Stretching Your Global Mindset

Extracted 28JUL2011 from

12:55 PM Thursday July 28, 2011 by Pankaj Ghemawat

...collective prosperity depends on the extension — as opposed to contraction — of cooperation, trust, and sympathy across borders and distances.

...More systematic research shows that bilateral trust decreases with geographic, linguistic, religious, genetic, and somatic distance (measured by an index of body type differences) as well as with income differences and a history of wars — findings that hit on all four dimensions of my CAGE framework (Cultural, Administrative, Geographic, and Economic), with particular focus on the cultural dimension. And levels of trust influence more than just whom you're inclined to lend to, to bail out in a crisis. Moving from lower to higher levels of bilateral trust has been shown to increase trade, direct investment, portfolio investment, and venture capital investment by 100% or more, even after controlling for other characteristics of a pair of countries.

...Based on weighted per-person averages for fourteen developed OECD economies, national governments spend 30,000 times as much helping each domestic poor person as each poor foreigner.