IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/12347.html
   My bibliography  Save this paper

Globalization and Poverty

Author

Listed:
  • 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.

Suggested Citation

  • Ann Harrison, 2006. "Globalization and Poverty," NBER Working Papers 12347, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:12347
    Note: ITI
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w12347.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ann Harrison, 2007. "Globalization and Poverty," NBER Books, National Bureau of Economic Research, Inc, number harr06-1, September.
    2. 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.
    3. Anne O. Krueger, 1983. "Trade and Employment in Developing Countries, Volume 3: Synthesis and Conclusions," NBER Books, National Bureau of Economic Research, Inc, number krue83-1, September.
    4. 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.
    5. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314, World Scientific Publishing Co. Pte. Ltd..
    6. Kanbur Ravi, 2001. "Economic Policy, Distribution and Poverty: The Nature of Disagreements," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 7(2), pages 1-26, April.
    7. 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..
    8. Branko Milanovic & Lyn Squire, 2007. "Does Tariff Liberalization Increase Wage Inequality? Some Empirical Evidence," NBER Chapters, in: Globalization and Poverty, pages 143-182, National Bureau of Economic Research, Inc.
    9. Chor-ching Goh & Beata S. Javorcik, 2007. "Trade Protection and Industry Wage Structure in Poland," NBER Chapters, in: Globalization and Poverty, pages 337-372, National Bureau of Economic Research, Inc.
    10. 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.
    11. 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.
    12. Pierre-Richard Agénor, 2004. "Does globalization hurt the poor?," International Economics and Economic Policy, Springer, vol. 1(1), pages 21-51, March.
    13. 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.
    14. repec:imf:imfops:220 is not listed on IDEAS
    15. International Monetary Fund, 2004. "Once Again, is Openness Good for Growth?," IMF Working Papers 2004/135, International Monetary Fund.
    16. Ravallion, Martin, 2004. "Competing concepts of inequality in the globalization debate," Policy Research Working Paper Series 3243, The World Bank.
    17. Harrison, Ann & Hanson, Gordon, 1999. "Who gains from trade reform? Some remaining puzzles," Journal of Development Economics, Elsevier, vol. 59(1), pages 125-154, June.
    18. Jorge F. Balat & Guido G. Porto, 2007. "Globalization and Complementary Policies: Poverty Impacts on Rural Zambia," NBER Chapters, in: Globalization and Poverty, pages 373-416, National Bureau of Economic Research, Inc.
    19. David Dollar & Aart Kraay, 2004. "Trade, Growth, and Poverty," Economic Journal, Royal Economic Society, vol. 114(493), pages 22-49, February.
    20. Timothy Besley & Robin Burgess, 2003. "Halving Global Poverty," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 3-22, Summer.
    21. Petia Topalova, 2007. "Trade Liberalization, Poverty and Inequality: Evidence from Indian Districts," NBER Chapters, in: Globalization and Poverty, pages 291-336, National Bureau of Economic Research, Inc.
    22. Aisbett, Emma & Harrison, Ann & Zwane, Alix, 2006. "Globalization and poverty: what is the evidence?," MPRA Paper 36595, University Library of Munich, Germany.
    23. Francisco Rodríguez & 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.
    24. Jagdish Bhagwati, 2002. "Trade and Poverty in the Poor Countries," American Economic Review, American Economic Association, vol. 92(2), pages 180-183, May.
    25. Xavier Sala-i-Martin, 2001. "The disturbing 'rise' of global income inequality," Economics Working Papers 616, Department of Economics and Business, Universitat Pompeu Fabra, revised Apr 2002.
    26. Ravallion, Martin, 2006. "Looking beyond averages in the trade and poverty debate," World Development, Elsevier, vol. 34(8), pages 1374-1392, August.
    27. 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.
