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Healthy Trade: The Relationship Between Open Trade and Health

Author

Listed:
  • Philip Stevens

    (Philip Stevens, Executive Director, Emerging Markets Health Network, Kuala Lumpur, Malaysia. Email: philip@cgwg.co.uk)

  • Jasson Urbach

    (Jasson Urbach, Research Fellow, Free Market Foundation of Southern Africa, Johannesburg, South Africa.)

  • Gabrielle Wills

    (Gabrielle Wills, Independent researcher and economist, Johannesburg, South Africa.)

Abstract

A recurrent theme of the academic literature and wider public discourse is that free trade is bad for health as it promotes economic inequality and insecurity, polluting the environment and making processed foods more widely available. Such views are also widely promulgated by international policymaking organizations such as the World Health Organisation (WHO). However, there has been little empirical evidence to support these assertions, in particular the relationship between free trade and health. This is an important relationship, as it tells us more about the effect of economic policies on human welfare than bald statistics relating to GDP. This study aims to build on a nascent literature by examining the relationship between free trade and health, using a range of data relating to trade openness and human development. Our analysis finds that free trade does in fact appear to be associated with better health outcomes, with the relationship particularly pronounced for lower-income countries. There are two mechanisms that might be responsible for this relationship. On the one hand, trade promotes economic growth, which in turn provides greater sums for individuals to improve their living conditions and for authorities to spend on public health measures such as sanitation and universal vaccination. Another mechanism is ‘knowledge spillover’, wherein international trade increases the global diffusion of both knowledge and products that improve health—ranging from the basics of germ theory to modern pharmaceuticals and medical devices.

Suggested Citation

  • Philip Stevens & Jasson Urbach & Gabrielle Wills, 2013. "Healthy Trade: The Relationship Between Open Trade and Health," Foreign Trade Review, , vol. 48(1), pages 125-135, February.
    • Handle: RePEc:sae:fortra:v:48:y:2013:i:1:p:125-135
    DOI: 10.1177/001573251204800106
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    References listed on IDEAS

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    Cited by:

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    2. Oded Shenkar & Guoyong Liang & Rakefet Shenkar, 2022. "The last frontier of globalization: Trade and foreign direct investment in healthcare," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(2), pages 362-374, March.
    3. Zhao, Jun & Dong, Kangyin & Taghizadeh-Hesary, Farhad, 2023. "Is income inequality a stumbling block to the global natural gas market?," Energy Economics, Elsevier, vol. 118(C).
    4. Md Samsul Alam & Md Shahidul Islam & Syed Jawad Hussain Shahzad & Shazia Bilal, 2021. "Rapid rise of life expectancy in Bangladesh: Does financial development matter?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 4918-4931, October.
    5. Dierk Herzer, 2017. "The Long-run Relationship Between Trade and Population Health: Evidence from Five Decades," The World Economy, Wiley Blackwell, vol. 40(2), pages 462-487, February.
    6. Yahyaoui Ismahene, 2022. "Infectious Diseases, Trade, and Economic Growth: a Panel Analysis of Developed and Developing Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(3), pages 2547-2583, September.
    7. Wang, Jianlong & Wu, Haitao & Liu, Yong & Wang, Weilong, 2024. "Health welfare in the digital era: Exploring the impact of digital trade on residents' health," Economics & Human Biology, Elsevier, vol. 54(C).
    8. Oyelade, Aduralere Opeyemi & Maku, Olukayode Emmanuel & Oladimeji, Akinfemi, 2021. "Does Trade in Medical Products Improve Health Outcomes in Nigeria? A Macro-Level Analysis," African Journal of Economic Review, African Journal of Economic Review, vol. 10(1), December.
    9. Marson, Marta & Migheli, Matteo & Saccone, Donatella, 2022. "Free to Die: Economic Freedoms and Influenza Mortality," Department of Economics and Statistics Cognetti de Martiis. Working Papers 202210, University of Turin.
    10. Yiping Sun & Chengjun Wu & Xiaoming Zhu & Pingguan Bian, 2022. "China’s Accession to the WTO as a Shock to Residents’ Health—A Difference-in-Difference Approach," IJERPH, MDPI, vol. 19(22), pages 1-18, November.
    11. Muhammad Shahbaz & Muhammad Shafiullah & Mantu K. Mahalik, 2019. "The dynamics of financial development, globalisation, economic growth and life expectancy in sub‐Saharan Africa," Australian Economic Papers, Wiley Blackwell, vol. 58(4), pages 444-479, December.
    12. Jacob Novignon & Yaw Boateng Atakorah & Gbetoton Nadege Djossou, 2018. "How Does the Health Sector Benefit from Trade Openness? Evidence from Sub‐Saharan Africa," African Development Review, African Development Bank, vol. 30(2), pages 135-148, June.
    13. Tonmoy Chatterjee & Kausik Gupta, 2015. "Health Care Quality and Finite Changes of Trade Policy," Foreign Trade Review, , vol. 50(1), pages 21-30, February.
    14. Chatterjee, Tonmoy & Dinda, Soumyananda, 2022. "What Determines the Health Status in Developing Countries? Evidence From a Dynamic Panel," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 47(4), pages 1-37, December.
    15. Marson, Marta & Migheli, Matteo & Saccone, Donatella, 2023. "Free to die: Economic freedoms and influenza mortality," Economics & Human Biology, Elsevier, vol. 49(C).
    16. Chong Hui Ling & Khalid Ahmed & Rusnah Muhamad & Muhammad Shahbaz & Nanthakumar Loganathan, 2017. "Testing the Social Cost of Rapid Economic Development in Malaysia: The Effect of Trade on Life Expectancy," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 130(3), pages 1005-1023, February.
    17. Zhizhong Liu & Qianying Chen & Guangyue Liu & Xu Han, 2022. "Do Deep Regional Trade Agreements Improve Residents’ Health? A Cross-Country Study," IJERPH, MDPI, vol. 19(21), pages 1-16, November.
    18. Chatterjee, Tonmoy & Dinda, Soumyananda & Chatterjee, Nilendu & Teame, Ghirmai Tesfamariam, 2024. "Trade Liberalization’s Influence on Health Status in Developing Economies: Theoretical Insights and Real-World Implications," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 49(3), pages 1-31, September.
    19. Md. Samsul Alam & Syed Ali Raza & Muhammad Shahbaz & Qaisar Abbas, 2016. "Accounting for Contribution of Trade Openness and Foreign Direct Investment in Life Expectancy: The Long-Run and Short-Run Analysis in Pakistan," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(3), pages 1155-1170, December.

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    More about this item

    Keywords

    Commerce; international cooperation; income; economic development; public health; risk factors; international trade; globalization; health policy; pharmaceutical preparations/supply and distribution; developing countries; knowledge spillovers; technology transfers; F10; O15; I10; I11; I18;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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