New Views of Trade and Sustainable Development

Using Sen’s Conception of Development to Re-Examine the

Debates

Introduction How do we currently conceive of

development?

What is Sen’s conception of development?

How does Sen’s conception impact on trade and SD debates?

What policy options?

Trade & Environment: Two current models

Trade as great destroyer– Scale, direct and regulatory impacts

Trade as saviour– Liberalization = growth = improvements

Trade and Sustainable Development

A better framework than trade and environment, because:– Politically: allows dialogue– Morally: recognizes poverty-growth needs– Instrumental: neither economy nor

environment can go it alone

Have We Got it Right?

Too much research on trade and sustainable development relies on the implicit linkage:– Liberalization = economic growth = (if we

are careful) environmental improvement

Sen’s Concept: Development as Freedom

Individuals as agents of social change “Greater freedom enhances the ability of

people to help themselves and also to influence the world.”

Types of Freedom Political freedoms/civil rights (e.g., free speech,

elections) Economic facilities (e.g., opportunities for

participating in trade and production, access to credit) Social opportunities (e.g., socially provided education

and health facilities) Transparency guarantees (e.g., openness in

government and business) Protective security (e.g., social safety net)

Development as Freedom

Each individual has a capability set: the set of desirable things that they are able to achieve.

Function of both processes (institutions) and opportunities.

Development as Freedom

Development aims to expand the capacity of individuals through the

provision of freedoms.

Incomes and Markets

Disposable income greatly expands the capability set, but is not development (is a rich slave content?)

Poverty as lack of choices, abilities to fulfill needs. Wealth only one avenue.

The Role of Environment

Environment is also an important constituent of well-being.– Resource base– Environmental services– Degradation is freedom-inhibiting: health

problems, disasters.

Trade and Sustainable Development

Liberalization is one element Too often placed higher in priority than

other important development goals Domestic institutions are important as

complements

Institutions for Trade (Rodrik)

Property rights Market regulatory institutions Macroeconomic stabilization Social insurance/safety net Conflict management/rule of law

Sustainable Development Through Trade

What are trade’s impacts on domestic institutions? (research, capacity important)

Impacts on other freedoms is important (regulatory impact, priority and sheer cost)

Policy Options

Better tailored liberalization Linkages between WTO and other

organizations

Conclusions

For environment: only one of a set of relevant concerns

For trade: understand non-economic impacts; focus on strengthening institutions

For TKN: broaden scope of analysis