Channels and policy debate in the globalization-inequality-poverty nexus

Linkages between inequality and poverty in a globalising world

The paper offers a critical literature review of the debate surrounding the globalisation-poverty nexus, focusing on channels and linkages through which globalisation affects the poor.

After introducing four different concepts used to measure trends in world income inequality, the paper examines inequality as an enabling factor to growth and poverty reduction. The linkages between growth, inequality and poverty are then examined.

The paper assesses other channels in the globalisation-poverty nexus, including:

changes in relative product and factor prices
differential cross-border factor mobility
technical progress and the technological diffusion process
impact of globalisation on volatility and vulnerability
impact of globalisation on the flow of information
globalisation and global disinflation
institutions in developed and developing countries that mediate the various channels and transmission mechanisms linking globalisation to poverty.

The paper concludes with a discussion of strategic policy issues within the context of the globalisation debate. [adapted from author]

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Channels and policy debate in the globalization-inequality-poverty nexus