Globalization: The Story Behind the Numbers

Has globalization raised living standards?

Increased international trade and capital flows have been a major source of the unprecedented economic growth and rise in living standards globally in the postwar period. Evidence shows that countries that have opened up to the rest of the world have done better than those that have not (see chart).

What is globalization?

Globalization is characterized by increases in flows of trade, capital, and information, as well as mobility of individuals, across borders. It is not a new phenomenon-globalization has progressed throughout the course of recorded history, although not in a steady or linear fashion.

[ SEE THE GRAPHIC AT THE ATTACHED RTF ]

Has globalization helped the poor?

Not only does international economic integration promote economic growth but also, on average, economic growth tends to increase incomes of the poor. In fact, without economic growth, there can be no sustained poverty reduction. Globalization has also facilitated the spread of technologies that have contributed to dramatic improvements in health, life expectancy, and literacy in poorer countries and communities.

* Infant mortality rates declined on average by 50 per thousand (to 59 per thousand) from 1970 to 1999 in developing countries, versus 10 per thousand (to 6 per thousand) in developed countries.

* Life expectancy in China doubled (to 70 years) over 1960-99; in India it rose by 20 years (to 64 years); and in the United States it rose from 70 to 77 years.

* Over the past three to four decades, adult illiteracy rates have declined by 30 percentage points in China, Ghana, India, Korea, and Mexico.

Has globalization reduced inequality?

Global inequality has two dimensions: inequality among and within countries.

* Globalization has helped promote convergence of per capita incomes among countries. Per capita incomes have grown faster in globalizing developing countries (those lowering their barriers to trade) than in rich countries-5 percent versus 2.2 percent in the 1990s-and there has also been...