Globalization, Poverty And Role Of Infrastructures

Alastaire Sèna ALINSATO

Abstract


The aim of this paper is to complement the theoretical and empirical literature on the globalization-poverty nexus. Based on a simple model of social welfare, the paper demonstrates that the different types of globalization have different effects on social welfare. The main empirical findings suggest that globalization contributes to poverty reduction but with a larger magnitude in the presence of infrastructures instruments. It follows that good quality of infrastructure is a necessary condition for a higher globalization effect on poverty reduction. The empirical evidence also supports the idea that globalization driven by the reduction in information access cost and the removal of barriers to their dissemination has the greatest impact on poverty reduction. Finally, the study discusses the economic policy implications and suggests in particular investment in adequate ICT and energy infrastructures for globalization to contribute significantly to the reduction of poverty.


Full Text:


References


Acemoglu, D., Johnson, S. and Robinson, J. A. (2001). ‘‘The Colonial Origins of Comparative Development: An Empirical Investigation”. American Economic Review 91: 1369-1401.

Addison T. and Heshmati, A. (2004). The New Global Determinants of FDI to Developing Countries, Research in Banking and Finance”, 4 pp151-186.

Agenor (2002). Does Globalization Hurt the Poor? Washington, DC: World Bank. September. Mimeo.

Albanesi, S., (2007). “Inflation and Inequality”. Journal of Monetary Economics. 54(4), 1088-1108.

Andres, R. A. (2006). “Software Piracy and Income Inequality,” Applied Economics Letters, 13, 101-105.

Arbia, G., Battisti, M., and di Vaio, G. (2010). “Institutions and geography: Empirical test of spatial growth models for European regions”. Economic Modelling, 27(1), 12-21.

Asongu, S. A.,(2013). Fighting corruption in Africa: do existing corruption-control levels matter. International Journal of Development Issues. 12(1), 36-52.

Balat, J. F., and Porto, G. G. (2007). Globalization and complementary policies: Poverty impacts on rural Zambia. In Globalization and Poverty (pp. 373-416). University of Chicago Press.

Bardhan, P. (2006). ‘‘Globalization, Inequality, and Poverty’’Paper presented at the Trade and Poverty in Latin America and the Caribbean workshop (IDB headquarters, 19 June 2006). Inter-Development American Bank.

Barro R. J. (1990), “Government Spending in a Simple Model of Endogenous Growth,” Journal of Political Economy, Vol. 98, pp 103-125.

Barro, R. (2007). “Inequality and Growth Revisited” Accessed November 2008. http://aric.adb.org/pdf/seminarseries/2007.10.26%20Barro%20presentation.pdf.

Benneth, O., (2007). “Fiscal policy and poverty reduction: some policy options for Nigeria”, African Economic Research Consortium, Aerc research Paper 164.

Bernstein, S., and Cashore, B. (2000). Globalization, four paths of internationalization and domestic policy change: the case of ecoforestry in British Columbia, Canada. Canadian Journal of Political Science/Revue canadienne de science politique, 33(01), 67-99.

Bhagwati, J., and Srinivasan, T. N. (2002). Trade and poverty in the poor countries. American Economic Review, 180-183.

Bigsten, A., and Durevall, D. (2003). ‘Globalization and Policy Effects in Africa’. World Economy, 16 (8): 1119-36.

Borgeraas, E. and Dahl, E. (2010) ‘Low income and ‘poverty lines’ in Norway: a comparison of three concepts’, International Journal of Social Welfare 19, 73-83.

Bourguignon, F. (2004), ‘The Poverty-Growth-Inequality Triangle’. Paper presented at the Indian Council for Research on International Economic Relations, New Delhi, 4 February.

Braumann, B. (2004). “High Inflation and Real Wages”. IMF Staff Papers, Vol. 51, No. 1, International Monetary Fund. Washington, D.C.

Bulir, A., (1998). “Income inequality: does inflation matter?” IMF Working Paper No. 98/7.

Cardoso, E. (1992). “Inflation and Poverty”. NBER Working Paper. No. 4006. Cambridge, MA.

Chaudhary, M. A., Ahmad, N., & Siddiqui, R. (1995). Money Supply, Deficit, and Inflation in Pakistan [with Comments]. The Pakistan Development Review, 945-956.

Chauhary, T. T. and Chaudhary, A. A. (2008). “The Effects of Rising Food and Fuel Costs.

Coleman, W. D., & Grant, W. P. (1998). Policy convergence and policy feedback: Agricultural finance policies in a globalizing era. European Journal of Political Research, 34(2), 225-247.

Collier P. and Dollar, D. (2001), “Can the world cut poverty in half? How policy reform and effective aid can meet international development goals”, World Development 29(11), 1787-1802.

Collier P. and Dollar, D. (2002), Aid allocation and poverty reduction, European Economic Review 46, 1475-1500.

