international trade

This PDF is a selection from a published volume from the
National Bureau of Economic Research

Volume Title: Globalization and Poverty
Volume Author/Editor: Ann Harrison, editor
Volume Publisher: University of Chicago Press
Volume ISBN: 0-226-31794-3
Volume URL: http://www.nber.org/books/harr06-1
Conference Date: September 10-12, 2004
Publication Date: March 2007

Title: Globalization and Poverty: An Introduction
Author: Ann Harrison
URL: http://www.nber.org/chapters/c10713

Globalization and Poverty
An Introduction
Ann Harrison

1

Overview

More than one billion people live in extreme poverty, which is defined by the World Bank as subsisting on less than one dollar a day.1 In 2001, fully half of the developing world lived on less than two dollars a day. Yet poverty rates are much lower today than twenty years ago. In the last two decades, the percentage of the developing world living in extreme poverty has been cut in half.
While poverty rates were falling, developing countries became increasingly integrated into the world trading system. Poor countries have slashed protective tariffs and increased their participation in world trade. If we use the share of exports in gross domestic product (GDP) as a measure of globalization, then developing countries are now more globalized than high-income countries.2
Does globalization reduce poverty? Will ongoing efforts to eliminate protection and increase world trade improve the lives of the world’s poor?
There is surprisingly little evidence on this question.3 The comprehensive
Ann Harrison is a professor of agricultural and resource economics at the University of
California, Berkeley, and a research associate of the National Bureau of Economic Research.
I would like to thank Pranab Bardhan, Ethan Ligon, Margaret McMillan, Branko Milanovic, Guido Porto, Emma Aisbett, Don Davis, Alix Zwane, and two anonymous reviewers for helpful comments and suggestions.
1. The poverty estimates in this

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