Explaining Threshold Effects of Globalization on Poverty: An Institutional Perspective
UNU-WIDER Research Paper No. 2005/53
29 Pages Posted: 20 Sep 2006
Date Written: 2005
Abstract
The paper focuses on the non-linearity of the transmission of the impact of globalization on poverty and the existence of threshold effects. Institutions constitute a critical factor for the creation of threshold effects in the impact of globalization on poverty. Institutions - their credibility, ability to be transformed by globalization, and the ways they give the poor access to the beneficial effects of globalization - determine whether the benefits of globalization are spread to the poor or are locked in by particular groups. They also determine whether or not the negative shocks associated with globalization are transmitted in an unfettered manner. The paper presents a theory of institutions that distinguishes several components, which evolve differently and explain the threshold effects that institutions generate upon the impact of globalization on the poor. The paper then shows that social institutions and norms have a critical role in the generation of these threshold effects. It finally examines the interactions between social institutions and state policies institutions, which may contribute to the formation of poverty traps.
Keywords: Institutions, poverty, globalization, social norms
JEL Classification: B52, P48, Z13
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Globalization and Absolute Poverty – A Panel Data Study
By Andreas Bergh and Therese Nilsson
-
Globalization and Absolute Poverty – A Panel Data Study
By Andreas Bergh and Therese Nilsson
-
Shock and Awe: Institutional Change, Neoliberalism, and Disaster Capitalism
By Art Carden
-
Human Rights and Economic Liberalization
By Art Carden and Robert A. Lawson
-
Is Tolerance Good or Bad for Growth?
By Niclas Berggren and Mikael Elinder
-
Does Economic Freedom Foster Tolerance?
By Niclas Berggren and Therese Nilsson
-
Does Economic Freedom Really Kill? On the Association between ‘Neoliberal’ Reform and Homicide Rates