Cornia G.A. and Court, J. (2001), Inequality, growth and poverty in the era of liberalization and globalization, Policy Brief No. 4, Helsinki: UNU/WIDER.

Davis, D. R., & Mishra, P. (2007). Stolper-Samuelson is dead: And other crimes of both theory and data. In Globalization and poverty (pp. 87-108). University of Chicago Press.

Dawson, J. (2007) ; The Empirical Institutions-Growth Literature: Is Something Amiss at the Top? Econ Journal Watch, Volume 4, Number 2, May 2007, pp 184-196.

Dollar, D., & Kraay, A. (2004). Trade, growth, and poverty*. The Economic Journal, 114(493), F22-F49.

Dollar, D., and Collier, P. (1999). Can the world cut poverty in half? How policy reform and effective aid can meet international development goals. How Policy Reform and Effective Aid Can Meet International Development Goals (November 1999). World Bank Policy Research Working Paper, (2403).

Dollar, D., and Kraay, A. (2001). Trade, growth and poverty. World Bank Development Research Group Working Paper no. 2615. Washington, DC: World Bank.

Dreher, A. (2006). Does Globalization Affect Growth? Empirical Evidence from a new Index, Applied Economics 38, 10: 1091-1110.

Dreher, A., Gaston, N. and Martens, P. (2008). Measuring Globalization - Gauging its Consequences , New York: Springer.

Easterly, W. (2007). Inequality does cause underdevelopment: Insights from a new instrument. Journal of Development Economics, 84(2), 755-776.

Erosa, A. and Ventura, G. (2002). On Inflation as a Regressive ConsumptionTax. Journal of Monetary Economics, Elsevier, Vol. 49(4), pp. 761-795. Federal Reserve Bank of Kansas City. Qtr III.

Esfahani, H. S., & Ramı́rez, M. T. (2003). Institutions, infrastructure, and economic growth. Journal of development Economics, 70(2), 443-477.

Fujita, M., Venables, A. J. and Krugman, P. R. (1999). The Spatial Economy: Cities, Regions and International Trade. Cambridge. MA: MIT Press.

Gabriel Felbermayr Farid Toubal (2010) “Cultural Proximity and Trade” European Economic Review, Elsevier, 2010, 54, pp.279-293. <10.1016/j.euroecorev.2009.06.009>

Glaeser, E., L. , La-Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (2004). Do Institutions Cause Growth? Journal of Economic Growth, 9(3), 271-303.

Goh, C. C., & Javorcik, B. S. (2007). Trade protection and industry wage structure in Poland. In Globalization and Poverty (pp. 337-372). University of Chicago Press.

Goldberg, P. K., & Pavcnik, N. (2007). Distributional effects of globalization in developing countries (No. w12885). National bureau of economic research.

Goldberg, P., and Pavcnik N. (2004). Trade, inequality, and poverty: What do we know? Evidence from recent trade liberalization episodes in developing countries. In Brookings trade forum 2004, ed. Susan Collins and Carol Graham, 223–69. Washington, DC: Brookings Institution Press.

Golub, S., Jones, R. W., Kierzkowski, H. (2007). Globalization and Country-Specific Service Links. HEI Working Paper No: 05/2007 S. University of Rochester.

Greenwood, J., and B. Jovanovic, (1990). Financial Development, Growth and the Distribution of Income. Journal of Political Economy, Vol. 98, No. 5, pp. 1076–108.

Guillaumont J. and Kpodar K. (2008). Can There Be a Benefit Without a Cost?” Working Paper African Department Financial Development and Poverty Reduction: Authorized for distribution by Dhaneshwar Ghura March 2008. Graduate Institute of International Studies.

Hanson, G. H. (2007). Globalization, labor income, and poverty in Mexico. In Globalization and poverty (pp. 417-456). University of Chicago Press.

Harrison, A. E., & McMillan, M. S. (2006). Dispelling some myths about offshoring. The Academy of Management Perspectives, 20(4), 6-22.

Harrison, A., & McMillan, M. (2007). On the links between globalization and poverty. The Journal of Economic Inequality, 5(1), 123-134.

Harrison, Ann, and H. Tang. 2006. Liberalization of trade: Why so much controversy? In The growth experience: Lessons from the 1990s, ed. N. Roberto Zagha. Washington, DC: World Bank.

Heshmati, Almas, (2004). Growth, Inequality and Poverty Relationships. IZA Discussion Papers 1338, Institute for the Study of Labor (IZA).

Kai, H., Hamori, S.,( 2009). Globalization, financial depth and inequality in Sub-Saharan Africa. Economics Bulletin. 29 x(3), 2025-2037.

Khandker, S. R., and Gayatri B. K. (2010). “How Infrastructure and Financial Institutions Affect Rural Income and Poverty: Evidence from Bangladesh”. Journal of Development Studies 46(6): 1109–1137.

