Globalisation, workers and the poor

March 12, 2007

One of my favourite bloggers Ben Muse published recently two interesting posts on globalisation and working conditions and on globalisation and poverty alleviation.

Two important findings:

1) Globalisation and working conditions
Stanford Labour Economist Robert J. Flanagan, who just published a new book of globalisation and working consitions, finds:

(quoting from the Foregin Affairs review Ben Muse mentions in his post):

“Drawing on analyses of a database on international labor conditions assembled for this project and a growing research literature on globalization and labor conditions, the book reveals how conditions have changed during the late 20th century globalization, and presents and evaluates evidence on links between globalization mechanisms and labor conditions. The book presents and evaluates evidence on how economic growth, international trade, migration and multinational companies influence labor conditions.

The analysis and evidence indicate that countries that are open to international trade have superior labor conditions. Moreover, foreign direct investment mainly flows to countries with superior labor conditions, and wages and working conditions in multinational companies are superior to employment conditions in host-country firms. The book also reviews the historical effects of international migration on wages (and other working conditions) and discusses the role of modern barriers to international migration. The evidence indicates that each of the mechanisms of globalization is associated with the improvements in working conditions predicted by international trade theory and with improvements in labor rights.”

2) Globalisation and poverty

National Bureau for Economic Research (NBER) researchers conclude:

“the relationship depends not just on trade or financial globalization but on the interaction of globalization with the rest of the economic environment: investments in human capital and infrastructure, promotion of credit and technical assistance to farmers, worthy institutions and governance, and macroeconomic stability, including flexible exchange rates.”

For more, please read Ben Muse’s posts, and hopefully the new books he cites (hope I’ll find to do so as well very soon!).

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