Yet, although these models have been helpful for establishing a framework for understanding the basic theoretical concepts linking globalization and poverty, empirical evidence supporting the popular notion that expanding trade universally reduces poverty in LDCs is sparse. According to HOS, globalization should produce benefits for the poor in countries that have a comparative advantage in labor-or most LDCs. We take this one step further and challenge scholars to better understand variation in the willingness and ability of governments to commit to pro-poor policies alongside globalization.Ī great deal of the research on globalization and poverty in less developed countries (LDCs) is rooted-either implicitly or explicitly-in Heckscher-Ohlin, Stolper-Samuelson (HOS) trade theory. Our aim in this review is to discuss the state of the debate amongst scholars and to identify the conditions under which globalization improves the livelihoods of the absolute poor, that is, those living at or below their national poverty line. A few scholars in international political economy (IPE) have entered the debate, but they tend to analyze the impacts of market exposure on the better off, not the poorest. Economists have dominated both the theoretical and empirical analysis of this relationship but remain far from reaching a conclusion. What is the relationship between globalization and poverty? Developing countries have long turned to international trade and finance as a solution for development, yet 35% of the world's population still lives below the international poverty line. Ultimately, scholars from both disciplines must begin to evaluate government commitment to pro-poor redistribution (rather than the extent to which policy is beholden to vested elite interest groups) in order to assess the relationship between trade and poverty. Further, we provide some preliminary quantitative and qualitative tests of our argument. We provide theoretical guidance on how scholars might begin to operationalize ideology on a global basis and why this is necessary to evaluate the globalization–poverty linkage. Specifically, we contend that scholars need to identify the ideological positions of developing country governments, an identification that moves beyond the conventional left–right divide that prevails in developed nations. We review this literature and argue that to understand the relationship between globalization and poverty, we must ultimately understand the political motivations underlying the policies directed at the poorest. Economists and political scientists explore this relationship but are far from reaching a conclusion. What is the relationship between globalization and poverty? Developing economies have long turned to international trade and finance as a solution for development, yet 35% of the world's population still lives below the international poverty line.
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