This document discusses the relationship between economic growth, globalization, and poverty reduction. It reviews literature that presents conflicting evidence on whether countries experiencing high growth rates necessarily succeed in reducing poverty levels. The author aims to contribute to this debate by quantitatively examining the statistical correlation between growth and poverty rates using regression analysis. The conclusion is that growth alone is not a sufficient condition for poverty alleviation, suggesting a more comprehensive policy approach may be needed.
This document discusses the relationship between economic growth, globalization, and poverty reduction. It reviews literature that presents conflicting evidence on whether countries experiencing high growth rates necessarily succeed in reducing poverty levels. The author aims to contribute to this debate by quantitatively examining the statistical correlation between growth and poverty rates using regression analysis. The conclusion is that growth alone is not a sufficient condition for poverty alleviation, suggesting a more comprehensive policy approach may be needed.
This document discusses the relationship between economic growth, globalization, and poverty reduction. It reviews literature that presents conflicting evidence on whether countries experiencing high growth rates necessarily succeed in reducing poverty levels. The author aims to contribute to this debate by quantitatively examining the statistical correlation between growth and poverty rates using regression analysis. The conclusion is that growth alone is not a sufficient condition for poverty alleviation, suggesting a more comprehensive policy approach may be needed.
This document discusses the relationship between economic growth, globalization, and poverty reduction. It reviews literature that presents conflicting evidence on whether countries experiencing high growth rates necessarily succeed in reducing poverty levels. The author aims to contribute to this debate by quantitatively examining the statistical correlation between growth and poverty rates using regression analysis. The conclusion is that growth alone is not a sufficient condition for poverty alleviation, suggesting a more comprehensive policy approach may be needed.
Ibrahim F. Akoum Arab Monetary Fund, Abu Dhabi, United Arab Emirates Abstract Purpose To review the literature on the relationship between growth, globalization, and poverty, and present empirical evidence on whether countries registering high growth rates do necessarily succeed in reducing the incidence of poverty. Design/methodology/approach Notwithstanding data and methodological problems cited in the literature, this paper makes an effort to quantitatively examine the issue of statistical correlation between growth and poverty variables, through regressing the share of population in poverty on growth rates of countries for which data is available from World Bank surveys. Findings The paper concludes that countries registering high growth rates do not necessarily succeed in reducing poverty, thereby, holding that a wide-ranging policy approach could be more effective in poverty reduction than the broad-based growth policy approach. Originality/value The debate among academics and practitioners over the causal relationship between growth and poverty has not rendered any conclusive evidence that growth is a sufcient condition for reducing poverty, hence the difculty facing policy makers on the most effective approach for poverty reduction. This paper is an attempt to contribute to this debate and assessing whether to embrace the broad-based growth or pro-poor growth policies. Keywords Poverty, Globalization, Economic growth Paper type Research paper Introduction Poverty amid plenty is the worlds greatest challenge (James D. Wolfensohn, Former World Bank President). Eradicating poverty is an ethical, social, political and economic imperative of humankind (UN General Assembly, 1996). Many rst-rate globalizers have fth-rate records on poverty reduction (Watkins, 2002). Growth and poverty reduction are supposedly the ultimate goals of all development endeavors. International development, nancial, and trade organizations, as well as practitioners and academics in this eld attest to this assertion. For example, the World Bank holds that its mission is to ght poverty and put it at the center of all the work it undertakes (World Bank, 2001, p. v). On its part, the World Trade Organization (WTO, 2005) contends that its goal is to improve the welfare of the peoples of the member countries, through promoting trade liberalization, the result of which is a more prosperous, peaceful, and accountable economic world. Even the International Monetary Fund (IMF), which is supposedly a monetary rather than a development institution, has commenced actively working toward poverty reduction in the past few years, through the provision of nancial