The Evaluation of the Impact of the Globalization on Poverty (Case Study: Developing Countries)

Abstract

In the new international trade processes and the recent labor force flow, the globalization and merging economy are inevitable. Globalization has various aspects which affect the countries in several different ways. There are some acceptable ideas which prove that the globalization can lead to the economic stabilities in the developing countries and finally it would be favorable toeconomic welfare. On the other hand, one of the key points made by critics of recent economic globalization is that income inequality is increasing as a result of these processes. In this article firstly we explain these two different points of view about the globalization and secondly we use the imperial pattern and also the econometrics models (panel data) to analyze the impact of the globalization on the poverty, in 15 selected developing countries. The results suggest that, in the short run, because of the economic reforms and stabilization programs, unemployment and poverty increase. Furthermore in globalization, due to the negligence of the vulnerable classes of people in society and absence of an efficient planning system there will be a political costs which can accelerate the negative effects of this process.