Globalization, Poverty, and the North-South Divide

Author(s): Arie M. Kacowicz

Source: International Studies Review, Vol. 9, No. 4 (Winter, 2007), pp. 565-580
Published by: Wiley on behalf of The International Studies Association
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International Studies Review (2007) 9, 565-580

Globalization, Poverty, and the North-South

Divide'

ARIE M. KACOWICZ

Department of International Relations, Hebrew University of erusalem

The new rich may worry about envy, but everyone should worry about poverty.
(Economist 2001:11)

A growing divide between the haves and the have-nots has left increasing
numbers in the Third World in dire poverty, living on less than a dollar a day.
(Stiglitz 2002:5)

Is globalization a force for equity or for exploitation? Does globalization bring

about progress or backwardness, development or underdevelopment, poverty or
affluence? What are the possible links between globalization and inequality in
general, and between globalization and poverty in particular? How is it possible
to evaluate the contradictory assessments of economic globalization and its con-
sequences? Paradoxically, it might be the case that globalization reduces poverty
while at the same time increasing inequality and the socio-economic gap between
the "haves" and the "have-nots." What are the implications of such links? How
are these possible and convoluted relationships between globalization and pov-
erty related to the North-South divide?
The widespread social and political movements against globalization have
become fashionable in the new millennium as we witnessed during the violent
demonstrations against global institutions in Seattle (1999), Prague (2000), and
Quebec and Genoa (2001). Although it is not always clear what the vociferous
opponents of globalization really want, their claim that Third-World poverty has
become one of the most pressing moral, political, and economic issues in the
political agenda of the globalization era is a legitimate one.
In addition to grassroots organizations, NGOs, and fringe groups, mainstream
international institutions and organizations have recognized, at least at the rhe-
torical level, the reality of global inequality and Third World poverty as a press-
ing issue. For instance, the official institutions of Bretton Woods post-World War
II liberalism-the International Monetary Fund (IMF) and the World Bank-
have turned their focus over the last 6 years to the eradication of poverty, or at
least its reduction, terming it "the single greatest challenge of the century."
Speaking at the plenary session of the 2000 Annual Meetings of the IMF and the
World Bank held on September 26-28 in Prague, the governors representing the
IMF's 182 members acknowledged that "although globalization has brought
opportunities for growth and development to both rich and poor countries, not
everyone has been able to take advantage of the new opportunities." The task

'This essay is a revised and expanded version of a paper delivered at the 2006 ISA annual meeting in San Diego,
California, March 22-25 that was published in The Whitehead Journal of Diplomacy and International Relations (vol. 7,
No. 2, pages 111-127). I would like to thank Robert Gilpin, Alex Mintz, David Blainey, Galia Press Bar-Nathan,
Marcia Harpaz, Yael Krispin, Orly Kacowicz, Salomon Bergman, Eytan Meyers, Orit Gal, and the readers and editors
at the John C. Whitehead School of Diplomacy and International Relations for their comments on previous versions
of this essay as well as to William Thompson for his comments on this expanded version. I am also grateful for the
support of the Leonard Davis Institute for international Relations at the Hebrew University ofJerusalem.

@ 2007 International Studies Review.

Published by Blackwell Publishing, 350 Main Street, Malden, MA 02148, USA, and 9600 Garsington Road, Oxford OX4 2DQ, UK.

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566 Globalization, Poverty, and the North-South Divide

facing the international community, the governors agreed, was to build a success-
ful, truly global economy that works well for all people and addresses the wide-
spread poverty that remains "the unacceptable face of the global economic
situation" (IMF 2000:341). Similarly, former World Bank President, James
Wolfensohn (2000:308), characterized "globalization as an opportunity, and pov-
erty as our challenge," though recognizing that globalization can relate to risks
as well as to opportunities. If anything, the aftermath of the September 11 terror-
ist attacks against the United States has demonstrated the relevance and the
urgency of addressing these global issues.
Nowadays, there seems to be a global agenda that focuses upon the possible
links between globalization and poverty, as epitomized at the United Nations
Millenium Summit in New York, September 2000 or the Monterrey Consensus of
March 2002. Among the values and principles mentioned in the "United
Nations Millenium Declaration," the links between globalization and poverty
were emphasized as follows:

The central challenge we face today is to ensure that globalization becomes a

positive force for all the world's people. Its benefits are unevenly shared, while
its costs are unevenly distributed (quoted in IMF 2000:351).

Furthermore, in a show of unguarded optimism about translating rhetorical

intentions into an operative plan for development and poverty eradication,
the leaders of the world gathered in New York City committed themselves to the
following deadline:

We further resolve to halve by 2015 the proportion of the world's people who
earn less than one dollar a day, who suffer from hunger, and who lack access to
safe drinking water (quoted in IMF 2000:351).