support via its concessional lending facility, the Poverty Reduction and Growth Facility (PRGF), and debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative. In most low-income countries, IMFs support is underpinned by Poverty Reduction The current issue and full text archive of this journal is available at www.emeraldinsight.com/0306-8293.htm IJSE 35,4 226 International Journal of Social Economics Vol. 35 No. 4, 2008 pp. 226-238 qEmerald Group Publishing Limited 0306-8293 DOI 10.1108/03068290810854529 Strategy Papers (PRSP), which are prepared by country authorities to describe a comprehensive framework that is being implemented to promote growth and reduce poverty in the country (IMF, 2006). As is the case in most economic elds of study, there have been varying assessments of the progress made so far on poverty eradication, and of the adequacy of varying approaches advocated by academics and practitioners towards achieving this goal. The literature is ample with studies supporting both differing schools of thought. Yet, there is limited scientic consensus on the causes and the appropriate policies needed to help achieve growth and poverty reduction (Bird, 2004). This paper reviews some of the literature and empirical research on this subject and presents quantitative evidence that growth by itself is not a sufcient condition for poverty alleviation. The paper will present in the next section a quick overview of the contrasting claims on the progress in poverty reduction. It will then present the broad-based growth and pro-poor growth approaches to poverty, followed by a section containing a quantitative analysis of the causal relationship between growth and poverty. The paper concludes with some policy implications. Poverty eradication record: contrasting claims Different claims have been heard within the development community about how just much progress has been made against poverty (Ravallion, 2003). As a matter of fact, research has presented conicting arguments and estimations, with some claiming that overall poverty is on the decline, while others claim otherwise. The World Banks (2001, p. 21) gures show that between 1987 and 1998 the share of the population in developing and transition economies living on less than $1 a day fell from 28 percent to 24 percent. Further, it is estimated that the number of the poor in the world were 200 million fewer in 1998 than in 1980 (World Bank, 2002). The millennium development goals (MDGs) web site portals estimates reveal that the proportion of people living on less than $1 a day has fallen to about 19 percent in 2002 from nearly 28 percent, its level in 1990, and that in 2001 there were 100 million fewer people living in poverty than in 1990. Chen and Ravallion (2004, p.1) estimate that there were almost 400 million fewer people living in poverty in 2001 than 20 years earlier, adding that if the trends over 1981-2001 continue then the aggregate $1 per day poverty rate for 1990 will be almost halved by 2015. However, many others take issue with these ndings and present contrary estimates to support their argument that the international community seems incapable of coming to grips with the poverty menace and thereby reach the goal of halving poverty by 2015, as agreed in 2000 by the United Nations, as a main component of the MDGs. Questioning the empirical basis of the neoliberal argument, Wade (2004, p. 572) considers that the World Banks poverty estimates contain a large margin of error for a number of reasons mainly that poverty headcount is very sensitive to the precise level of the international poverty lines and to the reliability of household surveys, especially that the bank introduced a new methodology in 1990, making comparisons with previous estimates unreliable. Deaton (2002) presented a similar argument. The United Nations Conference on Trade and Development (UNCTAD, 2006, p. 31) suggests that the incidence of poverty did not decline in the 1990s in the least developed countries (LDCs) as a group and has remained at 50 percent of the total Globalization, growth, and poverty 227 population, and that if this trend continues, the number of people living in poverty in the LDCs will increase from 334 million in 2000 to 471 million in 2010. The Human Development Report 2005 (UNDP, 2005, pp. 3-4) offers a more somber picture stating that about 2.5 million people live on less than $2 a day (40 percent of the worlds population), 10.7 million children every year do not make it to their fth birthday, and in 2003 the HIV/AIDS pandemic claimed three million lives and left ve million more people infected, and the MDG target of universal primary education will be missed on current trends. On its part, the World Health Organization (WHO, 2006, p. 16) estimates that some diseases associated with a lack of access to safe drinking-water and inadequate sanitation results in nearly 1.7 million deaths annually. Beyond statistics These essential