    28. Lee, Ha Yan & Ricci, Luca Antonio & Rigobon, Roberto, 2004. "Once again, is openness good for growth?," Journal of Development Economics, Elsevier, vol. 75(2), pages 451-472, December.
    29. Ann Harrison & Jason Scorse, 2010. "Multinationals and Anti-sweatshop Activism," American Economic Review, American Economic Association, vol. 100(1), pages 247-273, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ann Harrison & Margaret McMillan, 2007. "On the links between globalization and poverty," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(1), pages 123-134, April.
    2. Giordano, Paolo & Li, Kun, 2013. "An Updated Assessment of the Trade and Poverty Nexus in Latin America," IDB Publications (Working Papers) 4209, Inter-American Development Bank.
    3. 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.
    4. Aisbett, Emma & Harrison, Ann & Zwane, Alix, 2006. "Globalization and poverty: what is the evidence?," MPRA Paper 36595, University Library of Munich, Germany.
    5. Cagé, Julia, 2009. "Growth, Poverty Reduction and Governance in Developing Countries: a Survey," CEPREMAP Working Papers (Docweb) 0904, CEPREMAP.
    6. Ann Harrison, 2007. "Globalization and Poverty: An Introduction," NBER Chapters, in: Globalization and Poverty, pages 1-32, National Bureau of Economic Research, Inc.
    7. Nissanke, Machiko & Thorbecke, Erik, 2006. "Channels and policy debate in the globalization-inequality-poverty nexus," World Development, Elsevier, vol. 34(8), pages 1338-1360, August.
    8. Paolo Giordano & Kun Li, 2012. "An Updated Assessment of the Trade and Poverty Nexus in Latin America," IDB Publications (Working Papers) 79119, Inter-American Development Bank.
    9. Pranab Bardhan, 2006. "Globalization, Inequality, and Poverty," IDB Publications (Working Papers) 9126, Inter-American Development Bank.
    10. Brian, McCaig, 2011. "Exporting out of poverty: Provincial poverty in Vietnam and U.S. market access," Journal of International Economics, Elsevier, vol. 85(1), pages 102-113, September.
    11. Le Goff, Maelan & Singh, Raju Jan, 2013. "Does trade reduce poverty ? a view from Africa," Policy Research Working Paper Series 6327, The World Bank.
    12. Thierry Verdier, 2005. "Intégration commerciale « socialement responsable » : une approche en termes d'économie politique," Revue d’économie du développement, De Boeck Université, vol. 13(4), pages 55-121.
    13. repec:idb:brikps:72378 is not listed on IDEAS
    14. Philippe Aghion & Robin Burgess & Stephen J. Redding & Fabrizio Zilibotti, 2008. "The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India," American Economic Review, American Economic Association, vol. 98(4), pages 1397-1412, September.
    15. Harrison, Ann & Rodríguez-Clare, Andrés, 2010. "Trade, Foreign Investment, and Industrial Policy for Developing Countries," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4039-4214, Elsevier.
    16. Adriaan Kalwij & Arjan Verschoor, 2005. "A Decomposition of Poverty Trends Across Regions: the Role of Variation in the Income and Inequality Elasticities of Poverty," WIDER Working Paper Series RP2005-36, World Institute for Development Economic Research (UNU-WIDER).
    17. Naranpanawa, Athula & Bandara, Jayatilleke S. & Selvanathan, Saroja, 2011. "Trade and poverty nexus: A case study of Sri Lanka," Journal of Policy Modeling, Elsevier, vol. 33(2), pages 328-346, March.
    18. Arne Wiig, 2009. "Aid for trade: A misdirected initiative?," CMI Working Papers 4, CMI (Chr. Michelsen Institute), Bergen, Norway.
    19. Charles Ackah, & Oliver Morrissey, & Simon Appleton, 2007. "Who Gains from Trade Protection in Ghana? A Household-Level Analysis," Discussion Papers 07/02, University of Nottingham, CREDIT.
    20. Dario DEBOWICZ, 2010. "Real Financial Models in Argentina," EcoMod2010 259600044, EcoMod.
    21. Robert Mullings & Aruneema Mahabir, 2016. "Growth by Destination: The Role of Trade in Africa’s Recent Growth Episode," NBS Discussion Papers in Economics 2016/01, Economics, Nottingham Business School, Nottingham Trent University.

    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:12347. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.