This declaration of good intention demonstrates that there is an emerging con-

sensus within international institutions and developed countries that we should
care about how globalization impacts poverty and inequality. There is also a con-
sensus that globalization should fulfill a positive role in reducing and eradicating
poverty. At the same time, there is serious disagreement about whether the link
between globalization and poverty and inequality is a positive or a negative one
(that is, does globalization lead to more or to less poverty?) as well as what the
implications are for the North-South divide. Moreover, it is not completely evi-
dent that globalization can reduce poverty. After all, different interpretations of
similar facts stem from divergent ideological, philosophical, normative, and theo-
retical approaches to international relationships and international political econ-
omy. The assumption that the invisible (and invincible?) forces of globalization,
including markets, science, and technology, will resolve the problems of inequal-
ity and poverty is not completely reassuring, considering the lingering reality of at
least a billion people living (or, better, surviving) in absolute poverty. Moreover,
there seems to be no consensus in the North or in the South regarding the com-
plicated and contradictory effects of globalization upon poverty. Furthermore,
due to the fact that globalization encompasses multiple and even contradictory
processes, there is no linear relationship between globalization and poverty.
This essay represents a preliminary exercise in assessing, both theoretically and
deductively, possible links between globalization and poverty within the context
of the North-South divide. Three questions are explored: (1) What are the links
between globalization and poverty? (2) What are the implications of these link-
ages? (3) How are these linkages related to the North-South divide?
The answer to the second question contains two dimensions: normative (moral)
and "prudential" (or pragmatic). The normative discussion of globalization,

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 ARIE M. KACOWICz 567

poverty, and inequality recreates th

economic and social human rights of t
World demands for a New Internationa
ally failed and did not have much ef
"prudential" or pragmatic answer focus
and equality on the international syste
nomic well-being, war and peace, politic
ronment, and new security threats, suc
and illegal migration flows. Thus, as int
rity agenda, poverty emerges as one of
(see Mansbach and Rhodes 2003).
As for the third question, this essay
links between globalization and pover
divide, making it difficult to discern
there is no consensus about its impac
words, the different theories and inte
globalization and poverty do not divide
create cleavages within the North and w
The following pages include: (1) defi
and poverty; (2) discussion of the po
globalization and poverty; (3) considera
normative and prudential terms; and
between globalization and poverty are r

Defining the Core Concepts: Glob

What Is Globalization?

There is a lot of confusion about the term and about the rhetorics of globalization
and the "new world order" that followed the end of the Cold War. Hence, global-
ization can be conceived as a myth, a rhetorical device, a phenomenon, an ideol-
ogy, a reality, a process, and the context, or even structure, of current international
relationships. In both academic and popular discourses, globalization has become
one of the catchwords of the new millennium. In fact, globalization is shorthand
for a cluster of interrelated changes: economic, ideological, technological, politi-
cal, and cultural. Economic changes, which encompass the most salient dimension
of globalization, include the increasing integration of economies around the
world, particularly through trade and financial flows (see IMF 2000:4). This inte-
gration takes place through the internationalization and de-territorialization of
production, the greatly increased mobility of capital and of transnational (multi-
national) corporations, and the deepening and intensification of economic inter-
dependence. The economic manifestations of globalization include the spatial
reorganization of production; the interpenetration of industries across borders;
the spread of financial markets; the diffusion of identical consumer goods across
distant countries; the massive transfers of population, people, and knowledge
moving freely across national borders; and the extension beyond national borders
of the same market forces that have operated for centuries at all levels of human
economic activity-village markets, urban industries, and financial centers (see
Mittelman 1996a; IMF 2000:4). Ideological changes involve investment and trade
liberalization, de-regulation, privatization, and the adoption of political democracy
in the domestic institutional realm of any given polity. Technological changes
refer to information and communication technologies that have shrunk the globe,
causing a shift from the production of goods to services. Finally, cultural changes
involve trends toward a harmonization of tastes and standards, epitomized by a
universal world culture that transcends the nation-state (Li 1997:5).

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568 Globalization, Poverty, and the North-South Divide