arguments with respect to just how much poverty has been reduced have been associated with equally vital discussions on what economic policies are most effective in combating poverty and achieving the MDGs goal of halving extreme poverty by 2015. There are primarily two main strands of thought, one of which presents globalization and economic growth as the ultimate answer for poverty reduction, while the other contends that growth alone has not been a panacea. It would be expedient here to emphasize the fact that both sides acknowledge the shortcomings of the data, statistics, and methodologies used and that underpin their policy inferences, hence the need for a more focused approach on such an important matter. And regardless of the various statistics on the number of people still in poverty, all agree that more ought to be done in this regard. Eradicating poverty is an ethical, social, political and economic imperative of humankind (UN General Assembly, 1996). It is only in this spirit that the issue of poverty eradication can be adequately tackled, for economic theory alone can neither explain nor come to grips with poverty and inequality. It is not simply scarcity of resources that is plaguing the poor, but it is rather the misuse of resources and their improper distribution. Nevertheless, the scope of this paper is limited to the economic aspect of poverty alleviation, in particular, the forces of globalization and growth, with regard to their impact on poverty. Broad-based growth advocates The broad-based growth proponents claim that poverty is on the decline, due primarily to the forces of globalization and the growth it engenders. In other words, they accord great importance to globalization as a prime and cogent force behind growth and in the ght against poverty. To them, the process of globalization is considered as a crucial engine of growth and unprecedented gains in human welfare over the past 50 years, through the spread of knowledge, better division of labor, increased productivity, and access to foreign direct investment (Kohler, 2002). It is argued that globalization, in way of free trade and open capital markets has been instrumental in producing an optimal allocation of the worlds resources (Krueger, 2002), and that it has boosted incomes and helped raise living standards in many parts of the world (Aninat, 2002). A large body of the IMF literature backs this opinion (Masson, 2001). IJSE 35,4 228 The World Bank (2000, p. 5) espouses an identical view holding that globalization, through its impact on growth, has played an important catalytic role in global prosperity and in lifting more people out of poverty in the past century, than in all of human history. It asserts that it is not openness, but rather the lack of it is what increases inequality between countries, citing that closed developing economies have performed much more poorly than more open ones. The World Development Report maintains that growth in the 1980s and 1990s was a powerful force for reducing income poverty (World Bank, 2001, p. 47) and that evidence conrms that economy-wide growth improves the incomes of poor people and, in the longer run, reduces non-income poverty (World Bank, 2001, p. 32). The World Bank (2004, pp. 2-3) later on repeats this argument with a caveat, that is economic growth will not be enough to reach the MDGs and that greater resource transfers to the developing countries, along with better policies and institutions in these countries, are needed to enhance productivity of domestic and external resources. In the same line of reasoning, Dollar (2005, p. 155) argues that poverty reduction in low-income countries is very closely related to growth rates and that the accelerated growth rates in these countries have led to unprecedented poverty reduction. Likewise, Berg and Krueger (2003, p. 3) afrm that changes in average per capita income are the main determinants of changes in poverty. Emphasizing the impact of trade, the WTO (2000) afrms that trade liberalization is generally a strongly positive contributor to poverty alleviation. Supporting these ndings (Dollar and Kraay, 2001, p. 27), conrm that there is no evidence that more openness and trade is associated with increased inequality. Maintaining that there is no systematic relationship between changes in trade volumes and changes in household income inequality, they conclude that the evidence supports the view that open trade regimes lead to faster growth and poverty reduction in poor countries. This is also afrmed by Berg and Krueger (2003, pp. 37-9) who examined the impact of trade policy on poverty reduction and concluded that trade openness does not have systematic effects on the poor beyond its effects on overall growth, and that evidence supports the view that trade openness contributes greatly to growth. Hence, the relationship between poverty and openness is determined through growth. Pro-poor growth advocates In contrast