Globalization and poverty: what is the evidence?
AbstractThis chapter reviews the evidence on the linkages between globalization and poverty, drawing on the collected works of Jagdish Bhagwati and the results of an National Bureau of Economic Research (NBER) project directed by Ann Harrison, Globalization and Poverty. We focus on two measures of global¬ization: trade integration (measured using tariffs or trade flows), and international capital flows. Many economists have used the Heckscher-Ohlin framework in international trade to argue that the unskilled or the poor in countries with a comparative advantage in unskilled labor are most likely to gain from trade reform. Our first conclusion is that such a simple interpretation of general equilibrium trade models is likely to be misleading. Second, the evidence discussed suggests that the poor are more likely to share in the gains from glob¬alization when there are complementary policies in place. Such complementary policies include programs to promote human capital development, infrastructure development, credit and technical assistance to farmers, and macroeconomic sta¬bility. Third, we find that trade and foreign investment reforms have produced benefits for the poor, particularly those in exporting sectors or sectors which 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 suggests the need for carefully targeted safety nets. We emphasize the heterogeneity of results across different countries and set¬tings, but also present cross-country evidence which suggests that the path from globalization to poverty reduction via the growth effects of trade reforms is likely to be important.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 36595.
Date of creation: 2006
Date of revision:
globalization; poverty; inequality; international trade;
Find related papers by JEL classification:
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- I3 - Health, Education, and Welfare - - Welfare and Poverty
- F1 - International Economics - - Trade
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Emma Aisbett, 2007. "Why are the Critics So Convinced that Globalization is Bad for the Poor?," NBER Chapters, in: Globalization and Poverty, pages 33-86 National Bureau of Economic Research, Inc.
- Ann Harrison, 2007.
"Globalization and Poverty,"
National Bureau of Economic Research, Inc, number harr06-1, December.
- Jorge F. Balat & Guido G. Porto, 2007.
"Globalization and Complementary Policies: Poverty Impacts on Rural Zambia,"
in: Globalization and Poverty, pages 373-416
National Bureau of Economic Research, Inc.
- 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.
- Xavier Sala-i-Martin, 2002.
"The world distribution of income (estimated from individual country distributions),"
0102-58, Columbia University, Department of Economics.
- Xavier Sala-i-Martin, 2002. "The world distribution of income (estimated from individual country distributions)," Economics Working Papers 615, Department of Economics and Business, Universitat Pompeu Fabra, revised May 2002.
- 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.
- James Levinsohn & Margaret McMillan, 2005.
"Does Food Aid Harm the Poor? Household Evidence from Ethiopia,"
NBER Working Papers
11048, National Bureau of Economic Research, Inc.
- 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.
- 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.
- Ann Harrison, 2006.
"Globalization and Poverty,"
NBER Working Papers
12347, National Bureau of Economic Research, Inc.
- Yang, Jun & Huang, Jikun & Rozelle, Scott & Martin, Will, 2012. "Where is the balance? Implications of adopting Special Products and Sensitive Products in Doha negotiations for world and China's agriculture," China Economic Review, Elsevier, vol. 23(3), pages 651-664.
- Paolo Giordano & Victoria Florez, 2008. "Una evaluación del vínculo entre comercio y pobreza en América Latina," IDB Publications 72378, Inter-American Development Bank.
- Ural Marchand, Beyza, 2011.
"Tariff Pass-Through and the Distributional Effects of Trade Liberalization,"
2011-22, University of Alberta, Department of Economics.
- Ural Marchand, Beyza, 2012. "Tariff pass-through and the distributional effects of trade liberalization," Journal of Development Economics, Elsevier, vol. 99(2), pages 265-281.
- Dinga, Marián & Münich, Daniel, 2010. "The impact of territorially concentrated FDI on local labor markets: Evidence from the Czech Republic," Labour Economics, Elsevier, vol. 17(2), pages 354-367, April.
- Paolo Giordano & Kun Li, 2012. "An Updated Assessment of the Trade and Poverty Nexus in Latin America," IDB Publications 79119, Inter-American Development Bank.
- Ann Harrison & Margaret McMillan, 2007. "On the links between globalization and poverty," Journal of Economic Inequality, Springer, vol. 5(1), pages 123-134, April.
- Arne Wiig, 2009. "Aid for trade: A misdirected initiative?," CMI Working Papers 4, CMI (Chr. Michelsen Institute), Bergen, Norway.
- McCleery, Robert K. & De Paolis, Fernando, 2008. "The Washington Consensus: A post-mortem," Journal of Asian Economics, Elsevier, vol. 19(5-6), pages 438-446.
- Kanbur, Ravi, 2007. "Poverty, Inequality and Conflict," Working Papers 126997, Cornell University, Department of Applied Economics and Management.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.