SOAS Research Online

Abstract

Major changes occurred in the world economy during the last twenty years of the twentieth century, but there was considerable disagreement as to what those changes were and who gained and who lost from them. In the opinion of the business establishment in the developed countries, the changes created an integrated international economy that benefited all. This sanguine view was summarized in the US Economic Report of the President of 1999: Economies that are open to international trade and investment are more likely to experience a rising standard of living than are economies with significant barriers to cross-border economic activities. Consumers in open economies benefit from a wider variety of goods at lower prices than do consumers in economies that resist competition from foreign suppliers. The economy as a whole benefits from an increased ability to devote its scarce resources to economic activities that it performs relatively efficiently. Over time, through both international trade and international investment, open economies benefit from higher rates of productivity growth and innovation that result from increased participation in international markets. (CEA 1999: 260)