Despite the enormous potential of globalization in accelerating economic growth and development through integration into the world economy, the transfer of technology, and the transmission of knowledge, the impact of globalization on poverty reduction has been uneven and even marginal in some regions, such as in much of sub-Saharan Africa (SSA). As the process of economic integration has intensified since the 1990s, concerns have been raised as to why globalization, as it has proceeded so far, has not contributed more to poverty reduction.
The globalization--poverty relationship is non-linear and heterogeneous, involving multifaceted channels. Besides the positive 'growth' effects of globalization on poverty, the integration process creates winners and losers directly through other channels, affecting both vertical and horizontal inequalities. The recent UNU-WIDER publication, 'The Poor under Globalization in Asia, Latin America and Africa' (Machiko Nissanke and Erik Thorbecke, editors) presents a comparative analysis of how the economic forces of globalization affected the lives of poor people around the developing world based on 12 case studies covering the spectrum from broad macroeconomic regional and country analyses to micro-oriented village studies on each of the three continents. This article draws on some of key findings from our comparative analysis of the regional experiences with the globalization-poverty relationships.
The Comparative Globalization Experiences
The two main transmission channels of globalization--the 'growth' and 'distribution' channels--interact dynamically over time to produce a complex growth--inequality--poverty triangular relationship. Our case studies show how diverse and context specific the effects of globalization on poverty are. Distinct processes of institutional and socio-political change, as well as significant differences in initial conditions, such as natural resource endowment, the quantity and quality of human capital, institutional framework, and the quality of governance, have led to significantly different effects on the poor in and even within these three regions.
Whilst the forces of globalization as such are not inherently beneficial or deleterious for development prospects, our study shows that globalization is a necessary, but not sufficient, condition for convergence to sustained development and poverty reduction. Indeed, many poor countries that have opened their economies since the...