Globalizing good policy

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Globalization's critics argue that a more open world economy sets off a race to the bottom by encouraging countries to jettison protections for consumers, workers and the environment. In reality, the opposite is true. If our data demonstrate anything, it is that globalization prompts a race to the top by pushing countries to abandon policies that burden their economies in favor of those that fuel growth and economic opportunity...

So, do our statistics show that globalization is necessarily the cause of good policies? That would be overstating it — our data simply show the two trends are complementary.... The chicken-and-egg debate shouldn't detract from the fundamental fact that globalization and good policies go together.

That is the president and chief economist of the Dallas Fed, who discuss globalizing good governance (alternate link). [Full disclosure: I once worked for Mr. Fisher.] See a related chart. (Ht to Passport, the new FP Magazine blog)

Update 1: More on the op-ed and a case study from Greg Mankiw.

Update 2: The full report, 'Racing to the Top: How Global Competition Disciplines Public Policy.' Via Robert Lawson.

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