This paper draws an important distinction between two types of effects of openness on equity: those of international economic integration on income distribution, and those on the effectiveness of domestic redistributive policies. Since the last ones ultimately affect also income distribution (and thus the first effects, broadly understood, include the second), and given that the chapter deals mostly with international trade effects, it will be useful to reformulate the paper's questions as follows: What are the effects of more open trade policies on income distribution, given an otherwise intact policy regime? What are the effects on income distribution operating through induced changes in the policy regime? Thus formulated, the two questions are clearly different: a more open trade regime may have little direct effect on wages and employment while, at the same time, by enhancing the negative effects of, say, an exogenous increase in wages on employment, it reduces the effectiveness of labor market policies. This outcome may then lead to their abandonment (institutional convergence at the bottom) with potentially adverse effects on income distribution within a large number of countries that go well beyond the initial effects of greater openness.

In his review of theoretical approaches, Stanford complains that the second question has not been answered in the mainstream literature on the effects of international economic integration. I agree and would add that it has not been asked. The focus there has been on the direct effects.