|Globalization has helped reduce poverty in a large number of developing countries but it must be better harnessed to help the world’s poorest, most marginalized countries improve the lives of their citizens, according to a 2001 World Bank report, Globalization, Growth and Poverty: Building an Inclusive World Economy.
The report shows that 24 developing countries that increased their integration into the world economy over two decades ending in the late 1990s achieved higher growth in incomes, longer life expectancy and better schooling. These countries, home to some 3 billion people, enjoyed an average 5 percent growth rate in income per capita in the 1990s compared to 2 percent in rich countries. Many—such as China, India, Hungary and Mexico—have adopted domestic policies and institutions that have enabled people to take advantage of global markets and have thus sharply increased the share of trade in their gross domestic product.
The report puts forth a seven-point plan to help developing countries better take advantage of the benefits of globalization while managing risks. It calls on poor countries to improve their investment climates and put in place better social protection to support poor people in adapting to and taking advantage of opportunities in a changing economic environment. It also calls upon rich countries to open their markets to exports from developing countries and to slash their large agricultural subsidies, which undercut poor country exports.
Globalization, Growth and Poverty: Building an Inclusive World Economy was written by Paul Collier and David Dollar (lead authors), with contributions by Ximena Clark, Mary Hallward-Driemeier, Christiane Kraus, William Martin, Martin Rama, Sergio Schmukler, Zmarak Shalizi, Michael Woolcock, and Pablo Zoido-Lobaton.