There is precedent for this, unfortunately. The full implications of globalization have not received the attention they deserve. The globalization process makes it especially important to provide social safety nets for those members of society who are unable to insulate themselves from exogenous risks. In the more liberalized economies, governments have to shoulder major responsibilities in providing safeguards to help society cope with the impact of unemployment, disease, and old age. Of course not.
Economies plainly benefit from expanded international trade.
The problem is that certain members of society may end up bearing the brunt of the various risks involved, which they are ill-prepared to accept. As Dani Rodrik himself argued at the annual meetings of the IDB in Barcelona last March, social safety nets designed elsewhere in the world may not be suitable for Latin American countries. The task of designing new social institutions will call for an appropriate blend of imagination and common sense. The new institutions must not endanger fiscal stability or exacerbate labor market segmentation, for such developments give rise to far worse inequities that can prove intractably difficult to solve, as Latin American countries know from experience.