Policy Papers ⁽³⁶⁾

Read paper I offer a systematic analysis of the ills of the top civil service in India and suggest how it should be reformed. The key element in the reform is the exposure of the service to competition by introducing systematic lateral entry. I draw upon the the British and New Zealand experiences in this area. [The article was published in Yojana, a publication of the Planning Commission brought out in 14 Indian languages.]

Read paper Testimony to the U.S.- China Economic and Security Review Commission's hearing on the panel "China and the Future of Globalization." Several fallacious arguments against free trade were made in the debate on outsourcing that raged during the last U.S. presidential election.I consider and reject four of these arguments: (i) the conventional case for free trade does not apply to outsourcing; (ii) productivity gains abroad in the goods exported by us undermine the case for free trade; (iii) the free flow of many factors internationally renders the principle of comparative advantage and the associated gains from trade invalid; and (iv) soon all jobs will be outsourced to China and India.

Read paper (Foreign Affairs, September-October 2004). Review Essay on Why Globalization Works by Martin Wolf. Having lost some ground in the 1990s, today, advocates of globalization are gaining the upper hand again. Bhagwati's strikingly successful defense of open markets in his recent book In Defense of Globalization has been bolstered by another influential pro-globalization voice, that of Martin Wolf of the Financial Times. His ambitious new book, Why Globalization Works, offers a patient and persuasive refutation of many of the arguments most frequently marshaled by critics of trade liberalization.

Read paper (with Jagdish Bhagwati and T. N. Srinivasan--forthcoming in the Journal of Economic Perspectives) Critics have muddled the public debate over outsourcing by using the term interchangeably to refer to altogether different phenomena such as on-line purchase of services, direct foreign investment and, sometimes, all imports. We define outsourcing explicitly as the services trade at arm's length (the so-called Mode 1 services in the WTO terminology), conducted principally via the electronic mediums such as the telephone, fax and Internet. Under this definition, the total number of the U.S. jobs outsourced annually is minuscule and is expected to remain so over the next decade, even on a gross basis (i.e., without adjusting for the jobs in-sourced from the U.S.). The fears that offshore outsourcing will lead to high-value jobs being replaced by low-value jobs down the road are also argued here to be implausible in view of several qualitative arguments to the contrary. We also demonstrate that offshore outsourcing of Mode 1 services raises no new analytical issues, contrary to what many fear. Thus, it leads to gains from trade…

Read paper The paper offers a detailed overview of the workings of the WTO history, functions and agreements.