Working Paper Series
Globalization and Absolute Poverty – A Panel Data Study
() and Therese Nilsson
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.
Keywords: Globalization; Poverty; Panel Data; (follow links to similar papers)
JEL-Codes: D30; F15; I32; (follow links to similar papers)
32 pages, February 7, 2011
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- This paper is published as:
Bergh, Andreas and Therese Nilsson, (2014), 'Globalization and Absolute Poverty – A Panel Data Study', World Development, pages 42-61
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