To sum up, globalization can be defined as the intensification of economic,

political, social, and cultural relationships across borders. In this sense, it involves
more than the geographical extension of a range of phenomena and issues. It
implies not only a significant intensification of global interconnectedness, but
also a consciousness of that intensification (a cognitive change), with a concomi-
tant diminution in the significance of territorial boundaries. Hence, globaliza-
tion may lead to the integration of states, peoples, and individuals through
increasing contact, communications, and trade, creating a holistic, single global
system. Globalization is very uneven in both its intensity and geographical scope
as well as in its different domestic and international dimensions and effects.
Hence, we might obtain different types of globalization across a rich regional
iation (see Holm and Sorensen 1995:1-7).
It is important to draw a distinction between the qualitative and the quan
tive dimensions of globalization: more of the same (quantitative change) or
itative shifts (a quantum leap). Unlike interdependence, which often im
only a quantitative change, economic globalization invokes a qualitative s
toward a global economic system that is no longer based upon autonom
national economies, but relocates production, distribution, and consumption
goods in a consolidated global marketplace.
The economic side of globalization, which receives most of the scholarly att
tion, is found in "that loose combination of free trade agreements, the Inter
and the integration of financial markets that is erasing borders and uniting
world into a single, lucrative, but brutally competitive, marketplace" (Fried
1996:30). It is a small world after all, and that global world is a MacWorld w
MTV, CNN, PCs, and Macintoshes. At the same time, globalization is an enco
passing process in the political and sociological senses, as it includes a qualita
shift in the conditions of people's lives, for better or for worse.
Liberals believe that globalization has been the inevitable result of technolo
change; moreover, from their perspective, global economic liberalization
strengthen and lead to political democracy. Globalization will expose societie
democracy, while economic liberalization will provide the material basis for
sequent democratic consolidation. Even if this assertion is true, it conceals a c
ceptual and normative trap: paradoxically, the economic forces of globalization
definition, are undemocratic, if not antidemocratic. There is a serious "democ
deficit" here. The lack of accountability of global economic forces poses a ser
political problem for both states and individuals alike. By condensing the time
space of social relationships, economic globalization transcends territorial st
and, as a result, is not accountable to elected political officials (Mittel
1996b:197). The only form of a checks-and-balances mechanism is in the hand
nonelected market forces, regulated by the logic of economics and efficienc
which resonates with the Darwinian proposal of the "survival of the fittest." In th
(vulgar) Darwinian world, poverty can be considered as an unintended co
quence, or "collateral damage," of the market forces of globalization as e
mized by the actions of transnational businesses and multinational corporat
Hence, there seems to be an embedded contradiction between the economic
political logics of globalization, leading to a "democratic deficit" and to seri
market failures unless regulated (and distorted) by the intervention of the sta

What Is Poverty?

Like globalization, poverty is a loaded concept in the social sciences. The comm
definition of poverty is a per capita income of less than $1 or $2 a day. In add
we can cite at least eleven different definitions, which somehow overlap and
plement each other. According to Paul Spicker (1999:151-157), these definiti
include:

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 ARIE M. KACOWIcz 569

(1) Basic needs: Poverty can be un

services, such as food, clothing,
("need") in order to live and fun
1999:151). In this regard, we f
extreme poverty and (2) overall p
absolute poverty) implies a lack
food needs, usually defined on t
ments. In this case, the total ea
minimum necessities for the ma
the case of starvation and fa
overall poverty refers to the lack
tial nonfood needs, such as cl
2000:20).
(2) Standard of living: In this sen
forms of deprivation but to the
than others (Spicker 1999:151). A
in terms of relative deprivation
basic essentials but is not at the
with other social groups (Nurnb
(3) Limited resources: Poverty imp
ple lack the income, wealth, or
things that they need (Spicker
(4) Lack of basic security: Poverty
to social risks (Spicker 1999:152
living and to the availability of
human poverty as a lack of basi
illiteracy, malnutrition, an ab
health, illness from preventable
services, and infrastructure such
drinking water indicate poverty
ties (UNDP 2000:20).
(5) Lack of entitlement: Both deprivation and lack of resources can reflect
lack of entitlement rather than the absence of needed items in them-
selves. The lack of entitlement becomes, then, the political and jurid-
ical context for poverty; hence, people who have the necessary
entitlement are being regarded as no longer poor. In this sense, pov-
erty derives from the relationship between ownership and exchange
(see Sen 1981; Spicker 1999:153). In this context, we should clarify
the distinction between poverty and destitution. Poverty has always
been an economic and social phenomenon, whereas destitution has
become more pronounced only recently given the assault of develop-
ment on traditional communities and their life-support. For instance,
large parts of Africa, Latin America, and Asia were poor according to
the definitions mentioned above well before colonial administrators
and development planners recognized them as poor. At the same time
they were not destitute, in terms of lack of entitlement (see Nandy
2002:107, 115, 121).
(6) Multiple deprivation: According to this definition, poverty implies tha
people have suffered from a constellation of deprivations over a per-
iod of time (Spicker 1999:153). In many developing countries, the
three dimensions of human poverty in terms of deprivation include:
(1) deprivation from a long and healthy life as measured by the
percentage of people not expected to survive to the age of 40;
(2) deprivation of knowledge as measured by adult illiteracy; and
(3) deprivation of economic provisioning from private and public

