Channels and policy debate in the globalization–inequality–poverty nexus

SummaryThe paper offers a critical literature review of the debate surrounding the globalization–poverty nexus, focusing on channels through which globalization affects the poor. It first examines the “growth” conduit through which globalization affects poverty. Treating inequality as the filter between growth and poverty reduction, the causal chain of openness–growth–inequality–poverty is scrutinized, link by link. It then examines other channels in the globalization–poverty nexus, such as differential factor movements, the nature of technological change and diffusion, the impact of globalization on volatility and vulnerability, the worldwide flow of information, global disinflation, and institutions. The paper concludes with a discussion of strategic policy issues within the context of the globalization debate.