| Jim Whitney |
Monday, March 05, 2012 |
Globalization in practice: Empirical findings from large-sample studies
1. Dollar and Kraay (2001). Trade, Growth, and Poverty. (100-country sample)
| Annual growth rate, real per capita GDP | 1980s | 1990s |
| Post-1980 Globalizers | 3.5% | 5.0% |
| Industrial countries | 2.3% | 2.2% |
| Nonglobalizers | 0.8% | 1.4% |
| 24 LDC "post-1980 globalizers" (excludes Asian Tigers): Argentina Bangladesh Brazil China Colombia Costa Rica Côte d'Ivoire Dominican Republic Haiti Hungary India Jamaica Jordan Malaysia Mali Mexico Nepal Nicaragua Paraguay Philippines Rwanda Thailand Uruguay Zimbabwe | ||
Regression analysis: "We
found a statistically significant and economically meaningful effect of trade on growth:
an increase in trade as a share of GDP of 20 percentage points increases growth by between
0.5 and 1 percentage point a year."
"[T]he growth benefits of increased trade are, on average, widely
shared—we have found no evidence of a systematic tendency for inequality to increase
when international trade increases."
"[I]s globalization leaving poor countries behind and widening the
gap between the richest and poorest countries? Our evidence on the growth performance of
the globalizers relative to the rich countries and the nonglobalizing developing countries
suggests otherwise. The rapid growth of the globalizers relative to the rich countries
means that the globalizers are narrowing the per capita income gap."
2. Bekaert, Geert, and Campbell R. Harvey, National Bureau of Economic Research, Spring 2001 (95-country sample)
| Estimated increase in annual growth of output from financial liberalization and increased foreign investment | |
| Most likely range: | 1.5%-2.3% |
| Minimum: | 0.7%-1.4% |
"It is not just the
existence of capital markets that is important for growth prospects--it is crucial that
these capital markets be liberalized to allow foreign investors to participate and local
investors to diversify their portfolios across borders. Our research shows that the
financial liberalization effect is not subsumed by economic reforms or proxies for the
development of capital markets and financial intermediation."
Key factors:
Increased overall investment (including portfolio diversification by
locals)
Financial development (insider trading laws, transparency, etc.
3. Pinkovskiy and Sala-i-Martin (2009). Parametric Estimations of the World Distribution of Income (Global sample)
| Percentage of global population experiencing absolute poverty: | 1970 | 2006 |
| $1 per day poverty rate | 26.8% | |
| $2 per day poverty rate | 45.2% | |
| Number of poor | 403 million | ____ million |
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| Regional $1 per day poverty rates | 1970 | 2006 |
| Africa, Sub-Sahara | 39.9% | |
| Middle East & North Africa | 8.4% | |
| East Asia | 58.8% | |
| South Asia | 20.1% | |
| Latin America | 11.6% | |
"There were between 300 and 500 million fewer poor people in 1998 than there were in the 1970s."