The name is absent

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estimates of the potential welfare effects of alternative negotiating options. While they consider CGE
modeling results as suggestive, they note that most of these models are comparative static in construction
and typically do not take into account adjustment costs and potential dynamic effects of liberalization on
productivity, flows of FDI, and changes in capital formation, all of which may be growth enhancing.
Granting these qualifications about the present state of the art in CGE modeling and taking into account
the lack of data on the trade barriers and domestic economic structure of most poor countries especially,
we consider it unlikely that the Stiglitz-Charlton first principle of using modeling focused on developing
country interests can be achieved in the short period of time to be covered by the Doha negotiations.

The Stiglitz-Charlton first and second principles appear to be a combination of the efficiency
criterion with an emphasis on the welfare gains to be assessed by modeling efforts together with an
application of the principle of distributive equity. The principle of distributive equity presumably enters
in by analyzing alternative negotiating options that are focused on enhancing developing country welfare.
But this fails to recognize that the criterion of efficiency is defective as a yardstick of fairness in the
global trading system. Equality of opportunity, not maximum benefit as defined in general equilibrium
analysis, is the condition that would collectively satisfy fairness, modified in some degree by recognition
of distributive equity. Gains in static welfare are affected by these arrangements but the optimization of
static welfare — or its distribution among countries — cannot be used to determine what a fair set of
arrangements should be.²⁰ Further, as we have argued, distributive equity in global trading arrangements
appears to make more sense if understood as a means of promoting development through the provision of
preferential treatment at home or abroad to the firms of poorer countries.

recently, Charlton and Stiglitz (2005) have set forth a narrower scope of the priorities that they recommend for the
Doha negotiations, with an emphasis on achieving greater market access for developing country exports.

²⁰ Srinivasan (2005) provides a critique of the various writings and proposals of Stiglitz and Charlton. As he notes
(p. 12): “...it is not obvious why the share of benefits from an agreement that accrues to poorer countries
necessarily has to rise for it to be fair.”

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