Does Globalization Hurt the Poor?

Agenor attempts to examine analytically and empirically the extent to which globalization affects the poor in low- and middle-income countries. He begins with a description of various channels through which trade openness and financial integration...

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Bibliographic Details
Main Author:	Agenor, Pierre-Richard
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	GLOBALIZATION TRADE LIBERALIZATION ECONOMIC INTEGRATION CROSS-COUNTRY EXPERIENCE REGRESSION ANALYSIS PER CAPITA INCOME GROWTH RATE INFLATION TAX REAL EXCHANGE RATE TERMS OF TRADE HEALTH INDICATORS EDUCATIONAL INDICATORS MACROECONOMIC SHOCKS FINANCIAL PERFORMANCE INDICATORS PRINCIPAL COMPONENTS ANALYSIS LAFFER CURVE POVERTY REDUCTION ACCOUNTING ADVERSE EFFECTS AGRICULTURAL PRODUCTS ASYMMETRIC INFORMATION AVERAGE GROWTH AVERAGE GROWTH RATE BANKING CRISIS CAPITAL ACCOUNT CAPITAL ACCOUNTS CAPITAL ACCUMULATION CAPITAL FLOWS CAPITAL GOODS CAPITAL INFLOWS CAPITAL MARKET CAPITAL MARKETS CAPITAL STOCK COMPARATIVE ADVANTAGE COMPETITIVE PRESSURES CONSTANT RETURNS TO SCALE COST OF CAPITAL COUNTRY REGRESSIONS CREDIT CONSTRAINT CREDIT CONSTRAINTS DEBT DEVELOPING COUNTRIES DIVERSIFICATION DOMESTIC BANKS ECONOMIC CRISES ECONOMIC GROWTH ECONOMIC POLICIES ECONOMICS ELASTICITY EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EMPIRICAL STUDIES EQUILIBRIUM EXCHANGE RATE EXPECTED UTILITY EXPORTS FINANCIAL CRISES FINANCIAL DEPTH FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL INTEGRATION FINANCIAL MARKETS FINANCIAL SERVICES FINANCIAL SYSTEMS FIXED COSTS FOREIGN BANKS FOREIGN DIRECT INVESTMENT FOREIGN FIRMS FREE TRADE GDP GROWTH RATES HUMAN CAPITAL IMPACT OF TRADE IMPACT OF TRADE LIBERALIZATION IMPERFECT COMPETITION IMPORT TARIFFS IMPORTS INCOME INCOME DISTRIBUTION INCREASE POVERTY INFLATION INTEREST RATE INTEREST RATES INTERMEDIATE GOODS INTERMEDIATE INPUTS INTERNATIONAL MARKETS INTERNATIONAL TRADE KNOWLEDGE SPILLOVERS LABOR FORCE LABOR INPUTS LABOR MARKET LEGISLATION LONG RUN LOW-INCOME COUNTRIES MACROECONOMIC INSTABILITY MACROECONOMIC VOLATILITY MARGINAL PRODUCT MARGINAL PRODUCTIVITY MARKET DISTORTIONS MARKET IMPERFECTIONS MARKET INTEGRATION MARKET LIBERALIZATION MARKET POWER MINIMUM WAGE OPEN TRADE REGIMES OUTPUT GROWTH PER CAPITA INCOMES POLICY RESEARCH POPULATION GROWTH POVERTY LINE POVERTY RATES POVERTY REDUCTION PRODUCERS PRODUCTION FUNCTION PRODUCTION TECHNOLOGY PRODUCTIVE RESOURCES PRODUCTIVITY REAL WAGES REDUCTION IN TARIFFS RELATIVE PRICE OF CAPITAL RELATIVE PRICE OF GOODS RELATIVE WAGE RESOURCE ALLOCATION RETURN ON CAPITAL RISK AVERSION SAVINGS SAVINGS RATES SKILLED WORKERS TECHNOLOGY TRANSFERS THEORETICAL MODELS TRADABLE GOODS TRADE FLOWS TRADE INTEGRATION TRADE LIBERALIZATION INCREASES TRADE OPENNESS TRADE POLICIES TRADE REFORM TRADE RESTRICTIONS TRADE UNIONS UNEMPLOYMENT UNILATERAL TRADE UNILATERAL TRADE LIBERALIZATION UNIT OF CAPITAL UNSKILLED LABOR UNSKILLED WORKERS VOLUME OF TRADE WAGE DIFFERENTIALS WAGE FLEXIBILITY WAGE GAP WEALTH WORLD MARKETS
Online Access:	http://documents.worldbank.org/curated/en/2002/10/2054539/globalization-hurt-poor http://hdl.handle.net/10986/19239

Description
Summary:	Agenor attempts to examine analytically and empirically the extent to which globalization affects the poor in low- and middle-income countries. He begins with a description of various channels through which trade openness and financial integration may have an adverse effect on poverty. However, the author also stresses the possible nonlinearities involved-possibilities that have seldom been recognized in the ongoing debate. Agenor then presents cross-country regressions that relate measures of real and financial integration to poverty. The regressions control for changes in income per capita and output growth rates, as well as various other macroeconomic and structural variables, such as the inflation tax, changes in the real exchange rate and the terms of trade, health and schooling indicators, and macroeconomic volatility. The author uses not only individual indicators of trade and financial openness but also a "globalization index" based on principal components analysis, and tests for both linear and nonlinear effects. The results suggest the existence of a nonmonotonic, Laffer-type 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. So, globalization may hurt the poor not because it went too far, but rather because it did not go far enough.

Does Globalization Hurt the Poor?

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