Globalization and the challenge for developing countries
Rsearch on the sources of growth shows several factors to be relevant to all countries, rich or poor. Whether developing countries can substantially raise per capita incomes depends on policies that address these variables: labor, human capital, capital investment in research and development, technological progress, and the increase in total factor productivity arising from scale economies, the effects of agglomeration, externalities, and institutions that secure rights and minimize transaction costs. The author argues that a comprehensive approach to globalization, managed, and abetted by good policies, can magnify the effects of growth-promoting measures. Among his observations: 1) Returns from investment in skills are much greater in a more technologically advanced and integrated economy. 2) Trade, by enlarging markets, reinforces those gains, and the option to migrate further augments the value of skills. The growing worldwide gap in income between skilled and unskilled workers suggests how much more fruitful skills are under globalization. 3) A 50 percent increase (or even a doubling) in growth rates demands a vast amount of capital, embodying modern technology and the knowledge needed to put it to best use. The international economy can be a source of such capital. 4) Openness, combined with spatially neutral domestic policies and the scaling back of regulatory constraints on domestic business activities, can unleash the full force of agglomeration economies and networking externalities, allowing industrial clusters to emerge in metropolitan regions. 5) Openness is also the best way for low-income countries to tap into technologies that will galvanize agriculture (low-income countries'economic center) and manufacturing activities and nourish indigenous technological advance. 6) No research convincingly makes the case for delaying openness or for sequencing the various elements of openness. A good case can be made for embracing all the key elements of globalization at the same time--while sequencing (where needed) the pace of integration in such areas as trade and finance.
|Date of creation:||30 Jun 2001|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
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.:
- Gaspar, Jess & Glaeser, Edward L., 1998.
"Information Technology and the Future of Cities,"
Journal of Urban Economics,
Elsevier, vol. 43(1), pages 136-156, January.
- Jess Gaspar & Edward L. Glaeser, 1996. "Information Technology and the Future of Cities," Harvard Institute of Economic Research Working Papers 1756, Harvard - Institute of Economic Research.
- Jess Gaspar & Edward Glaeser, 1996. "Information Technology and the Future of Cities," NBER Working Papers 5562, National Bureau of Economic Research, Inc.
- Schmutzler, Armin, 1999. " The New Economic Geography," Journal of Economic Surveys, Wiley Blackwell, vol. 13(4), pages 355-79, September.
- Andrea Lamorgese, 1999.
"City size, diversification, and income smoothing,"
National Institute Economic Review,
National Institute of Economic and Social Research, vol. 170(1), pages 99-105, October.
- Thompson, Susan J. & Tadlock Cowan, J., 2000. "Globalizing Agro-Food Systems in Asia: Introduction," World Development, Elsevier, vol. 28(3), pages 401-407, March.
- Paul Winters & Alain De Janvry & Elisabeth Sadoulet & Kostas Stamoulis, 1998. "The role of agriculture in economic development: Visible and invisible surplus transfers," Journal of Development Studies, Taylor & Francis Journals, vol. 34(5), pages 71-97.
- Rafael La Porta & Florencio Lopezde-Silanes & Andrei Shleifer, 2000.
"Government Ownership of Banks,"
NBER Working Papers
7620, National Bureau of Economic Research, Inc.
- Rafael La Porta & Florencio Lopez-deSilanes & Andrei Shleifer, 2000. "Government Ownership of Banks," Harvard Institute of Economic Research Working Papers 1890, Harvard - Institute of Economic Research.
- La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei, 2001. "Government Ownership of Banks," Working Paper Series rwp01-016, Harvard University, John F. Kennedy School of Government.
- Levine, Ross, 1996.
"Financial development and economic growth : views and agenda,"
Policy Research Working Paper Series
1678, The World Bank.
- Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
- J. Vernon Henderson, 2000. "The Effects of Urban Concentration on Economic Growth," NBER Working Papers 7503, National Bureau of Economic Research, Inc.
- James E. Rauch, 2001. "Business and Social Networks in International Trade," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1177-1203, December.
- Krueger, Anne O, 1997.
"Trade Policy and Economic Development: How We Learn,"
American Economic Review,
American Economic Association, vol. 87(1), pages 1-22, March.
