In an article published on the web site of the Cato Institute, Johan Norberg makes the case that globalization is the key to reducing poverty and that rather than limit it, as anti-globalization activists would have us do, we should accelerate it and the institutions it presupposes.
As Norberg notes, in the late 19th century Sweden was actually poorer than the Congo is today — life expectancy and infant mortality were both significantly worse in Sweden then than in the Congo today. But trade with France and England led to an industrial boom in Sweden which quadrupled the size of the Swedish economy by 1950.
The evidence, Norberg writes, is that countries that are integrated into the global system of trade dramatically outperform those that are not,
But when we look at the poor countries with good institutions, and which are open to trade, we see that they are making rapid progress, much faster than the wealthy countries. A classic study by Jeffrey Sachs and Andrew Warner of 117 countries in the 1970s and 1980s showed that open-developing countries had an annual growth rate of 4.5 percent, compared with 0.7 percent in closed-developing countries and 2.3 percent in open industrialized countries. A recent World Bank report concluded that 24 developing countries with a total population of 3 billion are integrating into the global economy more quickly than ever. Their growth per capita has also increased from 1 per cent in the 1960s to 5 per cent in the 1990s (compared to a rich country growth of 1.9 per cent). At the present rate, the average citizen in these developing countries will see her income doubled in less than 15 years.
In fact, while anti-globalization activists point to the continued problems in sub-Saharan Africa, Norberg notes that Africa is the most illiberal part of the world with,
. . . the most controls and regulations, and the weakest tradition of property rights. When anti-globalists blame globalization for African misery, it rings just as bizarre as the North Korean officials who once explained to a visiting Mongolian politician that the average North Korean is unhappy and miserable because he is sad about American imperialism.
Unfortunately, the United States and Europe continue to set the wrong example — closing their markets to significant competition from the developing world and resorting to protectionist measures to shield domestic industries from competition.
Source:
How globalization conquers poverty. Johan Norberg, Cato Institute, September 2003.