1 - Introduction

Summary

This volume, in honour of a great development economist and esteemed friend and colleague, Prema-Chandra Athukorala (hereafter “Chandra”), examines two of the most important, interrelated phenomena of the twenty-first century: the rise of the Asian economies and the inexorable process of global economic integration. In this chapter, we first provide an introduction to the key issues examined in the chapters that follow. Next, we provide a sketch of the life and times of Chandra, and his intellectual contributions, including especially his contributions to the issues examined in this book. Finally, we summarize and integrate the diverse and illuminating contributions to the volume.

AN OVERVIEW OF THE ISSUES

Virtually every dimension of globalization is increasing — the flow of goods, services, and capital across borders; the movement of people; and the dissemination of technologies, ideas, and cultures. Increasingly, porous borders and rapid technological change have popularized the notion of the “death of distance” (Cairncross 1997). The rise of Asia, as the most dynamic region in the global economy over the past half century, is central to this process. Most of the exceptionally high-growth economies over this period have been located in Asia, principally East Asia (Commission on Growth and Development 2008). The outcomes have been transformative, for people's lives, for regional and global architecture, and for the intellectual foundations of development theories.

Both theory and empirics clearly demonstrate that, on balance, globalization is a force for good, especially for the countries that open up to the global economy, but also for consumers in export destinations enjoying the resultant increased welfare. The standard “triangles” analysis in static trade theory indicates that countries benefit from specializing in the production of goods and services in which they have a comparative advantage. The dynamic advantages of a more open economy are arguably more important still, through opening up to technology flows, the power of demonstration effects, the discipline of import competition, and much else. Empirically also there is a great deal of research concluding that, ceteris paribus, more outward-oriented economies do grow faster in the long run (Bhagwati 2007).