The debate on whether trade leads to inequality is old and far from settled. A new addition to this debate demonstrates that the effect of trade openness on income inequality differs depending on the development level of countries. The authors of the study, Florian Dorn, Clemens Fuest and Niklas Potrafke, find that trade openness doesn't explain income inequality in a sample of 139 advanced and developing countries. Trade openness decreased income inequality within emerging and developing economies on an average. But it raised inequality in China and the transition economies of the Eastern European countries. The authors argue that the welfare states and labor market institutions in transition countries were less developed than many advanced countries. Hence, the rapid growth of these countries, as a result of trade openness, could not be accompanied with equal distribution, explain the authors.