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570 Globalization, Poverty, and the North-South Divide

income as measured by the percentage of people lacking access to

health services and safe water as well as the percentage of children
under five who are moderately or severely underweight (UNDP
2000:22).
(7) Exclusion: In this sociological sense, poverty can be seen as a set of
social relationships in which people are excluded from participation
in the normal pattern of social life (Spicker 1999:154).
(8) Inequality: In relative terms, people may be held to be poor because
they are disadvantaged vis-at-vis others in society. In a basic structure
of inequality, it is clear that transfers from the rich to the poor can
make a substantial dent on poverty in most societies. In this sense,
poverty reflects inequality, though the two concepts are not identical
(Sen 1981:14-15; Spicker 1999:155). It is very important to draw a
clear distinction between inequality and poverty. Although both
might be increasing, they are quite different from one another. It is
possible, for instance, that rich countries are growing faster and
becoming more unequal with the rest, while at the same time poor
countries are still gaining in absolute wealth. Hence, we might
have less poverty but more inequality simultaneously as a result of
globalization.2
(9) Class: If inequality is considered a function of social structure, pov-
erty can be associated with a given social class or position (Spicker
1999:155).
(10) Dependency: According to this definition, poor people are those who
receive social benefits as a result of their lack of means; hence, they
are "dependent" (Spicker 1999:156).
(11) Serious deprivation: From a normative (moral) perspective, people are
held to be poor when their material circumstances are deemed to be
morally unacceptable. Hence, poverty is considered as something
that is disapproved of, the elimination of which is regarded as mor-
ally good (Sen 1981:17; Spicker 1999:157). In this view, poverty is
regarded as a "social fact," and as part and parcel of the normative
conventions of society. Poverty is related to the erosion of basic
human rights (civil, political, social, and economic) and the lack of
entitlement, possibilities, and dignity. Conversely, human rights
abuses lead to poverty and impoverishment. Hence, there is an
intrinsic link between poverty and (the lack of) human rights.

When we confront this long list of definitions of poverty with the realities of
the North-South divide, the empirical results are ambiguous and even contradic-
tory (see Lazebnik 2005). Both sides in the debate about the links between glob-
alization and poverty have sought support from "hard" data on what is
happening to poverty and inequality in the world, though their differences
reflect also their alternative definitions of poverty. By some accounts, the propor-
tion of people living in extreme poverty in the developing world fell sharply in
the 1990s (see Bhalla 2002). Other assessments, including those published regu-
larly by the World Bank, suggest a more complicated picture (Chen and Raval-
lion 2001). For some time, it was accepted that the proportion of people living
in poverty in the world was declining, but the absolute number was increasing.
This statement builds on the World Bank's measure of absolute poverty, defined
as living on a real income of less than $1 a day, an operational and practical defi-
nition that we will adopt for the purposes of this paper (see Fischer 2003:8). Yet,
others claim that globalization has led to greater poverty (Chossudovsky 1997).

2The author would like to thank Robert Gilpin for his comments on this point.

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 ARIE M. KACOWICz 571

In sum, there is not a consistent, fully r

developments in poverty.

Possible Links between Globalizati

We can turn now to an initial assessmen
tion and poverty. Does globalization l
Does it tend to level upward or downw
intended and unintended consequences of
versa?

It is a very difficult task to assess the consequences of economic globalization

due to the contradictory accounts put forth by scholars. To link globalization
and poverty, it is necessary to examine the potential causal mechanisms between
globalization and growing (or decreasing) poverty in the world, such as the
Singer-Prebisch argument about the deteriorating terms of trade in the eco-
nomic relationship between developed and developing countries as a function of
the unbalanced structure between the developed North and the developing, or
less-developed, South.3
It is becoming more and more evident, both in rhetorical terms and in the
actual practices of states and international institutions, that there are tangible
and substantial links between globalization and poverty. For instance, the UNDP
recognizes (and even suggests) that countries should link their (anti)poverty pro-
grams not only to their national policies but also to their international economic
and financial policies. Thus, in a world of increasing economic integration and
globalization, such links can be crucial. For instance, since the debt crisis of the
1980s, it has become evident that there is a direct relationship between external
debt and poverty (UNDP 2000:10).
At the same time, what remains ambiguous is the character and direction of
these possible links, ultimately interpreted according to divergent paradigms in
the international political economy literature and disparate normative views of
international relationships, such as those of liberals versus radicals. For instance,
the liberal view of global economic relationships, which is based on "mutual"
(even "complex") interdependence, regards international economic relation-
ships between developed and developing countries as mutually beneficial and
benign. In this view, the forces of globalization will eventually stimulate eco-
nomic growth in the developing nations, thus reducing and even eradicating
poverty by allowing the forces of the market to play themselves out without any
state intervention. In contrast, the radical view argues that global economic rela-
tionships between North and South are asymmetrical and approximate a type of
zero-sum relationship, according to which the forces of globalization exacerbate
inequality and poverty (see Kim 2000:1).
In logical terms, we can speculate about the following possible links between
globalization and poverty: (1) globalization causes and deepens poverty accord-
ing to the radical perspective; (2) globalization reduces and may even eradicate
poverty according to the liberal logic; and (3) there is no necessary link between
globalization and poverty from realist and agnostic perspectives.
The links between globalization and poverty are, indeed, complex and ambigu-
ous. The big question remains whether globalization promises to improve the
economies of developing nations, will exacerbate income gaps within and among
nations, or, perhaps, will lead to both contradictory processes simultaneously. In
this sense, we may have a two-way street: not only does globalization affect (some-
how) poverty but, in turn, poverty may determine the fate of globalization. This

3The author would like to thank Robert Gilpin for his comments on this point.

