Equality of opportunity among states

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Robert H. Wad reviews Economic Justice in an Unfair World: Toward a Level Playing Field by Ethan B. Kapstein;

“Focusing on poverty is inadequate, Kapstein argues, because it does not put relations between states front and center. "It is governments," he writes, "that sign treaties and agreements, impose sanctions and boycotts, and make war and peace, and it is governments that -- for good or for bad -- are ultimately accountable for their actions at home and abroad." In other words, a theory of global distributive justice must emphasize relations between states and the kinds of economic arrangements states subscribe to. Individuals are not the only moral agents; states are also moral agents, with duties and responsibilities to one another as well as to their citizens.

Kapstein's goal is to present an alternative framework of global justice, one that centers on equality of opportunity among states. He refers to this framework as "liberal internationalism" and calls for an international economic system that is "inclusive, participatory, and welfare-enhancing for all." This order, Kapstein writes, "would give the smallest and poorest states greater voice in the system than they have at present," including in the governance of international organizations.

Building on the work of the political theorist Charles Beitz, Kapstein distinguishes two different social compacts: the domestic one between a state and its citizens, which expresses a society's basic principles of economic justice, and an international one among states, which determines the context in which countries pursue their domestic compacts. Some theorists of international relations hold that relative power, especially military power, shapes the international compact entirely. But Kapstein points out that powerful states do not always operate with a bit-better-than-the-law-of-the-jungle morality. In fact, they often forgo immediate relative gains in the interest of building a system of interactions that all participants view as reasonably fair. The resulting stability of expectations brings benefits for powerful states while increasing the common good. By way of evidence, Kapstein cites studies of the Tokyo and Uruguay Rounds of trade negotiations finding that the most powerful countries did not press their full advantages. Steered by the goal of promoting greater market access for all countries, they gave up more than they got.

The social arrangement that, in Kapstein's view, guarantees inclusiveness and participation and is "welfare-enhancing for all participants" is a global regime of free trade. In other words, free trade is the social arrangement that has the potential to best achieve justice in interstate relations and to fulfill each state's domestic social compact.

Kapstein believes that free trade can generate the highest attainable economic growth -- because it maximizes the scope of opportunity and equalizes opportunities for all potential participants -- and that high economic growth is good for the poor as well as the nonpoor. But he is also aware that despite the expansion of free trade, the growth rates of poor countries have not converged with those of rich countries, as free-trade advocates had predicted they would (the experiences of East Asia and, more recently, South Asia notwithstanding). Some of the continuing disparity -- owing to persistent low growth in a majority of poorer countries -- results from domestic politics and policies and from geography. But a good part, Kapstein argues, is due to the fact that rich countries have rigged the trade regime; far from being a level playing field, it is distinctly tilted against producers in poor countries…”

Via Peinso- a cool new development issues blog.

Watch or listen book event featuring Kasptein and Deepak Lal at Cato.


Excerpt from the Book, and Chapter 1 of the book

Daniel Dreszner’s short review of the book

Interesting papers by Ethan B. Kapstein;
The Economics of Young Democracies: Policies and Performance
Behavioral Foundations of Democracy and Development
The Political Economy of International Cooperation: A View From Fairness Economics
A Global Third Way Social Justice and the World Economy
Models of International Economic Justice

The Case for Open Industrial Policy- webcast of an event featuring Robert Wade

Morality and Capitalism

The Truth about Globalization and Inequality

Globalization is Working?

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