THE GLOBALIZATION RORSCHACH TEST: International Economic Integration, Inequality, and the Role of Government

In this review, we address three principal questions that have dominated the debate over the distributive effects of globalization. First, how has globalization affected inequality among countries? Second, how has globalization affected inequality within countries? Third, how has globalization affected the ability of national governments to redistribute wealth and risk within countries? We conclude that despite the proliferation of research on the consequences of globalization, there is no solid consensus in the relevant literature on any of these questions, largely because scholars disagree about how to measure globalization and about how to draw causal inferences about its effects. We also suggest possible foci for future research.

We've seen the result [of globalization]. The spread of sweatshops. The resurgence of child labor, prison and forced labor. Three hundred million more in extreme poverty than 10 years ago. Countries that have lost ground. A boom in busts in which a generation of progress is erased in a month of speculation. Workers everywhere trapped in a competitive race to the bottom.

AFL-CIO President John J. Sweeney at the

International Confederation of Free Trade Unions Convention,

April 4, 2000 (see http://www.aflcio.org/mediacenter/

prsptm/sp04042000.cfm for text of this speech)

[T]hose who protest free trade are no friends of the poor. Those who protest free trade seek to deny them their best hope for escaping poverty.

President George W. Bush (Los Angeles Times, 2001)