Globalization and the Political Benefits of the Informal Economy


Milner, Helen V., and Nita Rudra. 2015. “Globalization and the Political Benefits of the Informal Economy ”. International Studies Review 17 (4) : 664-669.
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Date Published:

2 Dec, 2015


Does global market integration help or hinder government efforts to improve the livelihoods of the world’s poorest citizens? Standard trade theories suggest that government interventions become less imperative as developing countries liberalize. This is because labor in developing economies is abundant and cheap; export products that utilize this factor of production will employ large populations of low-skilled workers who will experience increases in the purchasing power of their wage income. Consumption increases, and the country as a whole is better off. For several decades now, developing economies have embraced this rationale for free trade and its welfare-enhancing effects on the majority.

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