TITLE:
International Competition and Real Wages: The Role of Public Infrastructure and Environmental Policy
AUTHORS:
Craig Peter Stafford, Frank Peter Stafford
KEYWORDS:
International Trade, Environment, Sustainability
JOURNAL NAME:
Technology and Investment,
Vol.17 No.2,
March
18,
2026
ABSTRACT: Based on a form of Bergmann crowding or occupational exclusion model, in this paper we consider the role of infrastructure and environmental policy as they shape the productivity of trading partners that are both or all active in the same industry. The industry is subject to traditional technology change as a factor shaping the competitive productivity position of one country relative to another as defined by traditional measures of inputs, shaping costs to the firm and its near supply chain (c) and output. Productivity is also shaped by companion infrastructure (i) and environmental factors (d). Based on augmented productivity measures to include the effect of these public inputs leads to what may be termed full productivity of individual firms in the production of traditional economic goods and services. When one country improves its full productivity relative to others real wages or GDP of the world economy rises, but the improving country realizes more than 100 percent of the global wage gains. The discussion includes public environmental elements (p) which can serve as a beneficial infrastructural factor (i) or can be in the form of what can be called disamenties (d) such as environmental damage from pollution of air or water or deterioration of aesthetic features. Each of these can enhance full productivity of traditionally measured output of the firms or an economy. The effects of the factors (c), (i) and (d) can be local, regional or global. To illustrate, water pollution may increase full productivity of an industry and show up as good economic performance but may have local adverse impacts as well as unmeasured regional and hemispheric or global non-market costs, reducing overall well-being. We offer this work in honor of our friend George Johnson. We thank William J. Baumol and Paul A. Samuelson for encouraging work augmenting such international competition research and related applications such as occupational crowding and to a reviewer of an earlier draft for valuable suggestions.