Kose, M. A., Prasad, E. S., Rogoff, K., and Wei, S. J., (2006). “Financial globalization: a reappraisal”. IMF Staff Papers. 56(1), 8-62. Lahore, Pakistan. pp. 117-138.

Lopez, J. H. (2004). ‘Pro-Poor Growth: a Review of What We Know (and of What We Don’t)’. Washington, DC: World Bank. Mimeo.

Murdoch, J. C., & Sandler, T. (2002). “Economic Growth, Civil Wars, and Spatial Spillovers”. Journal of Conflict Resolution, 46(1), 91-110.

Ndikumana, L., and Baliamoune-Lutz, M., (2008). Corruption and Growth: Exploring the Investment Channel. University of Massachusetts, Amherst.

Neutel, M. and Heshmati, A., (2006). Globalisation, Inequality and Poverty Relationships: A Cross Country Evidence. IZA Discussion Papers 2223, Institute for the Study of Labor (IZA).

Nissanke, M., and Thorbecke, E., (2008). “Introduction: Globalization-Poverty Channels and Case Studies from Sub-Saharan Africa”. African Development Review. 20(1), 1-19.

Osmani, S. (2005). “Defining pro-poor growth (No. 9) ”, International Poverty Center of United Nations Development Programm.

Ravallion, M. (1998). “Reform, Food Prices and Poverty in India”. Economic and Political Weekly Vol.33, January 10-16, 1998, pp.29-36.

Ravallion, M., and S. Chen (2004). ‘China’s (Uneven) Progress Against Poverty’. Washington, DC: Development Research Group, World Bank. Mimeo.

Rifkin, J (2014) “The Zero Marginal Cost Society: The Internet of Things, The Collaborative Common And The Eclipse of the Capitalisme”. Palgrave Macmillan

Rodrik, D. (2002). ‘‘Institutions, Integration and Geography: In Search of the Deep Determinants of Economic Growth’’. Cambridge: John F. Kennedy School of Government, Harvard University. Mimeo.

Round, J. I. (2007). Globalization, Growth, Inequality and Poverty in Africa: a macroeconomic perspective (No. 2007/55). Research Paper, UNU-WIDER, United Nations University (UNU).

Sachs, J.D. and Warner, A. (1995), “Economic Reform and the Process of Global Integration”, Brookings Papers on Economic Activity, 1:1-118.

Sachs, J.D. et A. Warner (2001), “The curse of natural ressources”,European Economic Review, volume 45, issues 4-6.

Sindzingre, A., (2005). Explaining Threshold Effects of Globalization on Poverty: An Institutional Perspective, UN-WIDER Research Paper No. 2005/53 UNDP 2003. Human Development Report, 2003. United Nations Development Programme, New.

Temple, J. (1999). The New Growth Evidence. Journal of Economic Literature 37: 112-156.

Timmer, C. P. (2004). “The Road to Pro-Poor Growth: The Indonesian Experience in Regional Perspective”, Center for Global Development Working Paper no. 38, Washington DC.

Topalova, P. (2007). Trade liberalization, poverty and inequality: Evidence from Indian districts. In Globalization and Poverty (pp. 291-336). University of Chicago Press.

UNCTAD (2004). Economic Development in Africa: Trade Performance and Commodity Dependence. New York and Geneva: United Nations.

United Nations Department of Economic and Social Affairs Report on the World Social Weekly, Mumbai, India.

Winters, L. A. (2004). Trade Liberalization and Economic Performance: An Overview. Economic Journal 114(493): 14–21.

Winters, L. A. (2014). Globalization, Infrastructure, and Inclusive Growth. ADBI Working Paper 464. Tokyo: Asian Development Bank Institute. : http://www.adbi.org/working-paper/2014/02/24/6176.globalization.infrastructure.inclusive.growth/

Zaidi, S. A., (2005). “The Issues in Pakistan Economy”, Oxford University Press, Karachi.

Zheng, D. and K. Tatsuaki. (2012). The Role of Public Infrastructure in China’s Regional Inequality and Growth: A Simultaneous Equations Approach. The Developing Economies 51(1): 79–109.

Zheng, D., and Kuroda, T. (2013). "The Role of Public Infrastructure in C hina's Regional Inequality and Growth: A Simultaneous Equations Approach," The Developing Economies, Institute of Developing Economies, vol. 51(1), pages 79-109, 03.




DOI: http://dx.doi.org/10.1453/jepe.v2i1s.225

Refbacks

  • There are currently no refbacks.


Bookmark and Share


.......................................................................................................................................................................................................................................................................................................................................

Journal of Economics and Political Economy - J. Econ. Pol. Econ. - JEPE - www.kspjournals.org

ISSN: 2148-8347

Editor: jepe@ksplibrary.org   Secretarial: secretarial@ksplibrary.org   Istanbul - Turkey.

Copyright © KSP Library