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572 Globalization, Poverty, and the North-South Divide

claim refutes the neo-liberal perspective that focuses only on one direction, that
is, that globalization brings about the reduction of poverty.

Globalization Causes and Deepens Poverty

According to its critics, globalization leaves the poor behind; it causes and deep-
ens poverty. In their view, this result is due to several and interrelated reasons.
First, without capital, you cannot gain from economic integration. The poor have
next to no capital, partly due to lack of entitlement rights and destitution. Sec-
ond, due to uneven development, globalization exacerbates social and economic
gaps within and among states by reinforcing a process of "creative destruction"
(Schumpeter, quoted in Weede 2000:9). Globalization requires economies and
societies to adapt and to do so quickly. Since economies almost never succeed
equally, some nations grow faster than others, so that globalization increases
inequality. Third, from a structural point of view, dependency theorists argue
that the poverty of the developing countries is caused by the affluence and
exploitation of the rich countries. According to this logic, the very structure and
process of globalization perpetuate and reproduce unequal relationships
and exchange between the "core" of industrialized countries of the inter-
national economic system and its periphery (see Gordon and Spicker 1999:35;
Ramasswamy 2000:4-9). Fourth, globalization has increased inequality by having
significant and uneven effects upon various types of social stratification, includ-
ing class, country, gender, race, urban/rural divide, and age, both between and
especially within nations (Stewart and Berry 1999:150). In this view, although
contemporary globalization has helped in some cases to narrow social hierarchies
in certain respects (such as opportunities for women to engage in waged employ-
ment), it has tended on the whole to widen gaps in life opportunities. This resul-
ty is due to the uneven distribution of costs and benefits, which tends to favor
the already privileged and further marginalize the already disadvantaged (Scholte
2000:1-2). Overall, globalization is viewed as exacerbating inequalities of
resources, capabilities, and even of the power to make and break rules in the
international arena (Hurrell and Woods 1999:1).
How does globalization produce and reproduce poverty? From a dependency
or radical perspective, the adoption of the liberal ideology of globalization and
the restructuring of the world economy under the guidance of the Bretton
Woods (liberal) institutions increasingly deny developing countries the possibility
of building their national economies. Thus, the internationalization and global-
ization of macro-economic policies transforms poor countries into open econo-
mies and "reserves" of cheap labor and natural resources (Chossudovsky
1997:37). For instance, it has been claimed that since the early 1980s, the
"macro-economic stabilization" and "structural adjustment" programs negoti-
ated among the IMF, the World Bank, and some developing countries have led
to the impoverishment of hundreds of millions of people (Chossudovsky
1997:33). In addition, multinational corporations, as carriers of technology, capi-
tal, and skilled labor between states, have reinforced the negative effects of for-
eign capital penetration by creating enclave economies within the host countries,
which are characterized by small pockets of economically developed regions, in
contrast to the larger peripheral areas that exhibit extreme poverty and little
progress, thus enlarging the gap between the rich and the poor (Kim 2000:1-2).
In this sense, globalization is producing a new kind of hegemony that fuses
power and wealth in a kind of "corporcracy" of financial markets and corpora-
tions that rule the world (Derber, quoted in Dallmayr 2002:145). In sum, the
processes of globalization have led to a ruthless capitalist system characterized by
exploitation, domination, and growing inequalities both within and among
national societies, composed of the rich core of developed economies and the

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 ARIE M. KACOWICz 573

exploited, impoverished periphery of t

300). In the words of a former chief ec
Prize winner, "globalization has not suc
ing stability. If globalization continues t
the past, globalization will not only no
will continue to create poverty and inst

