Do Consumers in Developing Countries Gain or Lose from Globalization?



Drawing partly on the three previous chapters our main argument in this chapter will be that traditional consumption theory cannot serve as a framework for answering the question posed in the title because the theory cannot deal with the features of globalization that bear most tellingly on consumers in poor countries. More specifically, what we will describe is globalization as a process whose welfare effects on consumers are especially prone to the forms of uncertainty and disappointment that are assumed away in traditional demand theory.1 If one is to describe the actual gains and losses to consumers in developing countries from globalization, therefore, it is necessary to replace the assumptions of this theory with alternatives that describe reality more accurately. Before setting about this task, however, let us begin by examining how the assumptions of traditional demand theory preclude the possibility that consumers may experience feelings of frustration and disappointment, during acts of consumption that are undertaken because they are expected instead to yield satisfaction or utility.


Welfare Effect Welfare Loss Traditional Theory Consumption Behaviour Advertising Expenditure 
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Copyright information

© Jeffrey James 2000

Authors and Affiliations

  1. 1.Tilburg UniversityThe Netherlands

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