ABSTRACT

During the last two decades, policy advice from bilateral and multilateral donors to developing countries has been conditioned by increasing market openness and more integration into the global economy – a process that characterises globalisation. Some of this advice is predicated on two major assumptions. The first is that outward-oriented economies are not only more efficient and less prone to resource waste, but also appear to have performed well in terms of overall development. Second, that raising average incomes generally benefits all groups in countries, though not necessarily to the same extent. Thus, it subscribes to the notion that as long as inequality is not increasing too much, economic progress through growth will reduce poverty. However, the validity of these assumptions is being challenged in some quarters (especially by the anti-globalisation movement) and there are doubts and uncertainties about the effects some liberalisation policies might have on poverty in a globalising world. Despite these doubts, the relationship between globalisation and poverty remains inadequately researched and poorly understood. Clearly, if the effects are ambiguous, and the relationships are obscure, then the appropriate policy directions in the current environment are even more uncertain.