Globalization Can Reduce and Resol

According to the liberal "globalization t

has taken place as the cross-border flow
people, and technologies has expande
cesses are bringing about a brave new w
tional cooperation and will eventually l
in the performance of national econom
dent over the last three decades, partici
omy has been highly beneficial for dev
and the NICs of East and Southeast Asia
lar and Kraay 2002; and especially Wolf
From a liberal perspective there seems
relationship between globalization and
place, the less poverty there will be. At
tion that globalization does not progress
for worldwide development (IMF 2000
view, those countries that have become
faster rate than others will themselves g
For example, outward-oriented (expo
dynamism and greater prosperity for m
one of the poorest areas of the world 4
nowadays. In contrast, the countries tha
cies, such as Import Substitution Ind
stagnate or decline, as happened in muc
the 1950s and the 1980s. In sum, adopti
nomic integration, interdependence,
the problems of poverty and inequa
Through the promotion of free trade th
tion holds the promise of improved liv
world (Camdessus 1999:386; see also UNDP 2000:48). In this sense, economic
opportunities in the Third World would be far greater, and poverty therefore
vastly more reduced, except for the barriers to free trade-that is, restrictions on
economic freedom, which are erected by rich and poor-country governments
alike (Economist 2000:17).
In addition to free trade, technology, as the main driver of globalization, can
be considered as essential in potentially alleviating and reducing poverty if prop-
erly and effectively disseminated and adopted. Thus, the advances achieved in
computing and telecommunications in the North offer enormous opportunities
for raising living standards in the Third World. The adoption of liberal economic
policies and the right technologies have already brought substantial benefits to
all, both increasing the profits of Western corporations and raising the productive
employment and higher incomes for the world's poor (Economist 2000:17-18).

There Is No Necessary Link between Globalization and Poverty

A third view, neither radical nor liberal but rather "agnostic" or realist, does not
identify a necessary or clear link between globalization and poverty. For instance,

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574 Globalization, Poverty, and the North-South Divide

Robert Gilpin (2000:293-294) argues that many of the problems associated with
globalization are linked to other factors, which are not part and parcel of the
more limited phenomenon of globalization. In other words, by adopting a "min-
imalist" definition of globalization in economic terms (that is, trade, investment,
and financial flows), technological changes, the third industrial revolution, the
digital revolution, and the concomitant "digital divide" are not part of globaliza-
tion itself. Thus, one cannot bless or blame globalization for having positive or
pernicious effects upon poverty and inequality, since it is a much more limited
phenomenon that we thought initially.
Moreover, this approach suggests the serious problems that have affected the
fate of peoples and states, such as poverty and environmental degradation, are
first and foremost directly related to national governments and to national poli-
cies rather than to the supranational or supraterritorial forces of the global mar-
ket. Thus, the principal culprits (and saviors) of increasing (or reducing) poverty
and of abusing (or conserving) the environment are the national governments
themselves, through their decision-making procedures and implementation. In
this sense, decisions taken at the national level can be independent and
detached from "global" considerations.
From this perspective, in normative terms globalization should not be labeled
as "bad" or "good," but as having the potential to do enormous good or tre-
mendous harm, depending on how it is managed by the national governments.
In other words, it is the way states cope with the processes of globalization that
should become the focus of our inquiry (Haass and Litan 1998; Stiglitz 2002:20,
215).

Normative and Prudential Implications of Poverty

From this brief analysis of the possible links between globalization and poverty,
one can conclude that these links are complex and ambiguous due to the poten-
tial mutual effects of the relationship (Anan 2000:22). In other words, it is not
only globalization that can affect poverty in positive or negative directions but
rather the poverty and inequality caused by globalization can contribute to social
violence, political and social instability, ethnic conflicts, and civil and interna-
tional wars that shape the global system. For instance, poverty and immiseration,
which have been directly linked to overpopulation, resource scarcity, and envi-
ronmental degradation as witnessed in many areas of contemporary sub-Saharan
Africa are a direct source of social conflicts, civil wars, and the generation of ref-
ugee flows (Hurrell 1999:260). As Robert Kaplan has argued, "precisely because
a large part of Africa is staring into the abyss, it gives a foretaste of how wars,
frontiers, and ethnic politics will look a few decades from now" (quoted in
Martin and Schumann 1997:25). These are, indeed, gloomy and pessimistic argu-
ments and statements that indicate the relevance (and urgency) of the issues at
stake. Therefore, an analysis of the possible links between globalization and pov-
erty is not a futile academic exercise done merely for the sake of theorizing in
international relationships. We should seriously care about the implications and
consequences of these links in both ethical and practical terms.
From a normative (ethical) standpoint, the persistence of poverty, increasing
inequality, and human deprivation diminishes us all as human beings. Poverty,
and even more destitution and lack of entitlement, contradict human decency,
human rights, and basic claims of distributive justice. Moreover, from a practical
standpoint, poverty and extreme inequality are an "international externality"
that can disrupt and derail the forces of globalization. As one of the senior offi-
cials of the IMF acknowledged recently, "growing inequality poses the greatest
risk to the future of the global economy. If the majority of the world's popu-
lation is increasingly marginalized and economically disenfranchised, then

