New Views of Trade and Sustainable Development Using Sen’s Conception of Development to Re-Examine the Debates

Introduction n How do we currently conceive of development? n What is Sen’s conception of development? n How does Sen’s conception impact on trade and SD debates? n What policy options?

Trade & Environment: Two current models n Trade as great destroyer –Scale, direct and regulatory impacts n Trade as saviour –Liberalization = growth = improvements

Trade and Sustainable Development n A better framework than trade and environment, because: –Politically: allows dialogue –Morally: recognizes poverty-growth needs –Instrumental: neither economy nor environment can go it alone

Have We Got it Right? nToo much research on trade and sustainable development relies on the implicit linkage: –Liberalization = economic growth = (if we are careful) environmental improvement

Sen’s Concept: Development as Freedom n Individuals as agents of social change n “Greater freedom enhances the ability of people to help themselves and also to influence the world.”

Types of Freedom n Political freedoms/civil rights (e.g., free speech, elections) n Economic facilities (e.g., opportunities for participating in trade and production, access to credit) n Social opportunities (e.g., socially provided education and health facilities) n Transparency guarantees (e.g., openness in government and business) n Protective security (e.g., social safety net)

Development as Freedom n Each individual has a capability set: the set of desirable things that they are able to achieve. n Function of both processes (institutions) and opportunities.

Development as Freedom n Development aims to expand the capacity of individuals through the provision of freedoms.

Incomes and Markets n Disposable income greatly expands the capability set, but is not development (is a rich slave content?) n Poverty as lack of choices, abilities to fulfill needs. Wealth only one avenue.

The Role of Environment n Environment is also an important constituent of well-being. –Resource base –Environmental services –Degradation is freedom-inhibiting: health problems, disasters.

Trade and Sustainable Development n Liberalization is one element n Too often placed higher in priority than other important development goals n Domestic institutions are important as complements

Institutions for Trade (Rodrik) n Property rights n Market regulatory institutions n Macroeconomic stabilization n Social insurance/safety net n Conflict management/rule of law

Sustainable Development Through Trade n What are trade’s impacts on domestic institutions? (research, capacity important) n Impacts on other freedoms is important (regulatory impact, priority and sheer cost)

Policy Options n Better tailored liberalization n Linkages between WTO and other organizations

Conclusions n For environment: only one of a set of relevant concerns n For trade: understand non-economic impacts; focus on strengthening institutions n For TKN: broaden scope of analysis