![]() It is thus really hard to tease out the effects of globalization on poverty in a broad sense.īut, that said, it is virtually impossible to find cases of poor countries that were able to grow over long periods of time without opening up to trade. Another challenge is that high-quality data on the well-being of the poor is often not available. One challenge is that when trade or globalization happens, many other factors are changing, such as technology and macroeconomic conditions. It has been a bit trickier, especially with aggregate data, to pinpoint how exactly the poor have been benefited. The usual argument goes that the benefits of this higher growth trickle down to the poor. What researchers have found is that, in general, when countries open up to trade, they tend to grow faster and living standards tend to increase. We observed big increases in trade flows as a result.Įconomic growth is the main channel through which globalization can affect poverty. ![]() ![]() For example, India implemented trade reforms in 1991, and its average tax on imports dropped from over 80% to an average of 30% in the late 1990s. During the 1980s and 1990s, many countries decided to abandon these protectionist policies and implemented large-scale trade reforms. If you look back over the past 30 years, developing countries had very high levels of trade protection - so they had high barriers on imports in terms of taxes, and they restricted imports quantitatively, by quotas or licenses. ![]() I first want to clarify what I mean by “globalization.” It’s an all-encompassing concept, and the aspect of globalization that I focus on in my work is international trade. ![]() Q: Is there a way to describe, in a broad sense, what impact globalization has had on the poorest people in underdeveloped countries? ![]()
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