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Brookings Trade Forum 2004 (2004) 111-128

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[Article by Angus Deaton]

William Jack

Is globalization good for your health? This likely depends crucially on whether globalization increases your income and that of your fellow citizens. But even if it does not make you rich(er), globalization might make you healthier if it facilitates the speedier transfer and adoption of ideas and practices that lead to health improvements.

In his thoughtful review of a broad range of literature, Angus Deaton examines the impact of globalization on health, through a number of links. The first is the direct link that associates a larger volume of trade and interaction among nations with changes in health status. One obvious mechanism here is through the income channel, although this is not the only one. As the author notes, "Everything is easier with money," and staying healthy is no exception, although the link from income to health is a subtle one. With a nod to the notion that unequal societies might be less healthy, the paper examines the idea that globalization could be bad for population health if it leads to an increase in income inequality. Finally, the paper turns to what Deaton seems to consider the main avenue by which globalization can effect health, that is, through the transfer of knowledge and techniques. This represents a kind of globalization of public goods. But it begs the question of how the provision of such public goods might be affected when the benefits are spread more diffusely. If freeing up the transmission of knowledge and ideas makes the generation of new ideas less profitable, the full potential benefits of globalization will be realized only if institutions are developed to address the associated free-rider problems inherent in public good provision.

Freeing up the international movement of goods can also make it easier for diseases to be transmitted around the world, as the spread of severe acute [End Page 111] respiratory syndrome (SARS) in 2003 made clear. In fact, Deaton reminds us that trade and health have been historically linked, at least since the institution of quarantine regulations in seventeenth-century Italy.

Another example of the link between trade and changes in health status arises from the general equilibrium effects associated with relative price changes. Opening up trade in goods can lead to a shift in production processes that are accompanied by changes in environmental conditions and occupational choices, with associated changes in health status. Brazilian and Southeast Asian deforestation would be more limited without an international market for hardwoods, and South African mining accidents would likely be much rarer in the absence of the international gold trade.

Deaton recognizes that to noneconomists, globalization often means more than trade liberalization; it encompasses the perceived forced adoption by poor countries of economic policies such as privatization, structural adjustment, user fees, and certain provisions of the General Agreement on Trade in Services. Similarly, some of the critics of globalization see western tobacco companies and fast-food franchises as exporting health-damaging habits to the unsuspecting third world.

If gains from trade manifest themselves in higher average incomes, and if increases in incomes are linked to better health, then globalization can be expected to improve the health status of individuals living in countries that participate in the globalization process. Deaton notes that although average incomes did indeed increase over the 1980s and 1990s, the distribution of incomes within many countries widened, suggesting that some at the bottom of the distribution did not gain from globalization. However, the impressive growth in India and China meant that the distribution of world income actually became more equal.

What do these changes in incomes mean for health status? Money clearly matters in determining nutritional intake (mostly as a function of private expenditures) and for protection from disease (for which the provision of local public goods, such as water and sanitation services, are key determining factors). Both the cross-sectional and time series data suggest the impact of higher income on health status, as measured by life expectancy, is positive, but this effect diminishes at higher...


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pp. 111-128
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Archived 2012
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