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Guillermo de la Dehesa. Do not go any further if you are looking for another polemic about globalization and its problems. Issues of Poverty and Income Distribution examines the two fundamental arguments that are often raised against globalization: Here Guillermo de la Dehesa, current Chairman of the Centre for Economic Policy Research CEPRdemonstrates how, despite popular belief, acceleration of globalization actually stands to reduce the levels of poverty and inequality worldwide, and explains, in detail, the ways in which wealthy nations and developing countries alike have failed to implement changes that would result in a reversal of these social ills.

Mario Bilbao Lab

He spent twenty years in various Spanish governmental positions from the late s through to the s. Since leaving the public sector he has held a number of chairman comprdnder chief executive positions in the private sector; he is currently Vice Chairman of Goldman Sachs Europe, Independent Director of the Santander Banking Group and of Aviva plc, and Chairman of the Instituto de Empresa Business School. Aymara women, La Paz, Bolivia.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs, and Patents Actwithout the prior permission of the publisher. What do we known about globalization? Includes bibliographical references and index.

Furthermore, the publisher ensures that the text paper and cover board used have met acceptable environmental accreditation standards. For further information on Blackwell Publishing, visit our website: Do read the book if you want to better understand globalization and its implications, and if you want to know what needs to be done to extend its benefits to countries and people that are not benefiting from it as much as they could.

This is a sober and balanced book. The approach is reasoned, relying heavily on the professional economics literature and on evidence.

He starts with technological progress, which is above all else the driver of economic growth. He argues that because scientific and technical advances are generated largely in the richer countries, such progress has an inherent tendency to increase the inequalities between rich and poor countries, and within countries between those who can invent or operate the new technologies, and those who cannot.

This argument reflects the consistent empirical finding in the United States that it is primarily the nature of recent technical progress, globalizadion than foreign competition, that has caused income gaps to widen since the s.

Views expressed are those of the author, and not necessarily of the Bank of Israel. But in a globalized world, technical progress in one country will affect other countries — and of course, if countries want to benefit not only from access to the markets in other countries, as lx export-led ve, but also from gaining access to the newest technologies, they need to open up, that is, to globalize.

If anything, de la Dehesa may concede too much to the opponents of globalization by emphasizing the potential negative impacts of technical progress in one country df other countries.

There are also positive impacts, for instance the green revolution. Further, countries not at the technology frontier do not have gloablizacion invent technology to benefit from technical progress, they just need to import it. That is what China has done, to great effect, and what others can do, including by welcoming foreign direct investment. That is to say, the policy framework in a developing country can have a large impact on the extent to which the country benefits from the potential growth offered by globalization, that is, by integration into the global economy.

Comprender La Globalizacion (Spanish, Paperback)

After thoroughly reviewing in chapters 1—4 the many forces related to globalization that influence its potential impact on both poverty and inequality, de la Dehesa turns in chapter 5 to discuss the global distribution of income. Here he draws the distinction between the global distribution of income among individuals, no matter what country they live in, and among the average incomes of different countries.

Almost certainly the individual distribution of incomes has been becoming more equal in recent years as hundreds of millions of Chinese and Indians have been moving from lower incomes toward the center of the global income distribution. The distribution of average incomes across countries may at the same time have been becoming more unequal, as many small countries, especially in Africa, have been falling behind.

These facts are frequently discussed as if they have major implications for whether globalization is good or bad. That is a trap, because the syllogism: He does not fall into that trap: He rightly emphasizes first the need to open up to trade. This is a wellknown problem, and the Doha Round of trade negotiations was supposed to make progress in reducing these barriers. But there has so far been dismayingly little progress in that regard.

It seems that no amount of calculating the potential gains from freeing up agricultural trade, and no amount of finger-pointing, has made any difference to the willingness of the EU, Japan, and the US substantially to liberalize agricultural trade. At the same time, de la Dehesa points out that the calculations showing major gains from trade liberalization suggest that about half the benefit will come from the liberalization of South—South trade, from developing countries opening up to each other.


