Does Globalization Help or Hurt the World’s Poor?
Author(s)
Bardhan, Pranab
Abstract
The expansion of international trade and investment is one of the dominant trends of our time, but policymakers and advocates tend to discuss it without carefully examining the evidence available in social science. Because the modern era of globalization has coincided with a sustained reduction in the proportion of people living in extreme poverty, one may conclude that globalization, on the whole, is not making the poor poorer. Equally, however, it cannot take much credit for the decrease in poverty, which in many cases preceded trade liberalization. Countries that get the economic basics right–improving infrastructure, ensuring political stability, carrying out land reform, providing social safety nets, addressing market failures such as impeded access to credit–tend to succeed at reducing poverty. Although globalization can help, it is only one factor among many.
