The Globalization-Governance-Poverty Nexus: Examining Pathways in Developing Countries

##plugins.themes.academic_pro.article.main##

Afsheen Baqir
Uzma Ghafoor
Muhammad Ramzan Sheikh
Asad Abbas

Abstract

Globalization involves the removal of barriers to the movement of people, goods, services, and information on a global scale. This study aims to examine the impact of globalization and governance on poverty across 77 developing countries from 2007 to 2020, utilizing the quantile regression method (QRM). The findings indicate that both globalization and governance exert negative effects on poverty. As globalization increases, so does economic growth, leading to a decrease in poverty levels in these nations. Moreover, effective governance enhances economic growth, contributing to poverty alleviation. Economic, social, and political globalization play significant roles in poverty reduction. The study suggests that governments may pursue policies centered on globalization and development to help developing countries achieve poverty alleviation goals.

##plugins.themes.academic_pro.article.details##

How to Cite
[1]
Baqir, A. , Ghafoor, U. , Sheikh, M.R. and Abbas, A. 2024. The Globalization-Governance-Poverty Nexus: Examining Pathways in Developing Countries. Journal of Policy Research. 10, 1 (Mar. 2024), 62–86. DOI:https://doi.org/10.61506/02.00168.

References

  1. Agénor, P. R. (2004). Does globalization hurt the poor?. International economics and economic policy, 1, 21-51. DOI: https://doi.org/10.1007/s10368-003-0004-3
  2. Agenor, P. R. (2002). Does globalization hurt the poor? (Vol. 2922). World Bank Publications. DOI: https://doi.org/10.1596/1813-9450-2922
  3. Akbar, M., Abdullah, Naveed, A., & Syed, S. H. (2022). Does an improvement in rural infrastructure contribute to alleviate poverty in Pakistan? A spatial econometric analysis. Social Indicators Research, 162(1), 475-499. DOI: https://doi.org/10.1007/s11205-021-02851-z
  4. Akhter, S., Liu, Y., & Daly, K. (2010). Cross country evidence on the linkages between financial development and poverty. International Journal of Business and Management, 5(1), 3. DOI: https://doi.org/10.5539/ijbm.v5n1p3
  5. Alimi, A. S., & Okunade, S. O. (2020). Financial inclusion, ICT diffusion and poverty reduction: Evidence from Sub-Sahara African countries. Asian Journal of economics and Business, 1(2), 139-152.
  6. Alpízar, F., & Ferraro, P. J. (2020). The environmental effects of poverty programs and the poverty effects of environmental programs: The missing RCTs. World Development, 127, 104783. DOI: https://doi.org/10.1016/j.worlddev.2019.104783
  7. Alvi, E., & Senbeta, A. (2012). Does foreign aid reduce poverty? Journal of International Development, 24(8), 955-976. DOI: https://doi.org/10.1002/jid.1790
  8. Arshed, N., Kalim, R., Iqbal, M., & Shaheen, S. (2023). Role of real sector and HDI: does competitiveness contribute? Journal of the Knowledge Economy, 14(3), 3044-3070. DOI: https://doi.org/10.1007/s13132-022-00997-w
  9. Aschauer, D. A. (1989). Is public expenditure productive? Journal of monetary economics, 23(2), 177-200. DOI: https://doi.org/10.1016/0304-3932(89)90047-0
  10. Awad, A. (2023). Information and communication technologies role in alleviating poverty in Sub‐Saharan Africa: Impacts and transmission channels. Sustainable Development, 31(2), 1149-1165. DOI: https://doi.org/10.1002/sd.2447
  11. Bin-Feng, C., Zhe, L., Mirza, S. S., & Safdar, R. (2023). Targeted poverty alleviation initiatives and corporate sustainable value creation: Determining the role of corporate internal governance control in China. Heliyon, 9(7). DOI: https://doi.org/10.1016/j.heliyon.2023.e17686
  12. Calderón, C., & Servén, L. (2010). Infrastructure and economic development in Sub-Saharan Africa. Journal of African Economies, 19(suppl_1), i13-i87. DOI: https://doi.org/10.1093/jae/ejp022
  13. Calderón, C., Moral‐Benito, E., & Servén, L. (2015). Is infrastructure capital productive? A dynamic heterogeneous approach. Journal of Applied Econometrics, 30(2), 177-198. DOI: https://doi.org/10.1002/jae.2373
