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Poverty Consequences of Globalisation in OIC Countries: A Comparative Analysis


  • M. Tariq Majeed

    (Department of Economics, Quiad-i-Azam University, Islamabad.)


This study examines the impact of globalisation on cross-country poverty using a new comparable panel data set for developing countries over a long period 1970-2008. The main findings of the study are: First, openness to trade exerts adverse effects on poverty in all sample developing countries while FDI helps in reducing poverty only in OIC countries. Second, growth elasticity of poverty is negative and significant in all countries; however, the growth elasticity of poverty is high in the case of OIC countries. Third, inflation adversely affects poverty in all sample countries. Fourth and finally, the role of government is insignificant in OIC countries while it is robustly significant with a negative sign in Non-OIC countries. Thus, government spending helps in reducing poverty only in Non-OIC countries. The overall results of this study indicate that globalisation accentuates not ameliorates poverty.

Suggested Citation

  • M. Tariq Majeed, 2012. "Poverty Consequences of Globalisation in OIC Countries: A Comparative Analysis," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 51(4), pages 479-492.
  • Handle: RePEc:pid:journl:v:51:y:2012:i:4:p:479-492

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    References listed on IDEAS

    1. David A. Grigorian & Hamid R Davoodi, 2007. "Tax Potential vs. Tax Effort; A Cross-Country Analysis of Armenia's Stubbornly Low Tax Collection," IMF Working Papers 07/106, International Monetary Fund.
    2. Agbeyegbe, Terence D. & Stotsky, Janet & WoldeMariam, Asegedech, 2006. "Trade liberalization, exchange rate changes, and tax revenue in Sub-Saharan Africa," Journal of Asian Economics, Elsevier, vol. 17(2), pages 261-284, April.
    3. Joshua Aizenman & Yothin Jinjarak, 2009. "Globalisation and Developing Countries - a Shrinking Tax Base?," Journal of Development Studies, Taylor & Francis Journals, vol. 45(5), pages 653-671.
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    5. Le, Tuan Minh & Moreno-Dodson, Blanca & Rojchaichaninthorn, Jeep, 2008. "Expanding taxable capacity and reaching revenue potential : cross-country analysis," Policy Research Working Paper Series 4559, The World Bank.
    6. Joweria M. Teera & John Hudson, 2004. "Tax performance: a comparative study," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(6), pages 785-802.
    7. Abhijit Sen Gupta, 2007. "Determinants of Tax Revenue Efforts in Developing Countries," IMF Working Papers 07/184, International Monetary Fund.
    8. Bird,Richard & Gendron,Pierre-Pascal, 2011. "The VAT in Developing and Transitional Countries," Cambridge Books, Cambridge University Press, number 9781107401440, March.
    9. Tehmina S. Khan & John Norregaard, 2007. "Tax Policy; Recent Trends and Coming Challenges," IMF Working Papers 07/274, International Monetary Fund.
    10. Dhaneshwar Ghura, 1998. "Tax Revenue in Sub-Saharan Africa; Effects of Economic Policies and Corruption," IMF Working Papers 98/135, International Monetary Fund.
    11. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
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    Cited by:

    1. Majeed, Muhammad Tariq & Malik, Muhammad Nauman, 2014. "Determinants of Household Poverty: Empirical Evidence from Pakistan," MPRA Paper 57744, University Library of Munich, Germany.

    More about this item


    Globalisation; Poverty; Inequality; FDI; OIC Countries;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity


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