with the broad-based growth views, the pro-poor growth proponents, while recognizing the necessary role played by openness and growth, maintain that this does not constitute a sufcient condition for poverty reduction. They suggest a broader approach which includes social, economic, and political dimensions, arguing that focusing exclusively on economic growth and income generation as a development strategy is ineffective as it deepens the poverty of many and does not acknowledge intergenerational transmission of poverty (United Nations, 2005, p. 1). Klasen(2005, p. 5) concurs that while economic growthis the basis for increasingnational income, it does not necessarily result in poverty reduction since policies that merely concentrate on growth may only be looking at a part of the development problem. Laying emphasis on the signicance of equity in this regard, the UNDP (2005, p. 53) asserts that extreme inequality is not just bad for poverty reduction but it is also bad for growth, and long-run efciency and greater equity can be complimentary. Globalization, growth, and poverty 229 The World Development Report (World Bank, 2004, p. 2) maintains that although the world as a whole is on track to eradicate extreme poverty, primarily in China and India, the world is off track in reaching the other goals related to non-income poverty. Further, the World Banks MDGs portal, despite its estimates showing reduction in the numbers of the poor, it concedes that in many regions the number of hungry people continues to grow, and progress in eradicating hunger and reducing rates of undernourishment have been too slow in most regions to reach the MDGs target (MDGs portal, http://ddp-ext.worldbank.org/ext/GMIS/gdmis.do?siteId 2&goalId 5 &menuId LNAV01GOAL1). Thus, advocates of pro-poor growth generally question the wisdom that trade liberalization and greater openness is the way towards greater growth and poverty eradication. Examining the nancial integration aspect of openness, Prasad et al. (2003, p. 5) concludes that if nancial integration has a positive effect on growth, there is as yet no clear and robust empirical proof that the effect is quantitatively signicant. Stiglitz (1999) argues that too often the benets of development have not been evenly shared in countries during the boomand growth periods and that economic growth does not help the poor much in countries where distribution of wealth is highly unequal. Accordingly, Stiglitz (2002, p. 8) faults the way globalization has been managed, arguing that in too many instances, its benets have been less than its advocates claim. Further yet, Stiglitz (2002, p. 248) warns that if globalization continues to be conductedinthe way that it has been in the past, then it will not only fail in promoting development but it will also continue to create poverty and instability. Elaborating on this argument, an UNCTADstudy (Rowthorn and Kozul-Wright, 1998, p. 31) takes issue with the Washington Consensus and the claim that globalization has rendered domestic determinants of growth subordinate to international economic forces and that it is the primary factor of income convergence across the global economy. The studyconcludes that empirical evidence insupport of the globalizationthesis is veryweak. The report concludes that: . . . the successful economies of East Asia, far from illustrating the virtue of rapid liberalization and unfettered global market forces, conrm the complexities of policy making in an interdependent world. Some has been more blunt in their criticism of the negative repercussions of globalization, stating that current practices in international trade are reinforcing income inequalities. For instance, Watkins (2002) holds that realities in some Latin American and Asian countries do not t well with the argument that globalization is working for the poor. Citing Latin America as a striking example, he notes that the region have liberalized imports far more rapidly than in any other region, turning as a model of trade openness, but the returns in terms of poverty reduction have been abysmal. As insightfully put by Watkins: Countries such as China, Thailand, and Vietnam may be premier globalizers. They also have a strong record on economic growth and poverty reduction. Yet, they have liberalized imports very slowly and still have relatively restrictive trade barriers. Conversely, countries such as Brazil, Haiti, Mexico, Peru, and Zambia have been world-beaters when it comes to import liberalization, but have a weak record on growth and poverty reduction. In short, many rst-rate globalizers have fth-rate records on poverty reduction. IJSE 35,4 230 Viewing globalization as an uneven process that leads to a growing gap between the rich and the poor, (Khor, 2000) faults it for engendering economic losses, social dislocation, growing inequalities, and even the erosion of independent national policy-making capacity. Fortunately, the debate over