  14. Chakamera, C., & Alagidede, P. (2018). The nexus between infrastructure (quantity and quality) and economic growth in Sub Saharan Africa. International Review of Applied Economics, 32(5), 641-672. DOI: https://doi.org/10.1080/02692171.2017.1355356
  15. Chani, D. M. I., Pervaiz, Z., Jan, S. A., Ali, A., & Chaudhary, A. R. (2011). Poverty, inflation and economic growth: empirical evidence from Pakistan. World Applied Sciences Journal, 14(7), 1058-1063.
  16. Chen, L., Chen, T., Lan, T., Chen, C., & Pan, J. (2023). The contributions of population distribution, healthcare resourcing, and transportation infrastructure to spatial accessibility of health care. INQUIRY: The Journal of Health Care Organization, Provision, and Financing, 60, 00469580221146041. DOI: https://doi.org/10.1177/00469580221146041
  17. Chotia, V., & Rao, N. V. M. (2017). Investigating the interlinkages between infrastructure development, poverty and rural–urban income inequality: Evidence from BRICS nations. Studies in Economics and Finance, 34(4), 466-484. DOI: https://doi.org/10.1108/SEF-07-2016-0159
  18. Coccia, M. (2021). How a good governance of institutions can reduce poverty and inequality in society?. Legal-Economic Institutions, Entrepreneurship, and Management: Perspectives on the Dynamics of Institutional Change from Emerging Markets, 65-94. DOI: https://doi.org/10.1007/978-3-030-60978-8_4
  19. Dollar, D., & Kraay, A. (2002). Growth is Good for the Poor. Journal of economic growth, 7, 195-225. DOI: https://doi.org/10.1023/A:1020139631000
  20. Dollar, D., & Kraay, A. (2004). Trade, growth, and poverty. The economic journal, 114(493), F22-F49. DOI: https://doi.org/10.1111/j.0013-0133.2004.00186.x
  21. Dorn, F., Fuest, C., & Potrafke, N. (2018). Globalization and income inequality revisited. DOI: https://doi.org/10.2139/ssrn.3143398
  22. Dreher, A. (2006). Does globalization affect growth? Evidence from a new index of globalization. Applied economics, 38(10), 1091-1110. DOI: https://doi.org/10.1080/00036840500392078
  23. Dreher, A. (2006). The influence of globalization on taxes and social policy: An empirical analysis for OECD countries. European Journal of Political Economy, 22(1), 179-201. DOI: https://doi.org/10.1016/j.ejpoleco.2005.04.006
  24. Dreher, A., & Gaston, N. (2008). Has globalization increased inequality?. Review of International Economics, 16(3), 516-536. DOI: https://doi.org/10.1111/j.1467-9396.2008.00743.x
  25. Ewane, E. B. (2023). Good governance and poverty alleviation in the cemac sub-region: A fixed effect model with driscoll-kraay standard errors technique. Asian Journal of Empirical Research, 13(2), 41-50. DOI: https://doi.org/10.55493/5004.v13i2.4831
  26. Fagbemi, F., Osinubi, T. T., & Adeosun, O. A. (2022). Enhancing sustainable infrastructure development: A boon to poverty reduction in Nigeria. World Development Sustainability, 1, 100006. DOI: https://doi.org/10.1016/j.wds.2022.100006
  27. Goldberg, P. K., & Pavcnik, N. (2004). Trade, inequality, and poverty: What do we know? Evidence from recent trade liberalization episodes in developing countries. DOI: https://doi.org/10.3386/w10593
  28. Goldberg, P. K., & Pavcnik, N. (2007). Distributional effects of globalization in developing countries. Journal of economic Literature, 45(1), 39-82. DOI: https://doi.org/10.1257/jel.45.1.39
  29. Han, V., Ocal, O., & Aslan, A. (2023). A revisit to the relationship between globalization and income inequality: are levels of development really paramount?. Quality & Quantity, 57(1), 973-990. DOI: https://doi.org/10.1007/s11135-022-01402-z
  30. Harrison, A. E. (Ed.). (2007). Globalization and poverty (p. 1). Chicago: University of Chicago Press. DOI: https://doi.org/10.7208/chicago/9780226318004.001.0001
  31. Ronaghi, M., & Ronaghi, M. H. (2021). Investigating the impact of economic, political, and social factors on augmented reality technology acceptance in agriculture (livestock farming) sector in a developing country. Technology in Society, 67, 101739. DOI: https://doi.org/10.1016/j.techsoc.2021.101739
