How Falling Barriers to Investment and Trade Reduce Inequality Between Nations

Globalization
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Institutional Affiliation
Globalization
Globalization has been responsible for the creation of millions of opportunities around the world, but a considerable gap exists between the wealthiest and the least developed countries. Furthermore, inequality within the most impoverished nations has been regarded as an ongoing problem, and evidence indicates that it is worsening (Birdsall, 2007). Experts such as Nancy Birdsall, the CGD president, has widely discussed the relation between economic development, globalization, and inequality. Nevertheless, scholars have examined how globalization and falling barriers to trade and investment can reduce inequality. Dabla-Norris and Duval (2016) say that reducing trade barriers can play an essential role in promoting growth and productivity across the globe. There are essential points of the inequality between nations, and reduced barriers to investment and trade can help reduce this inequality.
First, studies have shown that reducing trade barriers and policies that limit foreign direct investment (FDI) can significantly improve output and productivity. Although there have been several obstacles towards eliminating trade barriers, recent agreements are creating new promises. For instance, the Trans-pacific Partnership (TPP) agreement was signed between Japan, the U.S., and ten other Pacific Rim nations (Dabla-Norris & Duval, 2016). Furthermore, the Transatlantic Trade Investment Partnership (TTIP) was signed between Europe and the U.S. Policymakers believe that these agreements will improve growth and productivity, and this will ultimately reduce the level of inequality.
Second, understanding the way globalization has created diverse economic pressure would be essential in reducing the level of inequality. Experts are typing to discover what kind of pressures are caused by globalization, and operation of these pressures in the cu...