the impact of globalization and growth on poverty and income inequality has not been entirely polarized. For example, between the extreme view insisting that globalization, through growth, has increased world prosperity and reduced poverty, and the opposing extreme view blaming globalization for increasing poverty and perpetuating economic dependence of poor countries, there is a large continuum, along which numerous points of views belong. Globalization is not in itself a folly (Sen, 2001); it can be a force for good and has the potential to benet all, including the poor (Stiglitz, 2002). The following section attempts to empirically examine the extent to which economic growth is associated with poverty reduction indicators. Methodology It is expedient at the outset to lay emphasis on the intricate conceptual and methodological problems, as well as data limitations confronting researchers and statisticians in their attempts to devise estimates of the number of people below poverty lines. The signicance of this issue stems from the fact that it greatly inuences the researchers inferences and policy recommendation. Ravallion (2003) attributes the differing views in this debate to differences in the concepts and denitions used, as well as differences in data sources and measurement assumptions. For instance, the quality of poverty estimates reported in the WDR 2000/2001, was questioned by many researchers. For example, (Pogge and Reddy, 2006) contended that the banks estimates of the extent, distribution and trend of global income poverty are neither meaningful nor reliable and that the systematic distortions introduced in the measurement methodology likely leads to a large understatement of the extent of global income poverty and to an incorrect inferences that it has declined. Dollar and Kraay (2001, p. 27) admit that there are substantial difculties in comparing income distribution data across countries, along with a variety of econometric difculties. Milanovic (2002) presents similar difculties. Arguing that world poverty may or may not have increased since the 1990 and that this assessment is critically dependent on the assumptions made, Reddy and Minoiu (2006) conclusions highlight the importance of improving global poverty statistics. Notwithstanding data and methodological problems, this paper makes an effort to answer some questions related to the issue of correlation between growth and poverty variables. In particular, I will investigate the patterns of poverty incidence and GDP growth by answering the following three questions: (1) Do countries with higher real GDP growth rates have lower shares of population in poverty than countries that register negative or low growth rates? (2) Do countries that register real GDP growth rates reduce the share of population in poverty over time? (3) Does economic growth impact urban and rural poverty differently? The evidence presented in this study indicates that the answer for the three above stated questions is negative. Globalization, growth, and poverty 231 As shown in Figure 1, I regressed the share of population in poverty on growth rates in countries for which data are available for both variables. The results did not show any evidence that countries with higher GDP growth rates have lower percentages of the population living in poverty. In this exercise, I used the poverty data reported in the world development indicators (WDI) of the World Development Report 2000/2001, which summarize the results of surveys conducted to measure the share of the population living below the national poverty line. And since poverty surveys for different countries have been conducted at different years, I regressed the share of population living below poverty in each particular country on the average annual GDP growth of the country during the last ve years preceding the year in which the poverty survey had been conducted. Gross domestic product data series was obtained from the online database of the WDI of the World Bank. The results indicate that many countries with relatively high average annual GDP growth rates have had relatively higher shares of the population in poverty than many countries with low growth rates or even countries that registered signicant decline in gross domestic product. For instance, countries like India, Honduras, Malawi, Niger, Vietnam, Guatemala, Lesotho, Nepal, and El Salvador registered relatively high average annual GDP growth rates ranging between around 3.5 percent (Niger) and 6.9 percent (Vietnam), while the share of population in poverty in these countries was high with a range between 41 percent (India) and 63 percent (Niger). By contrast, countries like Ukraine, Russia, Moldova, Estonia, and Belarus with GDP declining at an average rate ranging between 7.4 percent (Estonia) and 16.7 percent (Ukraine) have much lower shares of population in poverty such as 31.7 percent in Ukraine and as low as 8.9 percent in Estonia. Likewise, Figures 2 and 3 show a similar pattern in the rural and urban areas, showing that economies with higher growth rates do not have lower shares of population in poverty in rural or urban areas. Figure 1. GDP growth and share of population in poverty R sq 0.005 0 10 20 30 40 50 60 70 80 20 10 0 10 GDP Growth %
