Do the poor benefit from globalization regardless of institutional quality?

Research output: Contribution to journalArticle

Abstract

Despite significant progress towards the Millennium goals, more than one billion people live on less than 1.25 US dollars per day. Previous research suggests that globalization stimulates poverty reduction, but does not investigate what role institutions play in this relationship. Theoretically, globalization could act as either a complement or a substitute to institutional quality in reducing poverty. We find that the poverty-reducing effect of globalization is stronger when institutions are weak. In particular, increasing social globalization reduces poverty more when corruption is high and democratic accountability is low. Thus, globalization has the power to reduce poverty even in countries with low institutional quality.

Details

Authors
Organisations
External organisations
  • Research Institute of Industrial Economics
Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Economics

Keywords

  • Absolute poverty , globalization, institutions, information flows, D30, F15 , I32
Original languageEnglish
Pages (from-to)702-712
JournalApplied Economics Letters
Volume23
Issue number10
StatePublished - 2016
Publication categoryResearch
Peer-reviewedYes