Here is an area where developing countries could move ahead, on their own. The problem is that the political economy of trade liberalization is typically perverse: Nonetheless, here is an area where globalization can be made to work better. In chapter 8, he emphasizes the potential benefits from welcoming foreign direct investment, particularly as a way of gaining access to foreign technology, and asks what can be done first to encourage FDI, and then to harvest its benefits.

In chapter 9 he turns to the growing integration of trade and finance. This is an area that I also believe to be very important, more important than I did just a few years ago. I have been particularly struck in the case of the Israeli economy by the beneficial impact the full opening of the capital account in seems viii Foreword to have had on FDI, on trade, and on the attitudes of Israeli businesspeople toward the possibilities offered by the global economy.

After taking up the economics of aid, and the case for increasing it, he turns in his final chapter to the growing importance of migration. As is by now well known, remittances already constitute the largest single source of foreign exchange earnings clmprender several economies. Labor flows are becoming very large, and both their economic gllbalizacion their social impact are rising. Here is another key aspect of globalization. Typically it has many pluses, and key minuses.

To find out what he has to say, read the book! I guiolermo to be as objective and instructive as possible because I felt that there was a great deal of confusion surrounding the concept and what it embodied. At best, globalization had become a handy excuse, but it was generally the scapegoat that took the blame whenever things went wrong or whenever there seemed to be no explanation for why something was not going right.

Unfortunately, this wide perception, mainly among young people in developed countries, has not changed much since then. The reason why I have decided to embark on this new book has been to deal with two of the fundamental and traditional arguments raised against globalization: In my previous book I did not shy away from pointing out the drawbacks of globalization.

Globalization, like any change process, although positive overall, globaliaacion certain unavoidable, but mainly temporary, negative economic, social, political, and cultural consequences that must be urgently addressed. World-wide terrorism, the global arms race, global drug traffic and the 1. The same can be said about the improvement of the environment through the pressure of NGOs such as Greenpeace.

I hope that with my first ddehesa I was able to help people understand this far-reaching and promising process that market economies have been undergoing for several decades now. In this second book I try to explain with greater precision and detail the causes of inequality, poverty and marginalization, which are unfortunately still prevalent throughout the world, and how, contrary to popular belief, the acceleration of globalization in the last decades tends to reduce the levels of inequality and poverty world-wide but unfortunately not evenly; there is still much to do to reduce this asymmetric distribution of its clear benefits.

In the first 18 centuries of the Christian era, that progress was 2 Introduction minimal or at least lower than demographic growth which was also very low. The population grew very slowly and nearly everyone in the world, except for a privileged few mainly nobilitylived in what today would be considered absolute poverty. Following the diffusion of the first Industrial Revolution and the development of modern capitalism arounda period of growing prosperity began and continues gathering strength todaymaking it possible — thanks to the development of new scientific discoveries and the concomitant waves of technological progress — for the twentieth century to become, by far, the most prosperous century in the past two millennia.

Moreover, this spectacular growth in real per capita GDP was achieved despite the fact that, in just one century, the population grew by 4. This means that the population growth in the twentieth century alone was also 3. Further proof of this remarkable growth in prosperity is that between and life expectancy increased by more than one and a half times, from 26 years to 66 years, while globalizacuon mortality fell fourfold, from per thousand to 54 per thousand.

Thus, based on the historical experience of the past two centuries, it seems clear that only com;render scientific and technological progress, coupled with a market economy, can the world prosper as it had in the past century.

Technological progress has facilitated globalization. Indeed, it was a necessary condition, as it made it possible to increasingly lower the costs of production, storage, marketing, distribution, and transport of both goods and ideas, enhancing the flows of trade, capital, technology, and labor, which are the true essence of globalization. However, technological progress was not the only requisite for globalization.

: Guillermo De LA Dehesa: Books

Entrepreneurs who took the risk of exploiting the new opportunities offered by technical progress were a necessary condition as well.

