Assessing the effects of openness on poverty - are the critics right?

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This study contributes to the debate on globalization's influence on poverty, beginning with a nuanced discussion of the anti-globalization movement, which is neither uniform nor strictly opposed to globalization. It then conducts a cross-country analysis of 80 developing nations, revealing that openness positively affects per capita incomes. Additionally, higher institutional quality correlates with better human development, suggesting that improved institutions can aid in poverty alleviation. The findings also indicate that increased openness enhances institutional quality, further aiding poverty reduction. The analysis focuses on India's development, given its significant poverty levels. It examines the rationale behind the country's import-substitution policy, which aimed to achieve political independence and combat mass poverty post-colonization. A comparison of India's trade regimes before and after liberalization shows that economic reforms have lifted more people out of poverty than in the first four decades of independence. However, the results indicate that additional measures are necessary for the poor to fully engage in the growth process. Overall, the study suggests that poverty and income inequality stem not from globalization but from insufficient globalization, with social exclusion being a primary barrier to progress for the poor.