New Debates Over Service Outsourcing to China and India

This paper surveys recent literature on service outsourcing from developed to less developed countries, focusing on the debate initiated by Paul Samuelson s 2004 Journal of Economic Perspectives paper, and exploring both the theoretical literature and empirical evidence. We find that, while the theoretical literature and the public discourse are fraught with controversy, the empirical evidence is very clear: service outsourcing is (still) not a very large part of any country s economy, and appears to yield net gains to those countries that participate in it