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 ARIE M. KACOWICZ 575

globalization will fail" (IMF 2000:306

ments, it should be emphasized that
peace and security fragile as well (Nel 2

The Normative/Ethical Dimension: Issues o

Why should the rich countries help the

institutions and organizations-the Un
IMF-assist poor people in developing
tions are framed in other than the p
calculations, then we can move our ana
and from the international to the glob
erations such as (re)distributive global
tion and poverty as a global problem
relationships. Thus, poverty becomes a
ramifications for humankind as a whole
human rights in the direction of univer
there is a gross violation of those right
or even global responsibility, for the fat
sal promotion of human rights of vari
shell, from a normative standpoint,
between globalization and poverty since
human rights and distributive justice,
poverty. Poverty is thus linked to th
equity, equality, and distributive justic
2000:1-2).
Normative concern for the potenti
poverty echoes the literature on (re)d
1970s, following the Third World dema
are two major normative themes that e
sis: (1) human rights and (2) distributive
Human rights represent the basic no
against poverty and facilitate understan
cern with the links between globalizatio
ity, basic needs, and socio-economic h
poor ones in extreme cases of distress o
is considered a basic violation of human
to correct such a violation. Yet, it shoul
sensus is limited to extreme cases of
1999:16). From this perspective, there
resources beyond a minimal guarante
distance between a human rights analy
or utilitarian justification to "eradicate
might even overlap.
The second normative theme, justic
more difficult to reach and to apply to
politan setting. To start with, there
whatsoever regarding the moral case
within or among states, or for that ma
the name of social and distributive just
rights). Following the formulation of t
fairness should be interpreted in ter
equity, and some form of redistributio
to the have-nots (see Rawls 1971:7, 1
part of a hypothetical and ideal social c

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576 Globalization, Poverty, and the North-South Divide

should share in the gains of society as it grows, while the rich should share in
the pains of society in times of crises. Yet, our contemporary global economic
system tends to ignore or shy away from these issues of distribution and fairness
(Stiglitz 2002:78), while following the quasi-Darwinian logic of the forces of the
market. Thus, the difficulties in trying to implement a scheme of global re-
distributive justice in international relationships remain enormous as long as we
do not have in place a global polity that will guarantee maximum equal liberty
to every member of the human community on a cosmopolitan, transnational
basis.

The PrudentiaVPragmatic Dimension: Issues of Security and Economics

As mentioned above, our concern here regarding the implications of globaliza-

tion for poverty and inequality is not only normative and moral, but also prag-
matic and "prudential" in realpolitik and cost-benefit terms. We should care
about the mutual relationships between globalization and poverty since there are
crucial issues of security (war and peace) and economics (well-being and welfare)
at stake.
In terms of security, the ways in which the "world" (meaning by that mainly
the developed countries) cope with poverty and inequality are likely to deter-
mine whether the coming decades will be peaceful and stable or violent and dan-
gerous, and to what extent the current international order will not be disrupted.
As mentioned throughout this essay, poverty produces frustration and anger,
directed both at the governments of developing countries and at citizens of
wealthy countries (Mansbach and Rhodes 2003). Moreover, the terrorist attacks
on the United States in September 2001 resolved the debate over whether pov-
erty, marginalization, and the lack of development were only a humanitarian
concern or a security problem as well. Although the exact nature of the links
between poverty and terrorism remains a matter of debate, it is clear that the
renewed US interest in enlarging its aid and development to Third World coun-
tries stems from this antiterrorist connection (Matthews 2002:9). Furthermore,
the problem of poverty is also associated with international and civil wars, flows
of illegal and legal migrants, refugees, environmental degradation, the spread of
diseases, and threats to the existing international order emanating from
demands for international and global justice arising from terrorist and guerrilla
activities. To sum up, whether we take the liberal, radical, or realist approach, we
should care about the links between globalization and poverty since the implica-
tions of such links are part and parcel of the growing security agenda of the new
millennium. Since the impact of globalization upon the developing state is
ambivalent, mixed, and uneven, we should watch out for the disruptive effects of
poverty that back into our global system becoming an unstable force and catalyst
for wars, disasters, domestic and regional instability, environmental degradation,
terrorism, refugees, and migration.
With regard to economics, serious considerations of practicality and pragma-
tism should justify our concern about links between globalization and poverty. In
our globalized world, there are different ways for the rich countries to help the
poor ones: export capital to them, import products from them, or import the
global poor from the Third World through the easing of restrictions on political
borders and the encouragement of migration flows (Gilpin quoted in Doyle
2000). Nowadays, a considerable portion of the trade of the United States and
Europe is geared toward developing countries, where most of the world's popula-
tion lives. Moreover, these countries represent not only potential and emerging
markets but also sources of indispensable raw materials. Hence, the costs of
neglecting the rapidly growing international class divide and social and
economic gaps will be immense not just for the developing world but for

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 ARIE M. KACOWICZ 577

humankind, reaped in the form of env

disasters, and lack of economic growth (S
In this utilitarian and cost-benefit analys
developing countries we can identify an in
tive and practical arguments. Focusing re
worthwhile simply on humanitarian grou
yet, the disadvantages of growing up in
belief in the equality of opportunity, bo
helping the underclass to rejoin society
domestic and international levels. Hen
(cost-benefit) arguments tend to reinforc
It should be emphasized that the Bret
regarded poverty as a national or, at most
as a global one. Thus, the poverty relief
and also by the United Nations Developm
for international coordination and cooper
the less developed countries on an inter
remains an open question whether the na
World Bank and the UNDP allow for the
tional or global burden-sharing facility t
local, national, regional, interstate and
2000:3). The answer seems, so far, to be a

