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For Open Economics and Democratic Politics
has differed from Keynes whose attempts to directly influence politicians are well For Open Economics and known. But his stance also differs from the usual practice of public-minded Indian economists who try to directly interact Democratic Politics A Stream of Windows: Unsettling Reflections on Trade, Immigration and Democracy by Jagdish Bhagwati; MIT Press, 1998; pp XLXIX + 531,
Sensitive people seeing the poverty in developing countries naturally seek measures to alleviate this poverty. But often seemingly sensible measures turn out to be impractical; they may even be counterproductive. Bhagwati’s research has helped to separate the chaff from the grain. Too often development policies adopted in the 1950s and the 1960s tried to foster domestic industries by protecting them from import competition. It was thought that such protection was necessary to overcome the various shortcomings in the economic structures in developing countries. Bhagwati’s research showed how such protectionist economic policies would fail to fulfil their goals. He developed the theory of how trade restrictions are not justified by what have come to be known as domestic distortions. It was not that he was against encouragement of infant industries. But he argued that trade protection was not the right instrument. If the labour market in a country does not work well or the country would like to encourage the production of certain goods then the appropriate policy is not to levy import duties but to undertake appropriate domestic policies.
In recent years he has carried the battle against protection to certain policies adopted or propagated by the US. The US has sought to adopt preferential trading arrangements, including trying to gain preferential access to a partner’s market through bilateral negotiations, and trying to use labour and environmental standards to block imports from developing countries. This battle has been waged through extensive research in these areas. However, Bhagwati believes that it is incumbent on theorists to try to attempt to inform the public about public issues using the insights provided by academic research. He notes in passing the high quality of debate on economic issues in the mid-19th century in the British parliament, and ascribes it partly to the involvement of academic economists in policy issues. Flowing from this conviction he has written extensively for the general public on important policy issues. This book gathers together some of his writings for the popular press.
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