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Distributional and Poverty Consequences of Globalization: A Dynamic Comparative Analysis for Developing Countries

  • Muhammad Tariq Majeed
  • Ronald MacDonald

This study examines the impact of globalization on cross-country inequality and poverty using a panel data set for 65 developing counties, over the period 1970-2008. With separate modelling for poverty and inequality, explicit control for financial intermediation, and comparative analysis for developing countries, the study attempts to provide a deeper understanding of cross country variations in income inequality and poverty. The major findings of the study are five fold. First, a non-monotonic relationship between income distribution and the level of economic development holds in all samples of countries. Second, both openness to trade and FDI do not have a favourable effect on income distribution in developing countries. Third, high financial liberalization exerts a negative and significant influence on income distribution in developing countries. Fourth, inflation seems to distort income distribution in all sets of countries. Finally, the government emerges as a major player in impacting income distribution in developing countries.

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Paper provided by Business School - Economics, University of Glasgow in its series Working Papers with number 2010_22.

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Date of creation: Jun 2010
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Handle: RePEc:gla:glaewp:2010_22
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