Globalization and Poverty: The Engine of Economic Growth and Development

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Today’s world is a place of exploding opportunities. Technological change is transforming the world. Even in the midst of intermittent economic crisis, people in the West live better than at any point of human history.

Yet tragedy abounds in this world of plenty. Hundreds of millions of people live in miserable poverty. Malnutrition and even starvation stalk many lands. The opportunities that people in the West take for granted are absent from much of the world. Jesus said that “The poor you will always have with you,” which means that the obligation to assist those in need is also constant.1 The obligation is not only to those among the community of faith. “Let us do good to all people,” the Apostle Paul wrote the Galatian church.2

Industrialized states have tried different strategies to spur economic growth around the world. Communism, socialism, and other state-led development systems have been a bust—disastrously so. Foreign aid has done more to retard than speed growth. Well-intentioned efforts like the Peace Corps have had little permanent or systematic effect.

Without doubt, many such international efforts have been well-intentioned. However, good intentions are not enough. Suppose a brother or sister is in need, wrote James. “If one of you says to him, ‘Go, I wish you well; keep warm and well fed,’ but does nothing about his physical needs, what good is it?”3 Similarly, what good are government “aid” programs which do not in fact help?

What is working, in contrast, is the process of globalization. Often there is no intent to help anyone other than the individual buyers and sellers. However, bringing underdeveloped states into the global system of exchange—even if sometimes inadvertently and incidentally—has proved to be a powerful engine of development. Such growth, though not always distributed equally, has in turn provided a powerful force for alleviating poverty. Quite simply, “integration accelerates development.”4 Globalization is proving to be the most powerful force against global poverty every discovered.

Both wealthy, industrialized nations and poor, developing nations have a stake in globalization. However, World Bank economists David Dollar and Aart Kraay argue, “After all the rhetoric about globalization is stripped away, many of the policy questions come down to whether the rich world will make integrating with the world economy easy for those poor communities that want to do so. The world’s poor have a large stake in how the rich countries answer.”5

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Doug Bandow serves as Senior Research Fellow at the Institute for Faith, Work & Economics. He is also a Senior Fellow at the Cato Institute and in International Religious Persecution at the Institute on Religion and Public Policy.

Scriptures taken from the Holy Bible, New International Version®, NIV®. Copyright ©1973, 1978, 1984, 2011 by Biblica, Inc.™  Used by permission of Zondervan. All rights reserved worldwide.  The “NIV” and “New International Version” are trademarks registered in the United States Patent and Trademark Office by Biblica, Inc.™ 

1 Mark 14:7, NIV.
2 Gal. 6:10.
3 James 2:16.
4 David Dollar, “Globalization, Inequality, and Poverty Since 1980,” World Bank (2001): 2.
5 David Dollar and Aart Kraay, “Spreading the Wealth,” Foreign Affairs 81 (2002): 133.

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