  32. Hosseinidoust, S. E., Sepehrdoost, H., & Moradi, F. (2024). investigating the affecting factors on capability poverty in the selected islamic countries emphasizing on globalization and economic growth. Economic Growth and Development Research.
  33. Javed, S., Farooq, M. A., & Dar, A. A. (2023). Effect of Globalization on Gross Domestic Product in Pakistan. Available at SSRN 4372290. DOI: https://doi.org/10.2139/ssrn.4372290
  34. Jeanneney, S. G., & Kpodar, K. (2011). Financial development and poverty reduction: Can there be a benefit without a cost?. The Journal of development studies, 47(1), 143-163. DOI: https://doi.org/10.1080/00220388.2010.506918
  35. Kakeu, C. B. P., Wendji, C. M., Kouhomou, C. Z., & Kamdoum, G. C. M. (2024). Can technological innovations contribute to more overcome the issue of poverty reduction in africa?. Technology in Society, 76, 102463. DOI: https://doi.org/10.1016/j.techsoc.2024.102463
  36. Kalim, R., Arshed, N., & Shaheen, S. (2019). Does competitiveness moderate inclusive growth: A panel study of low-income countries. Competitiveness Review: An International Business Journal, 29(2), 119-138. DOI: https://doi.org/10.1108/CR-11-2017-0074
  37. Kang-Kook, L. E. E. (2014). Globalization, income inequality and poverty: Theory and empirics. Social System Studies, 28, 109-134.
  38. Kis-Katos, K., & Sparrow, R. (2015). Poverty, labor markets and trade liberalization in Indonesia. Journal of development Economics, 117, 94-106. DOI: https://doi.org/10.1016/j.jdeveco.2015.07.005
  39. Kodongo, O., & Ojah, K. (2016). Does infrastructure really explain economic growth in Sub-Saharan Africa? Review of Development Finance, 6(2), 105-125. DOI: https://doi.org/10.1016/j.rdf.2016.12.001
  40. Levinsohn, J. A., Berry, S. T., & Friedman, J. (2003). Impacts of the Indonesian economic crisis. Price changes and the poor. In Managing currency crises in emerging markets (pp. 393-428). University of Chicago Press. DOI: https://doi.org/10.7208/chicago/9780226155425.003.0013
  41. Leyaro, V. (2009, March). Threshold and interaction effects in the trade-poverty relationship. In Eighth Annual GEP Postgraduate Conference. Leverhulme Centre for Research on Globalization and Economic Policy, University of Nottingham.
  42. Liang, Z. (2006). Threshold Estimation on the Globalization-Poverty Nexus. Retrieved January, 12, 2006.
  43. Mallek, R. S., Awad, A., Ozturk, I., & ben Douissa, I. (2024). Infrastructure development and poverty eradication in sub-Saharan Africa; Its effect and transmission channels. Cities, 144, 104658. DOI: https://doi.org/10.1016/j.cities.2023.104658
  44. Marti, L., & Puertas, R. (2023). Analysis of European competitiveness based on its innovative capacity and digitalization level. Technology in Society, 72, 102206. DOI: https://doi.org/10.1016/j.techsoc.2023.102206
  45. Meo, M. S., Kumar, B., Chughtai, S., Khan, V. J., Dost, M. K. B., & Nisar, Q. A. (2023). Impact of unemployment and governance on poverty in Pakistan: a fresh insight from non-linear ARDL co-integration approach. Global Business Review, 24(5), 1007-1024. DOI: https://doi.org/10.1177/0972150920920440
  46. Munnel, A. H. (1992). Policy Watch. Journal of Economic Perspectives 6, no. 4 (1992): 189-198. DOI: https://doi.org/10.1257/jep.6.4.189
  47. Naranpanawa, A., Bandara, J. S., & Selvanathan, S. (2011). Trade and poverty nexus: A case study of Sri Lanka. Journal of Policy Modeling, 33(2), 328-346. DOI: https://doi.org/10.1016/j.jpolmod.2010.08.008
  48. Nessa, H. T., & Imai, K. S. (2023). Trade openness and working poverty: empirical evidences from developing countries. International Trade, Politics and Development, 7(2), 58-76. DOI: https://doi.org/10.1108/ITPD-08-2022-0018
  49. Nissanke, M., & Thorbecke, E. (2006). A quest for pro-poor globalization. In Advancing Development: Core Themes in Global Economics (pp. 252-272). London: Palgrave Macmillan UK. DOI: https://doi.org/10.1057/9780230801462_14
