Sunday, February 8, 2009
Direct or Inverse Relationships?
After analyzing several different methods of measuring global poverty and inequality, Wade comes to the conclusion that one cannot find a direct correlation between globalization and a decrease in poverty as "globalization has been rising while poverty and income inequality have not been falling" in his article, "Is Globalization Reducing Poverty and Inequality?"(Wade, 195). Many would agree that "freer domestic and international trade and more open financial markets lead to deeper integration into the world economy," and therefore claim that this is "the core solution for lagging regions, Africa above all" (190). However, while increased globalization has lead to increased wealth and decreased inequality in many regions of North America, western Europe, and Japan, "incomes have stagnated or fallen" in African countries (193). While this clearly makes it impossible to draw any sort of legitimate link between increasing globalization and decreasing poverty, Wade goes on to argue that globalization nonetheless "explains differences between countries: that more open economies or ones that open faster have a better record than less open ones or ones that open more slowly"(195). It is also important to note that while an inverse relationship between inequality and globalization is not evident, this does not require there to be a direct one. Globalization may not be able to relieve Africa's poorest nations of devastatingly high levels of inequality and poverty, however it cannot be blamed for them either.
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