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Do the poor benefit from globalization regardless of institutional quality?

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  • Andreas Bergh
  • Irina Mirkina
  • Therese Nilsson

Abstract

Despite significant progress towards the Millennium goals, more than one billion people live on less than 1.25 US dollars per day. Previous research suggests that globalization stimulates poverty reduction, but does not investigate what role institutions play in this relationship. Theoretically, globalization could act as either a complement or a substitute to institutional quality in reducing poverty. We find that the poverty-reducing effect of globalization is stronger when institutions are weak. In particular, increasing social globalization reduces poverty more when corruption is high and democratic accountability is low. Thus, globalization has the power to reduce poverty even in countries with low institutional quality.

Suggested Citation

  • Andreas Bergh & Irina Mirkina & Therese Nilsson, 2016. "Do the poor benefit from globalization regardless of institutional quality?," Applied Economics Letters, Taylor & Francis Journals, vol. 23(10), pages 708-712, July.
    • Handle: RePEc:taf:apeclt:v:23:y:2016:i:10:p:708-712
    DOI: 10.1080/13504851.2015.1102835
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    References listed on IDEAS

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    1. Bergh, Andreas & Nilsson, Therese, 2014. "Is Globalization Reducing Absolute Poverty?," World Development, Elsevier, vol. 62(C), pages 42-61.
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    Cited by:

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    3. Walker Wright, 2020. "How trade openness can help to ‘deliver the poor and needy’," Economic Affairs, Wiley Blackwell, vol. 40(1), pages 100-107, February.

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