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(CREDIT: GETTY IMAGES/ CFOTO/FUTURE PUBLISHING)
Dear Colleague,
In the 1990s and 2000s, developing and transition economies opened up their markets and embraced globalization, but now policymakers debate the future of globalization, writes Dartmouth economics professor and Peterson Institute for International Economics fellow Douglas Irwin for the upcoming June edition of Finance & Development Magazine.
“Trade interventions are on the rise, in the form of industrial policies and subsidies, import restrictions based on national security and environmental concerns, and export controls to punish geopolitical rivals and ensure domestic supply.” What, Irwin asks, should developing economies do to navigate this new environment? Should they adopt similar policies, turning inward to protect key sectors with subsidies and trade controls?
“Developing economies would be ill-advised to turn their backs on the global economy and give up the idea of supporting exports and acquiring technology from beyond their borders. They still have much to gain from the rest of the world and a lot to lose by returning to the closed-door policies of the past.”
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