  50. Nissanke, M., & Thorbecke, E. (2010). Globalization, poverty, and inequality in Latin America: Findings from case studies. World Development, 38(6), 797-802. DOI: https://doi.org/10.1016/j.worlddev.2010.02.003
  51. Ochi, A., Saidi, Y., & Labidi, M. A. (2023). Nonlinear threshold effect of governance quality on poverty reduction in South Asia and sub-saharan Africa: a dynamic panel threshold specification. Journal of the Knowledge Economy, 1-26. DOI: https://doi.org/10.1007/s13132-023-01271-3
  52. Osabohien, R., Matthew, O., Ohalete, P., & Osabuohien, E. (2020). Population–poverty–inequality nexus and social protection in Africa. Social Indicators Research, 151(2), 575-598. DOI: https://doi.org/10.1007/s11205-020-02381-0
  53. Pal, S. (2024). Do economic globalization and the level of education impede poverty levels? A non-linear ARDL approach. The Journal of Economic Inequality, 1-47. DOI: https://doi.org/10.1007/s10888-023-09608-3
  54. Perez-Moreno, S. (2011). Financial development and poverty in developing countries: a causal analysis. Empirical Economics, 41, 57-80. DOI: https://doi.org/10.1007/s00181-010-0392-5
  55. Qadir, N., & Majeed, M. T. (2018). The impact of trade liberalization on health: Evidence from Pakistan. Empirical Economic Review, 1(1), 71-108. DOI: https://doi.org/10.29145/eer/11/010104
  56. Qazi, A. (2024). Exploring the impact of global competitiveness pillars on sustainable development. Environmental Impact Assessment Review, 105, 107404. DOI: https://doi.org/10.1016/j.eiar.2023.107404
  57. Rakodi, C., Gatabaki-Kamau, R., & Devas, N. (2000). Poverty and political conflict in Mombasa. Environment and Urbanization, 12(1), 153-170. DOI: https://doi.org/10.1177/095624780001200111
  58. Ravallion, M. (2006). Looking beyond averages in the trade and poverty debate. World Development, 34(8), 1374-1392. DOI: https://doi.org/10.1016/j.worlddev.2005.10.015
  59. Rontos, K., Syrmali, M. E., Salvati, L., & Vavouras, I. (2024). Competitiveness, corruption, and income inequalities: approaching the ‘Janus’ face of development with simultaneous equation modelling. Quality & Quantity, 58(1), 343-364. DOI: https://doi.org/10.1007/s11135-023-01644-5
  60. Sasmal, R., & Sasmal, J. (2016). Public expenditure, economic growth and poverty alleviation. International Journal of Social Economics, 43(6), 604-618. DOI: https://doi.org/10.1108/IJSE-08-2014-0161
  61. Siddique, H. M. A., Shehzadi, I., & Shaheen, A. (2016). The impact of governance and institutions on education and poverty alleviation: a panel study of SAARC economies.
  62. Winters, L. A., McCulloch, N., & McKay, A. (2004). Trade liberalization and poverty: the evidence so far. Journal of economic literature, 42(1), 72-115. DOI: https://doi.org/10.1257/002205104773558056
  63. Wu, L., Ye, K., & Hastak, M. (2022). A comparison study on environmental policies for expressway construction projects between China and the US: A tiered analysis approach. Journal of Environmental Management, 305, 114298. DOI: https://doi.org/10.1016/j.jenvman.2021.114298
  64. Yang, G., Huang, X., Huang, J., & Chen, H. (2020). Assessment of the effects of infrastructure investment under the belt and road initiative. China Economic Review, 60, 101418. DOI: https://doi.org/10.1016/j.chieco.2020.101418
  65. Zhang, L., Zhuang, Y., Ding, Y., & Liu, Z. (2023). Infrastructure and poverty reduction: Assessing the dynamic impact of Chinese infrastructure investment in sub-Saharan Africa. Journal of Asian Economics, 84, 101573. DOI: https://doi.org/10.1016/j.asieco.2022.101573
  66. Usman, U. A., & Abubakar, S. A. (2023). The Rising Working Poverty, Dependency Ratio and its Effect on Labour Productivity in Sub-Saharan Africa. ABUAD Journal of Social and Management Sciences, 4(1), 148-161. DOI: https://doi.org/10.53982/ajsms.2023.0401.09-j
  67. Zurrah, Z., Aliasuddin, M. A., & Saputra, J. (2024). The Effect of Institutional Quality on Agricultural Value Added in ASEAN–8. DOI: https://doi.org/10.59781/IDMO4523

Most read articles by the same author(s)