Americas Quarterly
Spring 2012
Abstract
The proximate cause of poverty is low productivity. Poor people are poor because their labor produces too little to adequately feed and house them, let alone provide adequately for other needs such as health care and education.
Low productivity, in turn, has diverse and multiple causes. It may be the result of lack of credit, lack of access to new and better technologies, or lack of skills, knowledge or job opportunities. It may be the consequence of small market size—or exploitative elites, in cahoots with the government, who block any improvement in economic conditions that would threaten their power.
Globalization promises to give everyone access to markets, capital and technology, and to foster good governance. In other words, globalization has the potential to remove all of the deficiencies that create and sustain poverty. As such, globalization ought to be a powerful engine for economic catch-up in the lagging regions of the world.
And yet, the past two centuries of globalization have witnessed massive economic divergence on a global scale. How is that possible?
This question has preoccupied economists and policy makers for a long time. The answers they have produced coalesce around two opposing narratives.
Citation
Rodrik, Dani. "Global Poverty Amid Global Plenty: Getting Globalization Right." Americas Quarterly. Spring 2012.