Does globalization hurt the poor?

By P. Agénor. 2002

256 citations recorded by the source corpus.

Abstract.This paper examines analytically and empirically the extent to which globalization affects the poor in developing countries. I begin with a description of various channels through which trade openness and financial integration may have an adverse effect on poverty. I also stress the possible non-linearities involved – possibilities that have been seldom recognized in the existing literature. I then present cross-country regressions that relate measures of real and financial integration to poverty. The regressions control for changes in income per capita, as well as various other macroeconomic and structural variables, such as inflation, changes in the real exchange rate and the terms of trade, and schooling indicators. I use both individual indicators of trade and financial openness, and a “globalization index” based on principal components analysis, and test for both linear and nonlinear effects. The results suggest the existence of an inverted U-shape relationship between globalization and poverty. At low levels, globalization appears to hurt the poor; but beyond a certain threshold, it seems to reduce poverty – possibly because it brings with it renewed impetus for reform. Thus, globalization may hurt the poor not because it went too far, but rather because it did not go far enough.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/a71103f31de80fc71ad588bd8ca9319e21d7a906

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Citations in the corpus

Does Globalisation Worsen Environmental Quality in Developed Economies? (2018, background): “Globalization leads to a greater integration of economies and societies (Agénor, 2004). Heckscher (1919) and Ohlin (1933) argue that ‘trade is the main engine that provides an innovative”
Financial Development and Income Inequality: Is There Any Financial Kuznets Curve in Iran? (2014, result): “This result is against with the findings of Agenor (2003) which shows that there is an inverted U-shaped relationship between globalization and poverty, Lindert and Williamson (2001) and Heshmati (2004) which could not determine U-shaped relationship between income inequality and globalization. Lowe”
Globalization and Poverty in Senegal: A Worst Case Scenario? (2011, unknown): “Keywords: trade, FDI, poverty, vertical coordination, modern supply chains JEL: F2, J43, O12, Q12, Q17 Corresponding author: Miet.Maertens@econ.kuleuven.be 1”
Globalization and Poverty: An Introduction (2005, background): “Aggregate poverty could move in one 4 Possibly the only exception to these general conclusions is Agenor (2002b), who finds that that poverty increased in countries more open to trade.”
Channels and Policy Debate in the Globalization-Inequality-Poverty Nexus (2006, background): “40 In addition, Agenor (2002) refers to a separate output effect, through which trade liberalization may have an inverted J-curve effect on poverty.”