The Relationship between Income Inequality, Poverty and Globalisation

Almas Heshmati ()

No 1277, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper introduces two composite indices of globalisation. The first is based on the Kearney/Foreign Policy magazine and the second is obtained from principal component analysis. They indicate the level of globalisation and show how globalisation has developed over time for different countries. The indices are composed of four components: economic integration, personal contact, technology and political engagement, each generated from a number of indicators. A breakdown of the index into major components provides possibilities to identify sources of globalisation at the country level and associate it with economic policy measures. The empirical results show that a low rank in the globalisation process is due to political and personal factors with limited possibility for the developing countries to affect. The high ranked developed countries share similar patterns in distribution of various components. The indices were also used in a regression analysis to study the causal relationships between income inequality, poverty and globalisation. Inequality is negatively correlated to globalisation, and globalisation reduces poverty.

Keywords: globalisation; income inequality; poverty; indices; principal component (search for similar items in EconPapers)
JEL-codes: C23 D63 F15 O57 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2004-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published - published in: Nissanke and Thorbecke (eds.), The Impact of Globalization on the Worlds Poor, Palgrave Macmillan: Basingstoke, 2006

Downloads: (external link)
https://docs.iza.org/dp1277.pdf (application/pdf)

Related works:
Working Paper: The Relationship between Income Inequality, Poverty, and Globalization (2010)
Working Paper: The Relationship Between Income Inequality, Poverty, and Globalization (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp1277

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().