Globalization, Poverty and Inequality: are the criticisms vague, vested, or valid?
Prepared for the NBER Pre-conference on Globalization, Poverty and Inequality October 24-25, 2003
By Emma Aisbett University of California at Berkeley This draft: September 20, 2003
Abstract: Lasting global economic integration is not the inevitable outcome of the process of globalization. Many alternative outcomes are possible, and many of these will be far less favorable to the poor. The best hope of achieving beneficial outcomes from globalization is to improve the quality of the dialog between participants on both sides of the debate. This paper contributes to this goal by explaining some of the reasons for the widely differing opinions of the impact of globalization on poverty and inequality in developing countries, and by suggesting ways in which researchers can better target their efforts towards allaying fears about globalization. It suggests that the public have more interest in poverty reporting based on total headcounts rather than poverty incidence, and which acknowledges non-monetary dimensions of poverty. In regard to inequality, statistics that focus on absolute gains from globalization and on income polarization are likely to have more resonance than statistics that attempt to summarize the shape of the income distribution.
1
Introduction
Economic globalization is a surprisingly controversial process. Surprising, that is, to the many economists and policy makers that believe it is the best means of bringing prosperity to the largest number of people all around the world. Under this belief, proponents of economic globalization have had a tendency to conclude that dissent and criticism is the result of ignorance or vested interest1. They argue that anti-sweatshop campaigners do not understand that conditions in the factories owned by multi-nationals tend to be better than those in comparable domestic firms in developing countries; that environmentalists... [continues]
Prepared for the NBER Pre-conference on Globalization, Poverty and Inequality October 24-25, 2003
By Emma Aisbett University of California at Berkeley This draft: September 20, 2003
Abstract: Lasting global economic integration is not the inevitable outcome of the process of globalization. Many alternative outcomes are possible, and many of these will be far less favorable to the poor. The best hope of achieving beneficial outcomes from globalization is to improve the quality of the dialog between participants on both sides of the debate. This paper contributes to this goal by explaining some of the reasons for the widely differing opinions of the impact of globalization on poverty and inequality in developing countries, and by suggesting ways in which researchers can better target their efforts towards allaying fears about globalization. It suggests that the public have more interest in poverty reporting based on total headcounts rather than poverty incidence, and which acknowledges non-monetary dimensions of poverty. In regard to inequality, statistics that focus on absolute gains from globalization and on income polarization are likely to have more resonance than statistics that attempt to summarize the shape of the income distribution.
1
Introduction
Economic globalization is a surprisingly controversial process. Surprising, that is, to the many economists and policy makers that believe it is the best means of bringing prosperity to the largest number of people all around the world. Under this belief, proponents of economic globalization have had a tendency to conclude that dissent and criticism is the result of ignorance or vested interest1. They argue that anti-sweatshop campaigners do not understand that conditions in the factories owned by multi-nationals tend to be better than those in comparable domestic firms in developing countries; that environmentalists... [continues]
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