Globalization and Development: Squaring Criticisms With Data

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Globalization and Development:

Squaring Criticisms With Data

Andrea Goldstein

OECD (Paris) and World Bank Group (Washington)

USI - Università della Svizzera italiana International conference

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Outline

• The sad state of the world

• Does globalization cause

underdevelopment? Or would more

globalization make it easier to fight

poverty?

• What role for the international

community?

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If the World were 100 People,

what would we see?

357 Asians

321 Europeans

314 from North and South America 38 Africans 352 female 370 non-white 380 in sub-standard housing 370 cannot read

31 with a college education

350 not enough to eat

359% of the World’s wealth belongs to 6 people

3And all 6 in the US

399 cannot read this

3Because they have no computer

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Divario

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Popolazione

in

_in

stato

_stato

di

_di

povertà

_povertà

estrema

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Tasso di mortalità infantile

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Completamento dell’educazione elementare (% dei bambini in età scolare)

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Globalisation

and poverty:

_{and poverty:}

the criticisms

• Free trade is unfair

– rules (e.g. TRIPS) are unbalanced

– increases poverty in DCs and weakens social safety nets in OECD countries

– threatens human rights and the environment – destroys the social fabric

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Globalisation

and poverty:

_{and poverty:}

the (some?) data

• Although convergence has halted since

circa 1970s …

• countries that have become more global have grown faster …

• … and there is no evidence of a

race-to-the-bottom …

• … although the list of urgent reforms is certainly long!!

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Globalisation

and poverty:

_{and poverty:}

Rodrik’s

policy priorities

_{policy priorities}

• Property rights and the rule of law

are important so that investors--both current and prospective--can expect to retain the return to their investments Æ what is the best way to do this under a society’s

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Globalisation

and poverty:

_{and poverty:}

Rodrik’s

policy priorities

_{policy priorities}

• Private incentives

need to be aligned with social costs and benefits if productive

efficiency is to be achieved Æ does this result in unconditional support for the Washington Consensus (i.e. trade

liberalization, deregulation, and privatization)?

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Globalisation

and poverty:

_{and poverty:}

Rodrik’s

policy priorities

_{policy priorities}

• Macroeconomic and financial stability

require

– debt sustainability – prudential regulation – sound money.

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Aiuti allo sviluppo nel 2000 Miliardi di dollari 9.95 5.03 4.50 4.10 3.13 1.80 1.74 1.66 1.38 1.26 1.19 0.99 0.89 0.82 0.42 0.37 0.27 0.23 0.23 0.13 0.11 13.51 53.74 0 2 4 6 8 10 12 14 es y _om s _da ly ay ia _gal d

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Aiuti allo sviluppo 2000

in % del reddito nazionale dei Paesi donatori

1.06 0.84 0.80 0.80 0.71 0.28 0.27 0.27 0.26 0.25 0.25 0.23 0.22 0.20 0.13_0.10 0.22 0.32 0.32 0.31 0.30 0.34 0.36 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 s eden w ay

ourg land om _land

y _ia

gal

na

da d _ain _Italy es

UN Target 0.7

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The World Bank Mission

Our Dream

A world free of poverty.

Our Mission

To fight poverty with passion and professionalism

To help people help themselves and their environment To be an excellent institution

Our Vision

To be the premier global development institution. A respected leader and trusted partner catalyzing

knowledge and financial resources in the fight against poverty.

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IDA (1960)

To promote

economic development, increase productivity and thus raise standards of living

in the less developed areas of the world . . .

Historical Notes: Why are we

Here?

IBRD (1946)

To assist in the reconstruction and development of territories of members by facilitating the

investment of capital for productive purposes . . .

MIGA (1988)

To encourage the flow of investments for productive

IFC (1956)

To further economic

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Some Historical Landmarks

•

• 1950s: Financial Stability1950s: Financial Stability

•

• 1960s: Venturing into new fields and countries: 1960s: Venturing into new fields and countries: IDA

IDA •

• The McNamara Years: Growth, reorganizationThe McNamara Years: Growth, reorganization

•

• Economic Crisis and Adjustment LendingEconomic Crisis and Adjustment Lending

•

• 50th Anniversary 199450th Anniversary 1994

•

• Strategic Compact 1997Strategic Compact 1997

•

• The The WolfensohnWolfensohn Era Era –– 19961996--??

•

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