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Extra resources for A Globalist Manifesto for Public Policy (Occasional Paper, 124)

Sample text

But one local manufacturer – Legend – was spurred forward by the need to compete. In response to foreign competition, in 1994 Legend developed a new business strategy based on, first, reducing costs – by focusing on its core business and shedding its distribution channels, and by importing components from abroad – and second, pursuing its comparative advantage by providing novel, customised PC products that targeted the special needs of Chinese computer purchasers. Legend’s imported components are often designed in co-ordination with foreign producers, who have certain technological advantages but lack Legend’s ability to gauge the needs of Asian purchasers.

While it is certainly logically possible to argue that good institutions are merely a luxury chosen by the wealthy, history shows that, in fact, good institutions preceded and made possible economic development. To what extent has globalisation been associated with economic development and institutional reform? Our review of history from the medieval period up until the early nineteenth century showed that reaching outward was essential to the process of initial European economic development. Similarly, numerous econometric studies of the relationship between late nineteenthand early twentieth-century globalisation of markets by Kevin O’Rourke, Jeffrey Williamson and others find important effects on economic growth from participating in global markets for commodities, labour and capital.

30 a globalist manifesto for public policy A lord in search of new wealth and power was encouraged to co-operate rather than coerce as a means of expanding his power. That pattern would reappear. Exploration and conquest, and technological improvements in navigation and weaponry, owed their origins to political competition. But private gains were an inevitable result. Those private gains took the form of trading or mineral rights granted to merchants or explorers, and land grants to colonists in America during the seventeenth and eighteenth centuries.

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