Changes in income inequality, as a result of increased openness, pose a risk to a society’s sense of social cohesion and may, indeed, strain the degree of social consensus as it pertains to interpersonal comparisons reflected in a nation’s class structure.  Loss of employment, for example, induced by a shift of resources from import-substitution to export promotion may cause an increase in income inequality which may undermine the sense of social consensus on the acceptable level of disparity within and between classes.  Alternatively, a depreciation of the domestic currency designed to improve the foreign trade balance may precipitate an increase in domestic inflation thereby undermining domestic purchasing power for specific classes and widening the degree of income disparity between classes.
            These risks to social cohesion or consensus cause certain societies to increase the level of government spending e.g. government purchases in order to minimize the degree of risk to social cohesion attributed to an increase in openness as a major engine of per capita income growth.  It is hypothesized that this likelihood of increasing government spending to minimize the risk to social cohesion is more pronounced for a society in the initial throes of export promotion e.g. export infancy or for a society seeking to reduce the level of prevailing import substitution.  These societies are often characterized by a high degree of income inequality and/or of class consciousness regarding income inequality and economic disparity.  In such an environment, the private sector’s ability to absorb the losses of employment associated with the structural downsizing of import-substitution are quite limited.  However, with export maturity, one predicts an increase in openness is associated with a much lower risk to social cohesion as income inequality is often declining over an extended time period.  Under such a scenario, the likelihood of increasing government spending to minimize the risk to social cohesion declines.  
                        Section II of this paper will review the pertinent literature on openness and income inequality from both traditional literature and literature of more recent vintage.  In addition, it will also review the recent literature of Rodrik (1996) and other as it pertains to the use of government purchases to offset or minimize the social risks linked to pursuit of a more global approach to economic growth.  In section III, the quadratic model of openness as it relates to explaining changes in income inequality and government spending will be provided.  In section IV, this model’s empirical parameters will be estimated utilizing OLS and time series data provided by the Penn World Table 6.2 for a cross-section of twenty countries.  In Section V, the empirical findings will be presented as regards estimated parameters while section VI will provide an analysis of the theoretical, empirical and public policy implications derived from the empirical findings.  Finally, in section VII, this paper will summarize its findings with an eye to providing meaningful suggestions for future research on this topic.