o f
P o p u l a t i o n
i n
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7 IJSE 35,4 232 Regarding the question of whether countries that register GDP growth rates tend to witness reduction in the share of population in poverty over time, Figure 4 shows that there is no indication that this is the case. Using the World Development Report 2000/2001 data on poverty for countries for which two poverty surveys are available, I plotted each countrys average annual GDP growth rate registered between the two surveys against the percentage point change of population in poverty. The results of this exercise show that in some countries growth has been associated with a reduction in the share of population in poverty, while in others growth has been associated with an increase in the share of population in poverty. Figure 2. GDP growth and urban poverty R sq 0.007 10 40 90 15 5 5 15 GDP Growth %
o f
R u r a l
P o p u l a t i o n
i n
P o v e r t y Figure 3. GDP growth and rural poverty R sq 0.007 10 40 90 15 5 15 GDP Growth %
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P o p u l a t i o n
i n
P o v e r t y 5 Globalization, growth, and poverty 233 For example, as shown in Table I, in Bangladesh two surveys were conducted the rst of which in 1990-1991 and the second in 1995-1996. Despite the fact that real average annual GDP growth rate was about 4.6 percent during the period between the two surveys (1990-1996), the share of population below national poverty line rose drastically from 24.7 percent to 35.6, that is nearly 11 percentage points higher in Figure 4. GDP growth and poverty reduction 10 5 0 5 10 15 20 A l g e r i a A r g e n t i n a B a n g l a d e s h C a m b o d i a C h i l e C h i n a C o l o m b i a D o m i n i c a n
R e p H o n d u r a s H u n g a r y I n d i a I n d o n e s i a J o r d a n M o r o c c o N i g e r i a P h i l i p p i n e s S r i
L a n k a T h a i l a n d T u n i s i a Z a m b i a % GDP Growth Percentage points change in people in poverty Percentage of population below poverty line a Survey 1 Survey 2 Percentage of point changes Percentage of avg. GDP growth between the two surveys b Algeria 12.2 22.6 10.4 0.95 Argentina 25.6 17.6 28 8.3 Bangladesh 24.7 35.6 10.9 4.6 Cambodia 39 36.1 22.9 4.9 Chile 21.6 20.5 21.1 6.3 China 6 4.6 21.4 8.3 Colombia 16.9 17.7 0.8 4 Dominican Rep. 24.5 20.6 23.9 0.8 Honduras 50 53 3 7.1 Hungary 1.6 8.6 7 24.9 India 40.9 35 25.9 5.9 Indonesia 11.3 20.3 9 24.7 Jordan 15 11.7 23.3 6.3 Morocco 13.1 19 5.9 2 Nigeria 43 34.1 28.9 3.7 Philippines 40.6 40.6 0 5.2 Sri Lanka 40.6 35.3 25.3 3.6 Thailand 18 13.1 24.9 8.1 Tunisia 19.9 14.1 25.8 2.8 Zambia 68 86 18 1 Notes: a Source of poverty data: World Development Report 2000/2001; b calculated by the author based on real GDP gures from online WDI of the World Bank Table I. GDP growth and poverty IJSE 35,4 234 1995-1996 than it was in 1990-1991. On the other hand, in Jordan two surveys were conducted in 1991 and 1997, and during this period an average annual GDP growth of about 6.3 percent was associated with a decline in the share of population below national poverty line from 15 percent to 11.7 percent, respectively, which represents a decline of about 3.3 percentage points. Table I also shows that, out of the twenty countries for which data was available for this exercise, I found that only in 11 countries an increase in GDP growth has been associated with a reduction in the share of population below the national poverty line. On the contrary, in Algeria, Bangladesh, Colombia, Honduras, Morocco, and Zambia, growth was associated with an increase in the share of population below the national poverty line. Conclusion and policy implications It is important to note that the lack of enough data on poverty, in addition to the substantial technical problems associated with measuring poverty in the rst place, do not allow one to make conclusive statements regarding the results of this study, or any similar study for that matter. To avoid falling in the fallacy of composition, denite and more accurate answers require in depth country-specic case studies. Nevertheless, simple statistical methods used in this paper support the arguments that higher economic growth rates are not necessarily translated into lower poverty rates. What is of great signicance though is that due to the lessons imparted by the nancial crises, notably the ones erupted in South East Asia in the late 1990s, most observers and concerned parties have narrowed the theoretical gap with regard to the impact of unfettered nancial and trade liberalization on overall economic stability. The IMF, a staunch