April 11, 2023 Policy Paper – FRIBIS Winter School Global imbalances and Universal Basic Income: Thoughts on inequality and “Real Freedom for All” Joaquín Baliña*, Fabienne Hansen**, Tobias Jaeger***, and Jeeeun Jang**** Why should we pay attention to international gaps in social protection? The imbalances of the global system have been a long-lasting issue analyzed by many scholars, recently with particular attention to diverse aspects of the asymmetric relations among countries and regions. This research tradition goes back to the dependency theory that emerged between the 1950s and 1970s as a response to the modernization theory, a dominant grand theory on growth and development. While the modernization theory anticipated economic convergence of the world if underdeveloped countries followed a westernized- oriented path towards development (Rostow, 1990), the dependency theory found the core cause of underdevelopment of the periphery not within inherent features but rather in the external structure: their economic dependency on the center (Prebisch and Cabañas, 1949; Cardoso and Faletto, 1996). Wallerstein's world-system theory (1987, 2005), on the same line, highlights significant impacts of the hierarchical global structure, although his conception of the semi-periphery leaves open the possibility for underdeveloped countries to achieve economic growth. This approach has steadily developed further in recent research towards attempts to multidimensionally analyze the global imbalances issues between Global North/South (De Sousa Santos, 2009). The international imbalances are generally explained by the way countries and regions are caught up within the global structures of production and consumption. They are relatively well reported in terms of manufacturing, international trade, and average consumption of goods and services. However, the other side of the coin – how well-being and social protection are produced and distributed – often seems to be overlooked. The distinction between center-periphery, developed- underdeveloped, and Global North/South in this context means that they have primarily unequal resources and capabilities to provide appropriate social protection, and this is strongly conditioned by economic factors. Furthermore, this inequality leads to unequal social protection systems. These imbalances can also be analyzed by taking into consideration how countries responded to COVID- 19 in a bid to tackle the socioeconomic consequences of the pandemic and the role of cash transfers. While rich countries mostly relied on the resiliency of labor markets and social security systems’ responses to provide a safety net, when combined with direct cash transfer measures, in the case of Latin America, for example, public responses were focused on the social protection system and constrained by the previous social and economic conditions of each country and the resources available (CEPAL, 2022; Gentilini, 2022). This is the case, for example, of the Auxilio Emergencial in Brazil or the Ingreso Familiar de Emergencia in Argentina as these measures were implemented during the pandemic to provide social protection mainly to people with precarious insertion in the labor markets and vulnerable living conditions. This clearly shows how global imbalances are directly linked to social security and social protection measures oriented to promote well-being, such as universal basic income (UBI) proposals. Taking the above-mentioned into consideration, this document argues that even UBI will not work as effectively as it should as long as these global imbalances remain as they are. In fact, this could even produce further imbalances in terms of social protection production and distribution.