IDSA01H3 Chapter Notes - Chapter 15: Unequal Exchange, Comparative Advantage, Neoliberalism
25 Dec 2012
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Document Summary
There are two overarching perspectives on trade: free trade and fair trade. The removal of barriers to trade and the limitation of state intervention in economic and social interactions will provide greater social gains in the north and south spurred by neoliberalism. State intervention was bound to be inefficient and inaccurate because of state officials" limited access to information and their tendency to be biased towards the demands of specific interest groups. Free trade (led to successful economic growth of us and uk) by sparking competition, which leads to technological innovation and specialization as nations seek to enhance their comparative advantage. Developing countries need to remove their barriers to trade to gain access to northern technology, products and investments while producing and trading those goods for which they have or can develop a comparative economic advantage. Thus, market regulation must be used to protect the weak, not the strong, and to create a more equal international trading system dependency theory.
