chapter  2
23 Pages

What type of global governance would best lower world poverty and inequality?


What would it take over the next 50-100 years to bring world poverty and inequality down to the level of a typical industrial country, say the United States or Canada, or even better to that of a low inequality country like one of those in Scandinavia?1 In particular, how could international governance contribute to such an outcome? Since the developing countries are a heterogeneous group-some nowmiddle income and some low income, some substantially industrialized and others not-what they need to progress and reduce poverty varies considerably among them. Poverty reduction has been occurring rapidly in Asia over the last few decades, but not in Sub-Saharan Africa. Accordingly the optimal set of policies to further that goal has with time become more Africa-specific. As for inequality, most pronounced in Latin America but increasingly evident in parts of Africa and in China, the needs are rather different. Some policies are beneficial on both of these fronts, others only on one. The main argument of this chapter is that the industrial countries

have, on average, done a weak job in fostering those changes that would have been most helpful in the alleviation of poverty and a very weak job in helping with the reduction of inequality. Positive contributions on some fronts have too often been canceled out by negative ones on others. Clearly the benefits conferred have been far less than they might have been. This unhappy outcome is in part because of inadequate levels of some useful types of support, but at least as often due to bad choices as to what to focus on. Industrialized country support has been inadequate in the areas of land reform, technology for small scale agriculture, support for small scale non-agricultural enterprise, and non-agricultural technological transfer. Policies on international capital flows, trade, and migration have also been largely unsupportive of larger goals of reducing poverty and inequality. Overall, the record is an embarrassing one. Turning it into a good record would not require “rocket science,” but simply sober consideration of what the evidence tells, and has told, us.