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Globalisation and Income Inequality
Updated August 19,2002.  

Stark inequality within and between countries has emerged as a major focal point in the debate over the impact of globalisation. The proponents of globalisation have postulated the disappearance or sharp reduction of inter country income disparities. But do recent experiences show any trends towards a convergence of incomes? Examples of Sub-Saharan Africa raise fears to the contrary. Inequalities within countries, according to a large section of economists, have also risen sharply.  Given deficiencies in data, empirical investigation into this phenomenon has become a complicated and often controversial process. However, recent economic research and discussion have concentrated on this contentious question and attempted to find an answer. The conclusions offered have predictably varied. This section attempts to provide a window into this debate

  • The Ricardian Vice: Why Sala-i-Martin's Calculations of World Income Inequality cannot be right
    Branko Milanovic
    The paper argues that the problem of sparseness of data relating to income distribution within a country and across time, has not been adequately solved by Xavier Sala-i-Martin in his calculation of world income inequalities, which render such estimates unreliable.
     
  • Unexpected Convergence: Disintegration of World Economy 1919-39 and Income Convergence among Rich Countries
    Branko Milanovic
    The paper demonstrates empirically, that contrary to views held by some, the between war period of 1919-39 actually witnessed a convergence and acceleration in incomes between countries. The paper concludes that it may be less observable factors like diffusion of information and technology, and not trade, capital or labour flows, which determine such movements.
     
  • Globalisation and Income Inequality: A Survey
    Ideas Research Team
    Excessive inequality, which remains the principal challenge to the process of globalisation, has given rise to a major debate among economists. Any detailed analysis must address a mainly empirical question. However, lack of quality and consistency in data emerges as a major problem for any comprehensive and conclusive study of the issue.
     
  • Against Globalization As We Know It
    Branko Milanovic
    The current view of globalization as an automatic and benign force is seriously flawed. It is mistaken because it focuses on only one, positive, face of globalization, while entirely neglecting a malignant one.
     
  • A Critique of Dollar and Kraay on ' Trade, Growth, and Poverty'
    Howard L. M. Nye, Sanjay G. Reddy and Kevin Watkins
    The authors argue that both the findings of Dollar and Kraay as well as their interpretation of their results are suspect for a variety of reasons.

  • How not to count the poor
    Sanjay G. Reddy and Thomas W. Pogge
    Use of an arbitrary international poverty line and an inaccurate measure of purchasing power equivalence has helped the World Bank to show (incorrectly) that global income poverty is falling. A new methodology for global poverty assessment is called for.

  • More Writings on Globalisation and Income Inequality

    August 21, 2002.
 
  © International Development
Economics Associates 2002
 

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