol. 30(7), pages 717-726, July.
    15. Kapitsinis, Nikolaos & Metaxas, Theodore, 2011. "Economic crisis and the role of state policies in current globalized economy. The case of Greece," MPRA Paper 43650, University Library of Munich, Germany.

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