But it was also necessary for governments around the world, convinced of its advantages, to allow it or encourage it by gradually liberalizing the flows of goods and services, capital, labor, and technology between countries. In fact, following the preceding upsurge in globalization, between andthere was unfortunately another period of retrocession, which started in and brought about, not only a staunch wave of protectionism, but also lower economic growth, two world wars and a great depression.


As a result, the globalization process only began to recover slowly fromfinally accelerating from However, in addition to being the key factor in improving social well-being, technological progress also tends to cause greater inequality, at least in the short and medium term and, in certain cases, it even stretches out to the long term. Scientific discoveries always come from a certain country or group of countries, generally those with the highest levels of human capital and market size, giving such country or countries a huge productive advantage over the others, as was the case with the United Kingdom in the first Industrial Revolution or the United States in recent decades.

Depending on the degree of globalization at any given time, such discoveries take more or less time to be disseminated to other countries through commerce, foreign investment and emigration; accordingly, the absence of globalization can cause the inequality between countries to persist for much longer periods of time. New technologies are adopted first by those countries that have the human and physical capital needed to copy or assimilate them. They reach the rest of the countries more slowly, in some cases taking many decades to be adopted, either because these countries do not have what it takes to assimilate them or because they are shut off from the rest of 4 Introduction the world.

As a result, there are almost always certain countries that lag in such advances by more than a century. Just as technological progress can cause inequality among countries, it can also produce it among the citizens of the same country, including that in which the discovery was made and first developed. This is due to the fact that in each country there are people who, because of their level of income, education, or training, begin to use these new technological discoveries almost immediately, thereby significantly raising their productivity levels.

As a result, their salary and income levels are higher than those of their compatriots, who have a lower level of knowledge and take longer to start using them. Thus, the level of income inequality between them grows. There are other factors that make technological progress generate inequality. First, new technological discoveries and improvements in human capital tend to show growing returns to scale wherever they are applied.

What Do We Know About Globalization?

In other words, they tend to produce a growing volume of output for each rehesa unit added of factor input, be it physical or human capital. As a result, the productivity and cost advantages achieved by the countries or companies that initiate and develop them tend to grow faster.

In any event, it should be made very clear that, although technological progress produces temporary inequality, its diffusion is accelerating with globalization since the s and, at the same time, is bringing 5 What Do We Know About Globalization?

In addition to technological progress, there are other factors that produce inequality between countries. On the one hand, there are structural factors, such as climate and geographical location. Countries located in the tropics, in arid regions, in high mountains or in areas without access to the sea or navigable rivers tend to grow at a substantially slower pace than those located in areas with temperate climates, mild geographical features and natural means of communication and transport.

On the other hand, there are exogenous factors, such as demographic growth. The developing countries with the greatest population growth and overpopulation levels need to grow and increase their production of goods and services much more rapidly to be able to raise their per capita income. However, they generally fail globalizacioh achieve this, and their per capita income tends to drop while their natural resources are overexploited, which in turn leads to very serious nutritional and ecological problems.

Lastly, there are political and institutional endogenous factors which pose some of the most important — if the not guollermo greatest — obstacles to growth of political and institutional character.

The absence of a true democracy and a strong civil society, the lack of clearly defined social and economic rules accepted by the population, starting from property guillfrmo and adequate judicial and public security systems to defend them, the high level of corruption, the poor quality of public goods and services and the misappropriation of public resources that this entails, as funds are squandered or siphoned off instead of being invested in education, health and such basic services comprendsr electricity or drinking water and the vehesa or weakness of credit and savings institutions are all factors that make it impossible for many countries comprenderr emerge from marginalization and poverty.

Nevertheless, contrary to popular opinion, it is precisely through globalization that the inequalities stemming globalizaciin all the abovementioned factors would tend slowly to be reduced. Proof of this is the fact that the acceleration of globalization since the s has made it 6 Introduction possible to narrow slightly the inequality and firmly the poverty levels compdender the world, although it must also be said that unfortunately this reduction has not taken place evenly among countries or individuals.