Globalization, Poverty, and the No

To what extent can the different interpre
ization and poverty be reconciled within t
The answer, it seems is far from simple.
countries and the poor, less-developed na
guideline about how to understand and int
debate about whether globalization brin
reflect the North-South divide, but rath
the North and within the South about the
The most strident and vocal critiques of
South, but from certain intellectual circle
ope. Hence, the debates reflect a North-N
about different versions of globalization c
European countries) as well as domestic
given European country.
Although there have been many protest
the United States and Europe, it should b
voices from the South avidly look for
trade. They actually resent the marginali
world economy following the end of th
about the pernicious effects of globalizat
for instance, Castafieda 1994 on Latin Am
recent and interesting example, the emp
insertion into the global economy, despite
ous rhetoric of political leaders from L
to Chavez (in Venezuela).
Furthermore, different approaches to g
tries in the global South. Whereas Chin
countries of East and Southeast Asia ha
themselves into the global economy, man
ern Asian countries have remained deta

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578 Globalization, Poverty, and the North-South Divide

Similarly, the turn to the left in recent South American elections echoes a fasci-
nating ideological debate about the need to transcend the Washington Consen-
sus of the 1990s without abandoning the basic tenets of a liberal economy and
the promotion of globalization, but in contrast to the more orthodox liberal ide-
ology that characterized the same Latin American countries back in the 1990s.
To sum up, there is an empirical (factual) North-South gap in terms of eco-
nomic indicators and development, but that divide does not correlate with an
ideological or theoretical divide. Hence, we find the most radical opponents of
globalization in the North, the most orthodox adherent of neoliberalism in the
South (like the Argentine government of the 1990s), and agnostic realists across
the board in both developed and developing nations. Hence, we cannot derive
specific and clear conclusions about the ideological debate across the North-
South divide.

Conclusion

This essay has attempted to assess in a preliminary way the different and alterna
tive relationships between the phenomena of globalization and poverty as a glo
bal problem in international relationships and to put it within the context of th
North-South divide. After defining the two concepts of "globalization" an
"poverty" as well as pointing out their different meanings and interpretations
several logical links were proposed between the two. First, from a radical perspe
tive, one can argue that globalization causes and deepens poverty and inequality
both within and among nations, mainly for structural reasons. Second, from a
liberal perspective, as epitomized by the "Washington consensus," the forces of
globalization are considered to be the potential solution and cure to the pro
lem of poverty, by reducing and eventually eradicating it at least in absolu
terms. From this latter perspective, the reduction and eradication of poverty ca
be done eventually and especially by promoting free trade and disseminating i
a wiser way the technological impacts of the information revolution. Third, fro
a realist or "agnostic" view, a case can be made that there is no necessary o
clear linkage between globalization and poverty. The argument in this instance i
based on a minimalist version of what globalization entails and emphasizes
national governments and states as the potential culprits (and saviors) for the
problem of poverty. All in all, the links between globalization and poverty are
complex and ambiguous; globalization might have both detrimental and positiv
effects. Moreover, this is a two-way relationship: poverty substantially affects glob-
alization; hence, it is a global problem that should be tackled by the agents and
structures of globalization.
The second question addressed in this essay has been to present a rational
for the concern about these complex links ("What are the implications of these
links?"). The answer to this question contains two dimensions: a normativ
(moral) one and a practical (or "prudential") one. The normative answer recre-
ates the debates about distributive justice and economic and social human right
of the 1970s and 1980s and is formulated around two major themes: (1) poverty
implies a violation of human rights and, as such, should be eradicated and (
the links between globalization and poverty should encompass a dimension
distributive justice in terms of global equity, fairness, and redistribution o
resources.

Beyond the normative concern, there are some commo

matic, and "prudential" reasons why we should be concer
tions of the links between globalization and poverty. Fir
poverty can exercise disruptive effects upon the internat
from a security standpoint, that is, as related to war an
international conflicts, political and social instability, la

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 ARIE M. KACOWICz 579

failure of states, export of terrori

crime, environmental degradation,
nomic terms, due to the inherent
the international system, it makes
and development of the developing
raw materials, and economic well-be
global economy.
Finally, the third question discuss
the main theme of this symposium
tion and poverty within the North
even though there is a clear empiri
developed countries, that divide do
cal/theoretical debate about the me
inconclusive statement is due to the
poverty worse, others reduce pover
sum, even though the socio-econom
ing countries correlates perfectly w
zled and confused when we attem
alternative theories and ideologies a
links between globalization and pove

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