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RE: British IT workers want Indians to go home



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IPI_Marker

Ashish,

I think you have misunderstood my response.

First, I was indicating that access to technology is an important condition
for either absolute or conditional convergence. I was not directly
associating
this with opening up markets, though the link is certainly there.

Second, opening up markets is all very fine, but if access to US and EU
markets is denied in sectors like agriculture and textiles, open markets are
not very useful to India. While  foreign countries can export to India,
unless
the US and EU open up their markets to us, how do you envision an increase
in
exports to those countries?

Finally, transaction costs do inhibit free trade, but there is an argument
for
social insurance in the transition process. I don't imply that this is any
thing like the subsidization and transfer payments system that India
currently
has, but social insurance (as argued by Dani Rodrik) could potentially play
a
powerful role in increasing the receptiveness to free trade.

Kartik Ramachandran


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