To
prepare a volume accessible to
a large audience requires clarity and synthesis. Too
often,
however, clarity and synthesis
invite naïve truisms and open the door to ideological statements.
Goldin and Reinert have successfully avoided
both. Indeed, they provide readers with
an
understanding of globalization that is rich in its complexity. Beginning with an overview of the
dimensions
of poverty, Goldin and Reinert explain how trade can reduce poverty by
increasing
labor-intensive production, human capital accumulation, and
technological learning; they examine
how FDI and debt and equity instruments
can help finance development; and they consider how
migration can allow workers
and their family back home to escape poverty through remittances.
At
the same time, Goldin and
Reinert observe that each of these aspects of globalization can fail to
reduce
poverty or even harm development. Trade
without public investment, without safety
nets, and without access to
developed-country markets diminishes or even negates the gains for
the
poor. Volatile capital flows can cause
financial crises. Aid can be ineffective
when governance
is poor or when donors have geopolitical motives. Migration
can also involve brain drain, which
can
harm developing countries and can even harm global efficiency if the
positive
externalities created
by skilled workers are large and are higher in poor
countries than in rich ones.
be
pro-market. There is an enormous set of
pro-poor and pro-market policies that
allow for more
equal market competition among and within countries, and that
ask that policy take account of
externalities as much as possible.
Having
a nuanced view of
development is humbling and sometimes disappointing. There is so much
we do not
know and we must acknowledge our knowledge gaps. Yet,
Goldin and Reinert
show that
nevertheless our understanding of development has substantially
improved. And
they
strongly encourage us to use that new knowledge to get the best out of
globalization in terms of
development and poverty reduction."
-François Bourguignon, Senior Vice President and Chief Economist, The World Bank