Is free trade necessary for economic development?
From PBS Online NewsHour: WILLIAM EASTERLY, Former World Bank Economist: Ethnic conflict is certainly a tragic reality in a lot of places, but I’m not sure that free markets and democracy make it more likely. Free markets are not a panacea; they don’t work overnight, but in the long run that’s the way poor countries become rich is through the combination of free markets and democracy. AMY CHUA: If it were possible that free market policies and free trade policies could lift the entire country out of poverty, then you wouldn’t have the problems I’m talking about. That has never happened. WILLIAM EASTERLY: I think it has happened. It’s happened in Korea, Taiwan, Singapore, Hong Kong. AMY CHUA: And those are all countries without a market dominant ethnic minority. WILLIAM EASTERLY: Well, Professor Chua, let’s not throw out the baby with the bath water. I think democracy and free markets and free trade and privatization is the best hope for these countries to become richer.
