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Globalisation isn’t working

The era of liberal globalisation has produced surprisingly poor economic results. Global growth is stagnating, and without the dramatic advance of China, poverty and inequality between countries would be growing sharply too

By Robert Wade   July 2006

According to the mainstream liberal argument in most developed countries, public policy should try to increase social justice by evening up opportunities—equity—but should not try too hard to reduce income inequality. The exception is at the bottom: public policy should try to eliminate extreme poverty. For the rest, income inequality is the price that has to be paid for a dynamic and flexible economy.

In the liberal perspective, equity and efficiency turn out to be complements; the key to both is free markets and competition. Applied to the international economy, this approach says that aid may be appropriate for the…

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