The economics literature increasingly recognizes the importance of migration. In this paper, a bilateral global migration model is developed to investigate the impact of lifting restrictions on the movement of labour. Quotas on skilled and unskilled labour in the developed economies are increased by 3% of their labour forces, with the additional labour supplied by developing economies. This paper improves upon the previous work of Walmsley and Winters (2005). A critical weakness of the previous work was that it was unable to capture the impacts of specific bilateral migration flows or liberalizations between countries. This paper uses a bilateral global migration model that exploits migration data obtained from Parsons, Skeldon, Winters, and Walmsley (2007) that allow the model to account for bilateral migration flows. The results confirm that restrictions on migration impose significant costs on nearly all countries, with the modest liberalization increasing global GDP by US$ 288 billion. All of the developed (labour importing) economies gain in terms of real incomes. While results differ across the developing (labour exporting) economies, most gain as a result of the higher remittances sent home.

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This chapter is a sequel to work I conducted recently with Pedro Martins on the costs of doing business in small economies (Winters and Martins 2004, 2005). Somewhat to my surprise, this research, based on specially collected data, showed that, ceteris paribus, manufacturing and tourism faced significantly higher business costs in small isolated economies than elsewhere. It would be absurd to proclaim the estimates we produced to be unassailable, but their size and the fairly thorough review they received in the November 2004 issue of the World Trade Review leave me convinced that they are qualitatively correct.The next question, therefore, is what should we-and they-do about these excess costs? That is the issue taken up in this chapter. It discusses international trade policy, industrial policy, governance and government for small isolated economies, and trade preferences, aid and migration as responses by the international community. There appear to me to be no easy solutions for the small countries themselves, but there certainly are helpful steps that many could take on trade policy and governance. For the world community, I do not see how we can avoid ultimately talking about migration. THE COSTS OF SMALL SIZEThe starting point for this study is the results of Winters and Martins' (2004, 2005) studies showing that the private costs of manufacturing activity are considerably higher for small economies than for larger ones.

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The breakdown of the WTO negotiations under the Doha Development Agenda has inspired critics to highlight the lack of effort on the part of rich countries to reform their agricultural policies. In this paper, we focus instead the poverty impacts of developing country tariff cuts-particularly those in agriculture. We argue that the Doha Development Agenda is fundamentally less poverty-friendly than it could be-in large part due to the absence of tariff cuts on staple food products in developing countries. Such cuts would give the poor access to food at world prices, thereby reducing the cost of living at the poverty line. We also explore the contention that such tariff cuts will hurt the poor working in agriculture. Based on our analysis of the impacts of multilateral trade policy reforms on a sample of fifteen developing countries, we find there is some evidence of poverty increases in agriculture. However, such effects are minimized by ensuring that agricultural tariffs are cut in all developing countries. Overall, the povertyreducing impact of lower food prices dominates; we conclude that the Doha Development Agenda would be more poverty friendly if it were to include deeper cuts in developing country agricultural tariffs.