Bhagwati, Jagdish
Bhagwati, Jagdish 1934-
Jagdish Bhagwati was born and raised in India. He went to Cambridge University in 1954 and graduated from there in 1956 with a first in Economics Tripos (Tripos refers to the system of honors degrees and examinations at Cambridge). He then studied at the Massachusetts Institute of Technology (MIT) and Oxford, returning to India in 1961 as professor of economics at the Indian Statistical Institute in New Delhi. In 1963, he moved to the Delhi School of Economics as professor of international trade. He visited Columbia University during 1966–1967 and joined the permanent faculty of MIT in 1968, where he later became the Ford International Professor of Economics. In 1980, Bhagwati joined Columbia as Arthur Lehman Professor of Economics and Professor of Political Science. In 2001, he became a University Professor at Columbia University.
Bhagwati has served as economic policy adviser to the director-general of the General Agreement on Tariffs and Trade (GATT) (1991–1993), as special adviser to the United Nations (UN) on Globalization (2001), and as an external adviser to the World Trade Organization (WTO). He also recently served as a member of UN secretary-general Kofi Annan’s advisory group on New Partnership in Africa’s Development (NEPAD) and was a member of the Eminent Persons Group on the future of the UN Conference on Trade and Development (UNCTAD).
Bhagwati has published more than 300 articles and fifty volumes. He is regarded as one of the foremost international trade theorists of his generation. His very first article, “Immiserizing Growth: A Geometrical Note,” published in the Review of Economic Studies in 1958, is regarded a classic and spawned a large body of literature. In it, he showed that growth that expanded a country’s export sector could so drastically worsen its terms of trade as to actually lower its real income and welfare.
Bhagwati’s most influential scientific contribution is “Domestic Distortions, Tariffs, and the Theory of Optimum Subsidy” (1963), written jointly with V. K. Ramaswami. This paper was written at a time when the relevant analytic literature was characterized by ambivalence with respect to the superiority of trade over autarky. It had been pointed out that when domestic distortions such as unionized wage or externalities existed, there was no guarantee that free trade would be superior to autarky. Bhagwati and Ramaswami demonstrated that once an appropriate policy was adopted to eliminate the existing distortion, the case for free trade was restored. They also introduced the idea of policy ranking. In the context of the wage-distortion model, they showed that from a welfare perspective, wage subsidy was the first best instrument, followed by output subsidy and tariff in that order.
Subsequently, Bhagwati led the way in numerous areas of research, including brain drain, illegal international trade, noneconomic objectives and optimal policy interventions, directly unproductive profit-seeking (DUP) activities, nonequivalence of tariffs and quotas, and preferential versus multilateral trade liberalization. He coauthored many of the contributions in these and other areas with T. N. Srinivasan of Yale University. The two together also wrote the influential book Foreign Trade Regimes and Economic Development: India.
Currently, Bhagwati is the foremost advocate of free trade. His critics have sometimes argued that he only cares about free trade and does not pay social issues such as labor and environmental standards, income equality, and the gender gap the importance they deserve. Yet such criticisms are the result of a superficial reading of his writings. In his recent celebrated book In Defense of Globalization (2004), he carefully dissects all of the important and controversial social issues and advocates their promotion rather than playing them down in favor of free trade. Where he differs from his critics is in the use of trade protection or trade sanctions as instruments for achieving these objectives. Instead, he advocates the use of multiple instruments to achieve multiple objectives. Thus, for example, he recommends using the instrumentality of the International Labour Organization and nongovernmental organizations to promote labor standards and the World Trade Organization to promote trade liberalization.
SEE ALSO Brain Drain; Free Trade; Immiserizing Growth; International Nongovernmental Organizations (INGOs); Nongovernmental Organizations (NGOs); Protectionism; World Trade Organization
BIBLIOGRAPHY
Bhagwati, Jagdish. 1971. The Generalized Theory of Distortions and Welfare. In Trade, Balance of Payments and Growth: Papers in International Economics in Honor of Charles P. Kindleberger, eds. Jagdish Bhagwati, R. W. Jones, R. A. Mundell, and J. Vanek, 69–90. Amsterdam: North-Holland.
Bhagwati, Jagdish. 1988. Protectionism. Cambridge, MA: MIT Press.
Bhagwati, Jagdish. 2004. In Defense of Globalization. New York: Oxford University Press.
Bhagwati, Jagdish, and V. K. Ramaswami. 1963. Domestic Distortions, Tariffs, and the Theory of Optimum Subsidy. Journal of Political Economy 71 (1): 44–50.
Bhagwati, Jagdish, and T. N. Srinivasan. 1982. The Welfare Consequences of Directly Unproductive Profit-Seeking (DUP) Lobbying Activities: Price versus Quantity Distortions. Journal of International Economics 13 (1–2): 33–44.
Arvind Panagariya