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Globalization and Poverty

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  • Ann Harrison

Abstract

This essay surveys the evidence on the linkages between globalization and poverty. I focus on two measures of globalization: trade and international capital flows. Past researchers have argued that global economic integration should help the poor since poor countries have a comparative advantage in producing goods that use unskilled labor. The first conclusion of this essay is that such a simple interpretation of general equilibrium trade models is likely to be misleading. Second, the evidence suggests that the poor are more likely to share in the gains from globalization when there are complementary policies in place. Such complementary policies include investments in human capital and infrastructure, as well as policies to promote credit and technical assistance to farmers, and policies to promote macroeconomic stability. Third, trade and foreign investment reforms have produced benefits for the poor in exporting sectors and sectors that receive foreign investment. Fourth, financial crises are very costly to the poor. Finally, the collected evidence suggests that globalization produces both winners and losers among the poor. The fact that some poor individuals are made worse off by trade or financial integration underscores the need for carefully targeted safety nets.

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Bibliographic Info

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This book is provided by National Bureau of Economic Research, Inc in its series NBER Books with number harr06-1 and published in 2007.

Order: http://www.nber.org/books/harr06-1
Handle: RePEc:nbr:nberbk:harr06-1

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  1. James Levinsohn & Margaret McMillan, 2007. "Does Food Aid Harm the Poor? Household Evidence from Ethiopia," NBER Chapters, in: Globalization and Poverty, pages 561-598 National Bureau of Economic Research, Inc.
  2. Aisbett, Emma & Harrison, Ann & Zwane, Alix, 2006. "Globalization and poverty: what is the evidence?," MPRA Paper 36595, University Library of Munich, Germany.
  3. Pinelopi K. Goldberg & Nina Pavcnik, 2004. "Trade, Inequality, and Poverty: What Do We Know? Evidence from Recent Trade Liberalization Episodes in Developing Countries," NBER Working Papers 10593, National Bureau of Economic Research, Inc.
  4. Dollar, David & Kraay, Aart, 2001. "Trade, growth, and poverty," Policy Research Working Paper Series 2615, The World Bank.
  5. Xavier Sala-i-Martin, 2002. "The World Distribution of Income (estimated from Individual Country Distributions)," NBER Working Papers 8933, National Bureau of Economic Research, Inc.
  6. Kanbur, Ravi, 2001. "Economic Policy, Distribution and Poverty: The Nature of Disagreements," World Development, Elsevier, vol. 29(6), pages 1083-1094, June.
  7. Martin Ravallion, 2010. "Looking Beyond Averages in the Trade and Poverty Debate," Working Papers id:3258, eSocialSciences.
  8. Angus Deaton, 2005. "Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 1-19, February.
  9. Petia Topalova, 2005. "Trade Liberalization, Poverty, and Inequality: Evidence from Indian Districts," NBER Working Papers 11614, National Bureau of Economic Research, Inc.
  10. Agenor, Pierre-Richard, 2002. "Does globalization hurt the poor?," Policy Research Working Paper Series 2922, The World Bank.
  11. Francisco Rodriguez & Dani Rodrik, 2001. "Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 261-338 National Bureau of Economic Research, Inc.
  12. Xavier Sala-i-Martin, 2002. "The disturbing "rise" of global income inequality," Discussion Papers 0102-44, Columbia University, Department of Economics.
  13. Angus Deaton, 2000. "Counting the world’s poor: problems and possible solutions," Working Papers 212, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  14. Branko Milanovic & Lyn Squire, 2005. "Does Tariff Liberalization Increase Wage Inequality? Some Empirical Evidence," NBER Working Papers 11046, National Bureau of Economic Research, Inc.
  15. M. Ayhan Kose & Kenneth Rogoff & Eswar Prasad & Shang-Jin Wei, 2003. "Effects of Financial Globalization on Developing Countries," IMF Occasional Papers 220, International Monetary Fund.
  16. Jorge F. Balat & Guido Porto, 2005. "Globalization and Complementary Policies: Poverty Impacts in Rural Zambia," NBER Working Papers 11175, National Bureau of Economic Research, Inc.
  17. Ann Harrison, 2006. "Globalization and Poverty," NBER Working Papers 12347, National Bureau of Economic Research, Inc.
  18. Anne O. Krueger, 1983. "Trade and Employment in Developing Countries, 3: Synthesis and Conclusions," NBER Books, National Bureau of Economic Research, Inc, number krue83-1.
  19. International Monetary Fund, 2004. "Once Again, is Openness Good for Growth?," IMF Working Papers 04/135, International Monetary Fund.
  20. Chor-ching Goh & Javorcik, Beata S., 2005. "Trade protection and industry wage structure in Poland," Policy Research Working Paper Series 3552, The World Bank.
  21. Ravallion, Martin, 2004. "Competing concepts of inequality in the globalization debate," Policy Research Working Paper Series 3243, The World Bank.
  22. Timothy Besley & Robin Burgess, 2003. "Halving Global Poverty," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 3-22, Summer.
  23. Ann Harrison & Gordon Hanson, 1999. "Who Gains from Trade Reform? Some Remaining Puzzles," NBER Working Papers 6915, National Bureau of Economic Research, Inc.
  24. Gordon H. Hanson, 2007. "Globalization, Labor Income, and Poverty in Mexico," NBER Chapters, in: Globalization and Poverty, pages 417-456 National Bureau of Economic Research, Inc.
  25. Emma Aisbett, 2005. "Why are the Critics so Convinced that Globalization is Bad for the Poor?," NBER Working Papers 11066, National Bureau of Economic Research, Inc.
  26. Ann Harrison & Jason Scorse, 2010. "Multinationals and Anti-sweatshop Activism," American Economic Review, American Economic Association, vol. 100(1), pages 247-73, March.
  27. Jagdish Bhagwati, 2002. "Trade and Poverty in the Poor Countries," American Economic Review, American Economic Association, vol. 92(2), pages 180-183, May.
  28. L. Alan Winters & Neil McCulloch & Andrew McKay, 2004. "Trade Liberalization and Poverty: The Evidence So Far," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 72-115, March.
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