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  • Dollar Kraay (Spreading The Wealth)

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    Renato Vidaurre
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    This document summarizes research on the economic impacts of globalization. It finds that globalization, through increased international trade and investment, has generally led to faster economic growth. This growth has significantly reduced poverty in countries that have opened up to trade and strengthened property rights. While globalization may increase inequality between countries initially, inequality between countries has declined since the 1970s and its impact on domestic inequality has varied by country depending on other policies. The challenges of globalization include protectionism in some developed countries and ensuring developing countries have strong institutions and policies to benefit from globalization.

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    Dollar Kraay (Spreading the Wealth)

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    This document summarizes research on the economic impacts of globalization. It finds that globalization, through increased international trade and investment, has generally led to faster economic growth. This growth has significantly reduced poverty in countries that have opened up to trade and strengthened property rights. While globalization may increase inequality between countries initially, inequality between countries has declined since the 1970s and its impact on domestic inequality has varied by country depending on other policies. The challenges of globalization include protectionism in some developed countries and ensuring developing countries have strong institutions and policies to benefit from globalization.

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    © All Rights Reserved
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    35 views8 pages

    Dollar Kraay (Spreading The Wealth)

    Uploaded by

    Renato Vidaurre
    This document summarizes research on the economic impacts of globalization. It finds that globalization, through increased international trade and investment, has generally led to faster economic growth. This growth has significantly reduced poverty in countries that have opened up to trade and strengthened property rights. While globalization may increase inequality between countries initially, inequality between countries has declined since the 1970s and its impact on domestic inequality has varied by country depending on other policies. The challenges of globalization include protectionism in some developed countries and ensuring developing countries have strong institutions and policies to benefit from globalization.

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    © All Rights Reserved
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    of 8

    12/6/17

    Spreading the Wealth


    (David Dollar and Aart Kraay, 2002)

    Luis E. García Westphalen, Ph.D.


    Ph.D. in International Development

    Research questions
    ¡ What is the impact of globalization
    (international trade)?
    ØDoes it improve economic growth?
    ØDoes it reduces poverty?
    ØDoes it creates inequality?
    ØEffects on culture, society, and
    environment?

    1
    12/6/17

    1. Globalization and
    economic growth

    Increased
    international trade
    and investment Faster
    + Growth
    Institutional & Policy
    Reforms

    1. Globalization and
    economic growth (Cont.)
    ¡ Larger markets permit finer division of labor;

    ¡ Finer division of labor facilitates innovation and


    learning by doing;
    ¡ Some innovation involves transportation and
    communications technologies.

    2
    12/6/17

    1. Globalization and economic


    growth (Cont.)

    Non- Globalizing
    globalizing Developing Developed
    Dev. Countries Countries Countries (DC)
    (NGDC) (GDC)

    Growth 1960s 1% 1%

    Growth 1990s 1% 5% 2%

    2. Globalization and poverty


    reduction
    ¡ Globalization = Higher economic growth;
    ¡ Higher economic growth = higher
    poverty reduction.
    ⇢Globalization = Powerful force for
    poverty reduction.

    3
    12/6/17

    2. Globalization and poverty


    reduction

    Increased
    international Faster Poverty
    trade and Growth Reduction
    investment

    2. China, India, Uganda,


    Mexico, and Vietnam
    ✓Since 1980s opened up foreign trade
    and investment;
    ✓Strengthened property rights;
    ✓Negotiated trade agreements.

    4
    12/6/17

    3. Globalization and
    inequality
    Empirical evidence
    ¡ Inequality among countries has
    increased for 200 years until 1970’s.
    ¡ Inequality among countries is declining
    since 1970’s.

    5
    12/6/17

    10

    11

    3. Globalization and
    inequality
    ¡ Domestic inequality:
    ØIncreased in some countries (e.g.,
    China) and decline in others (e.g.,
    Philippines);

    ¡ Domestic inequality:
    Øeducation, taxes, social policies;

    6
    12/6/17

    12

    4. Challenges for
    globalization
    1. Protectionism from developed
    countries;
    ØProtectionism in agricultural sector
    ØImposing harmonization of property
    rights (WTO)

    2. Institutions and policies to prosper


    under globalization;

    13

    4. Challenges for
    globalization
    3. Facilitate international migration
    ØAccepting unskilled workers;
    ØStop/ reduce human traffic and human
    slavery.

    7
    12/6/17

    14

    ¡ End of presentation.

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