Globalisation and poverty: Implications of South Asian experience for the wider debate

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Abstract

This article discusses linkages between globalisation and poverty in four South Asian countries, drawing upon eight papers prepared for a Department of International Development (DFID)-supported project. These countries were chosen, in part, because liberalisation occurred in these countries in the mid-1980s to early 1900s and was substantial, providing clear globalisation shocks as a laboratory experiment to discuss linkage. Countries generally seem to experience declines in absolute poverty over the period although relative poverty (i.e. inequality) is roughly constant. Determining linkage effects is difficult, however, as the analyses show Excluded, non-globalisation, variables such as changes in remittances in the Pakistan case, account for much of the inequality change, and once removed can change its sign. Depending upon whether trade liberalisation is in the form of tariff change, whether tariff revenue is forgone by an equal-yield VAT or a progressive income tax, or other factors, different inequality impacts can be attributed to globalisation. Broad generalisations as to globalisation-poverty linkage do not appear to follow easily from these country episodes.

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