Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81416
Authors: 
Bergh, Andreas
Nilsson, Therese
Year of Publication: 
2011
Series/Report no.: 
IFN Working Paper 862
Abstract: 
Using panel data from more than 100 countries around the world from 1988 through 2007, this paper examines the relationship between economic and social globalization and absolute income poverty ex post. We use the globalization index developed by Dreher (2006) and the World Bank poverty estimates. Using a fixed-effect panel based on five-year averages and using a “long run” first difference regression, we find a robust negative correlation between globalization and poverty. We further examine mechanisms and robustness by separately analyzing the effects of components of economic (trade flows and trade policies) and social globalization (information flows, personal contact and cultural proximity) respectively, controlling for growth, education, inflation, urbanization, and government consumption. Results suggest that information flows and more liberal trade restrictions are robustly negatively correlated with absolute poverty. While growth decreases poverty in the long run, only a small part of the poverty-reducing effect of globalization is mediated via growth.
Subjects: 
Globalization
Poverty
Panel Data
JEL: 
D30
F15
I32
Document Type: 
Working Paper

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