Roberts, Mark, Tybout, Jim, 1997. The decision to export in Colombia: an empirical model of entry with sunk costs. American Economic Review, 545– 564 (September). Tchesnekova, Tatiana, 2004. Trade and Welfare in a Dynamic Model with Credit Constraints. Mimeo, Penn State University. Tirole, Jean, 1998. The Theory of Industrial Organization. MIT Press. Kala Krishna Economics Department, Pennsylvania State University, 0401 Kern Graduate Building, University Park, PA 16802 E-mail address: kmk4@email.psu.edu. Tel.: +1 814 865 1106; fax: +1 814 863 4775. doi:10.1016/j.jinteco.2004.08.004 In Defense of Globalization Jagdish Bhagwati, Oxford University Press, 2004 bDoes the world need yet another book on globalization?Q Bhagwati asks in the preface to this book, knowing full well that the answer is bNoQ. But luckily, this is not just another book on globalization; it’s better than most and deserves to displace some of the other books on the subject in bookstores and libraries. Bhagwati has performed a useful service for professional economists by marshalling the evidence in favor of globalization, even if anti- globalizers are not swayed by it. Preaching to the choir is no bad thing if not everyone has had the time to attend practice or if some are getting distracted by the cacophony of anti- globalization protests. The heart of the book consists of eight chapters in which Bhagwati argues that globalization—by which he has in mind, for the most part, international trade and foreign direct investment—has beneficial social effects: globalization reduces poverty, raises wages and labor standards in poor countries, betters the living conditions of children and women, improves the environment, nurtures respect for democratic norms and nourishes culture. Bhagwati’s argument for why globalization reduces poverty is a simple one: trade enhances growth and growth reduces poverty. To make the case for the first part of that proposition, Bhagwati uses historical analyses and a case-study approach, eschewing the econometric food fight on whether cross-country regressions show the effect of trade on growth. He notes that in the 1950s the conventional wisdom among economists and policymakers was that autarkic policies would be better for growth than an outward- oriented strategy. What changed minds, Bhagwati says, was the evidence from bfull- length studies of the trade and industrialization strategies of over a dozen major developing countriesQ undertaken under the auspices of the OECD and the NBER in the 1960s and 1970s. These studies bwere very substantial and examined several complex- ities that would be ignored in a simplistic regression analysis across a multitude of nations ... Only after systematic examination of the actual details of these countries’ experience could we judge whether trade liberalization had truly occurred and when.Q The Book reviews 544