proponent of nancial and trade liberalization, has itself published research questioning the wisdom of pushing for unfettered capital ows, concluding that empirical evidence casts doubt on the theoretical models claiming that nancial globalization promotes economic growth in developing countries. The research found that it is difcult to establish a strong causal relationship between nancial globalization and economic growth (Prasad et al., 2003, p. 5). Echoing this growing line of reasoning (Khor, 2000) calls for a selective approach to liberalization as a more appropriate method than rapid liberalization, highlighting the importance of a countrys level of development and preparedness to take on the challenges of subjecting local production units to foreign competition. While globalists vehemently argue the case for globalization and growth and their positive impact on poverty, anti-globalists still consider globalization as a tool and a new form for perpetuating the interests of the rich countries at the expense of the poor. Yet others do not fault globalization itself, but rather the unfair distribution of its fruits (Sen, 2001). This does not make the life of policy makers any easier. A signicant body of research (Jenkins, 2004) does not support any simple generalization about the impacts of globalization on poverty as these impacts are highly context specic, which should be a warning to policy makers against generalized policy advice. Globalization seems to be irreversible. Thus, the question that needs to be addressed is how we can better govern this process to make it more inclusive and fairer than the current state of affairs. That is, it is not globalization as a process that ought to be rejected, but rather it is poor governance of globalization is what needs to be contested. If managed properly and fairly for the benet of all, globalization could be a remarkably Globalization, growth, and poverty 235 positive force. Naturally, this requires fundamental alteration of the global status quo, starting with a genuine political commitment of the developing and developed countries alike to conceive an improved global nancial and economic landscape. As many experiences in the past have shown, it is not such an impossible task for the international community to act together in an effort to make available the resources necessary to wage a war against a menace. For instance, the whole international community has been galvanized to ght terrorism in the past few years. This is a rightfully pursued cause. But had the same enthusiasm, commitment, and resources been given to the ght against an equally abhorring global calamities, namely poverty and inequality, the world would have been a much better place (Akoum, 2004). By reducing, and hopefully eventually eliminating, abject poverty, the international community increases the purchasing power of billions of people, thereby enlarging markets and increasing global aggregate demand for goods and services. It is not just a moral case; it is benecial economically. Data and methodological limitations facing researchers in this eld imply that country-specic case studies could prove better suited to help policy makers devise poverty reduction policies. It is essential, too, to improve the accuracy and quality of poverty data and refrain from using it as a tool to support preconceived ideas and economic theories. 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World Bank (2004), World Development Report 2004: Making Services Work for Poor People, Oxford University Press, New York, NY. Globalization, growth, and poverty 237 WTO (2000), WTO news: 2000, press releases, available at: http://www.wto.org/english/news_e/ pres00_e/pr181_e.htm (accessed 13 June 2000). WTO (2005), The WTO in Brief, available at: http://www.wto.org/english/thewto_e/whatis_e/ inbrief_e/inbr00_e.htm Further reading World Bank (1990), World Development Report 1990: Poverty, Oxford University Press, New York, NY. About the author Ibrahim F. Akoumholds a PhD and an MA in Public Policy and Political Economy (University of Texas, Dallas), and MBA in Management Information Systems (University of Dallas). He is Division Chief, Financial Markets Division, at the Arab Monetary Fund in the UAE. He has 20 years of professional experience in economic policy analysis and modeling, economic development, capital markets, and academia. Previously, he worked at the World Bank in Washington DC for nearly ve years. He served as an economic advisor and consultant to regional and international organizations. He was also adjunct Professor of Economics in the USA. He has published books and articles in areas including development economics, globalization, governance, and political economy. Ibrahim F. Akoum can be contacted at: [email protected] IJSE 35,4 238 To purchase reprints of this article please e-mail: [email protected] Or visit our web site for further details: www.emeraldinsight.com/reprints