- Anne O. Krueger, 1997. "Trade Policy and Economic Development: How We Learn," NBER Working Papers 5896, National Bureau of Economic Research, Inc.
- Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
- Thomas W. Hertel & Bernard M. Hoekman & Will Martin, 2002. "Developing Countries and a New Round of WTO Negotiations," World Bank Research Observer, World Bank Group, vol. 17(1), pages 113-140.
- Foster, Andrew D & Rosenzweig, Mark R, 1996.
"Technical Change and Human-Capital Returns and Investments: Evidence from the Green Revolution,"
American Economic Review,
American Economic Association, vol. 86(4), pages 931-53, September.
- Mark Rosenzweig & Andrew D. Foster, . "Technical Change and Human Capital Returns and Investments: Evidence from the Green Revolution," Home Pages _065, University of Pennsylvania.
- Krugman, Paul & Elizondo, Raul Livas, 1996.
"Trade policy and the Third World metropolis,"
Journal of Development Economics,
Elsevier, vol. 49(1), pages 137-150, April.
- HÃ©lÃ¨ne Poirson, 2000. "Factor Reallocation and Growth in Developing Countries," IMF Working Papers 00/94, International Monetary Fund.
- Feinstein, Charles, 1999. "Structural Change in the Developed Countries during the Twentieth Century," Oxford Review of Economic Policy, Oxford University Press, vol. 15(4), pages 35-55, Winter.
- repec:sae:niesru:v:170:y::i:1:p:99-105 is not listed on IDEAS
- Bernard, Andrew B. & Bradford Jensen, J., 1999.
"Exceptional exporter performance: cause, effect, or both?,"
Journal of International Economics,
Elsevier, vol. 47(1), pages 1-25, February.
- Andrew B. Bernard & J. Bradford Jensen, 1997. "Exceptional Exporter Performance: Cause, Effect, or Both?," NBER Working Papers 6272, National Bureau of Economic Research, Inc.
- Bernard, A., 1997. "Exceptional Exporter Performance: Cause, Effect, or Both?," Working papers 97-21, Massachusetts Institute of Technology (MIT), Department of Economics.
- De Gregorio, Jose & Edwards, Sebastian & Valdes, Rodrigo O., 2000.
"Controls on capital inflows: do they work?,"
Journal of Development Economics,
Elsevier, vol. 63(1), pages 59-83, October.
- De Grauwe, Paul, 2000. "Controls on Capital Flows," Journal of Policy Modeling, Elsevier, vol. 22(3), pages 391-405, May.
- Jeffrey A. Frankel, 2000. "Globalization of the Economy," NBER Working Papers 7858, National Bureau of Economic Research, Inc.
- Markusen, James R. & Venables, Anthony J., 1999.
"Foreign direct investment as a catalyst for industrial development,"
European Economic Review,
Elsevier, vol. 43(2), pages 335-356, February.
- James R. Markusen & Anthony J. Venables, 1997. "Foreign Direct Investment as a Catalyst for Industrial Development," NBER Working Papers 6241, National Bureau of Economic Research, Inc.
- Martin Brockerhoff, 1999. "Urban Growth in Developing Countries: A Review of Projections and Predictions," Population and Development Review, The Population Council, Inc., vol. 25(4), pages 757-778.
- Daniel K.N. Johnson & Robert E. Evenson, 2000. "How Far Away Is Africa? Technological Spillovers to Agriculture and Productivity," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 743-749.
- J. E. Stiglitz, 1999. "Introduction," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 28(3), pages 249-254, November.
- McMichael, Philip, 2000. "A Global Interpretation of the Rise of the East Asian Food Import Complex," World Development, Elsevier, vol. 28(3), pages 409-424, March.
- repec:sae:niesru:v:170:y::i:1:p:87-98 is not listed on IDEAS
- N. F. R. Crafts, 1998.
"East Asian Growth Before and After the Crisis,"
IMF Working Papers
98/137, International Monetary Fund.
- N. F. R. Crafts, 2000. "Globalization and Growth in the Twentieth Century," IMF Working Papers 00/44, International Monetary Fund.
- Andres Rodriguez-Clare, 1996. "The role of trade in technology diffusion," Discussion Paper / Institute for Empirical Macroeconomics 114, Federal Reserve Bank of Minneapolis.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:2618. 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: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.