The View of the World Bank and others in Free Trade

Such arguments as outlined on previous pages are also sustained by the World Bank. According to a 2001 report on globalization and growth, an analysis made on 24 developing countries shows that many of them (e.g. China, India, Hungary and Mexico) have increased their standards of living by taking advantage of global markets and sharply increasing trade’s contribution to the GDP creation [World Bank, 2001].

On the other side of the barricade there are the supporters of structuralist views, generally opposed to free trade. Nobel Prize winner Joseph Stiglitz, former chief economist of the World Bank is probably the most prominent of them. He contends that “the trade-liberalization agenda has been set by the developed North (or more accurately, by special interests in the North) at the expense of under-developed South. Consequently, a disproportionate part of the gains has accrued to the advanced industrial countries, and in some cases the less-developed countries have actually been worse off” [Stiglitz, 2002]. He illustrates his assertions with examples taken from the results of the Uruguay Round of multilateral trade negotiations, citing the agriculture, service industries and intellectual property rights.                               

In another article, signed by the same author together with Bruce Greenwald, also from Columbia University [2006] it is argued that, if Korea had followed strictly the advice to concentrate its full efforts in its most competitively-advantageous sector – rice production -, and not protected several eventually competitive industries, it would have been by now significantly worse off.