Question

One argument in the debate surrounding globalization is about the inequality between developed and developing nations. Explain how reduced barriers to trade and investment might help reduce this inequality.

Answer 1

Reducing barriers to trade would benefit the developing countries specially. This would result in lower comsumption prices, increase in exports, reaching economies of scale easily. Hence, the developing nations benefit dearly through this kind of free trade, and it remains relatively easy for these nations to reach the levels of developed countries, thus striking an equality. While in the case of investment barriers, the developing nations would slow down investments in the economy owing to the presence of barriers, and this results in a slower economic growth than other developed countries, as GDP growth is slowed down. Thus, reducing said barriers, would directly affect economic growth.