Editors' Summary

Globalization and its linkages to global poverty and inequality are the subjects of heated debates. These topics are also the focus of large and growing literatures, in economics and other disciplines. What have we learned from all of this research? Or put another way, what do we know, and what do we still not know? This broad topic clearly involves a myriad of more specific issues, and most, if not all of them, are quite complex. To make sense of the interwoven strands, a series of papers by researchers working actively on a variety of subtopics were commissioned for this project. These experts, as well as the formal commentators, were explicitly selected so as to cover a range of perspectives and views.

All of the contributors to the project grappled with difficult issues of definition. As discussed below, there are no agreed-upon definitions of the terms globalization, poverty, or inequality. However, clarifying the way such terms are used is critical, as studies based on different definitions of these terms yield starkly contrasting conclusions.

A number of other themes emerged from the analyses. Perhaps the most consistent was a note of caution against making definitive, across-the-board statements about the relationships between globalization, poverty, and inequality. The extensive discussions highlighted tremendous heterogeneity in outcomes as countries integrate into the global economy. This heterogeneity is driven as much by differences in countries' initial endowments and institutional capacity as it is by the globalization process per se. Another theme is the extent to which implicit value judgments are embedded in the measures and methods that are used to evaluate these relationships. For example, economists that study inequality typically focus on proportionate differences in income across countries and individuals, while critics of globalization are more concerned about absolute differences between individuals and countries—for example, the income gap between the rich and the poor. This results in starkly different visions of the relationship between globalization and inequality.

Four of the papers focus on measures of global welfare. These contributors examine traditional indicators of poverty and inequality, as well as explore broader indicators including measures of health, subjective well-being, and civil conflict. Their papers highlight that there are difficult issues of measurement inherent in each of these concepts. Reasonable people may disagree about which one (or ones) is most appropriate, often because of the value judgments embedded in the methodology used to construct them and, furthermore, because each of the measures appears to behave quite differently.

Three papers focus on the channels through which globalization may affect the world's poor. One of these does so using the lens of analytic trade models to explore the importance of cross-country differences in factor supplies versus productivities. Another provides an extensive review of the empirical literature on the implications of trade liberalization using microdata from country case studies. The third tackles a broad set of issues, including the influences of both domestic and international factors on the poor in low-income countries.

Authors of the final two essays were asked to comment broadly on what they had heard and to look forward. One of these emphasizes why inequality, and not just poverty, matters. The other takes a very long-term view, discussing implications of growth on poverty and the risks to that growth scenario.

How much are the world's poor sharing in the gains that arise from economic growth, fueled by greater economic integration? In the second paper of the volume, Martin Ravallion asks why different sides of the ongoing debate about globalization and inequality give seemingly conflicting answers. Members of the antiglobalization movement claim that inequality between and within nations has been increased by globalization policies. In stark contrast, those who support globalization claim that it raises nations' incomes and that the poor benefit substantially. Ravallion's main thesis is that the different sides in this debate do not share the same values about what constitutes a just distribution of the gains from globalization. But value judgments are embedded in the standard measurement practices used to construct the factual claims made about what is happening to global inequality. He explores...