"Is Trade Good for Your Health?"

Theory doesn't tell you what impact more liberal trading rules will have on public health.

Lower tariff and non-tariff barriers to trade may reduce the cost and increase the variety and quality of available health related goods and services.  Increased average incomes may increase the demand for those goods and services.  Ideas and best practice may spread with trade.  If trade creates profit opportunities, and stimulates investment and growth, it may contribute to increased incomes and increased demand for private and public health goods.  Increased foreign investments by multinationals may be associated with better working conditions.

But its also easy to see reasons for concern, especially in developing nations.  Reduced food prices might lower rural incomes while increasing urban incomes, leading to different health impacts in different regions.  Many developing countries depend on tariffs for a significant part of their government revenues.  Reduced tariffs may reduce the resources available to supply health related public goods.  Increased movement of persons, goods, ships, trucks, and planes, may facilitate the spread of communicable disease, invasive species such as malaria carrying mosquitos, or illegal drugs.  Smaller government revenue and increased movement of these unwanted trade "hitchhikers" could be a problem.  And what about increased availability of legal but unhealthy products, like tobacco?  Increased trade and associated production may have an adverse impact on the environment (like in China) and lead to unattractive health outcomes.

How do these different possibilities tend to work themselves out?  Ann Owen and Stephen Wu take a look in: Is Trade Good for Your Health? (Review of International Economics, September 2007).  Here's an older, but free, working paper version: Is Trade Good for Your Health? (2004).  They find, 

• increased openness to trade tends to be associated with lower infant mortality and increased life expectancies,
• the association is stronger in developing countries than in developed countries (the effect is "small and statistically insignificant" in developed countries),
• there is some evidence that knowledge transfers associated with trade may be important ("the effect of openness on health is stronger when trading partners are healthier"),
• there is some evidence that an underlying policy environment that favors a more open economy also may favor other measures associated with better health outcomes,
• more open economies tend to receive more foreign aid, and some types of aid appear to help.

Here's the abstract:

We use a panel of 219 countries to examine the relationship between a country’s openness to international trade and several health outcomes and find that, in general, increased openness is associated with lower rates of infant mortality and higher life expectancies, especially in developing countries. We find evidence suggesting that some of the positive correlation between trade and health can be attributed to knowledge spillovers. In addition, openness is associated with sound economic policies which themselves are related to better health outcomes.