During the last three decades, developing countries have made enormous strides in opening up their protected domestic markets to international trade and foreign investment. Yet most countries have not simply opened up their markets. They have also instituted a range of policies to encourage...

Critics of globalization claim that firms are being driven to shift employment abroad by the prospects of cheaper labor. Yet the evidence for this, beyond anecdotes, is slim. In this article, we review evidence on whether firms that do business in foreign countries are substituting foreign for...

This paper uses Indonesian data to analyze the impact of foreign ownership on wages. After controlling for worker and firm characteristics, we find that foreign firms pay a wage premium, which is larger for skilled relative to unskilled workers.

Since last fall, President Obama has repeatedly declared that manufacturing jobs are coming back to America. In this article, however, we suggest that the return of U.S. manufacturing is still more promise than reality.In particular, while the recent increase in natural gas exploration and...

We identify a new set of stylized facts on the 2008-2009 trade collapse using detailed dis-aggregated data for the European Union, Brazil, Indonesia, and the United States. In particular, we decompose the fall in international trade into product entry and exit, price changes, and quantity...

In recent years, economists and other social scientists have devoted extensive research efforts to understanding the widening wage gap between high-skill and low-skill workers. This paper focuses on a slightly different question: how has globalization affected the relative share of income going...

Drawing on the experience and academic research of the 1990s, this chapter identifies five lessons: • Openness to trade has been a central element of successful growth strategies. In all countries that have sustained growth the share of trade in gross domestic product (GDP) has increased, and...

This paper provides an overview of the history of development research at the World Bank and points to new future directions in both what we research and how we research. Six main messages emerge. First, research and data have long been essential elements of the Bank’s country programs and its...

This is a review of the recent book on industrial policy edited by Cimoli, Dosi, and Stiglitz.

Many developing countris now actively solicit foreign investment, offering income tax holidays, import duty exemptions, and subsidies to foreign firms. One reason for subsidizing these firms is the positive externalities as foreign technology is transferred from foreign to domestic firms. This...