EVALUATING THE EFFECTS OF GLOBALIZATION ON POVERTY MEASURES

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MOSAVI S.N.; BAKHSHOUDEH MOHAMMAD; MOHAMMADI H.; YAZDANI S.; TAHERI F.

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Journal: Social Welfare Year:2007 | Volume:6 | Issue:24 Page(s): 259-279

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Title

EVALUATING THE EFFECTS OF GLOBALIZATION ON POVERTY MEASURES

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Keywords

GLOBALIZATIONQ2

POVERTYQ3

WHEATQ3

Abstract

Objective: GLOBALIZATION of economy is characterized by increasing movement of labor and capital, technology, increased international trade, integration of markets and communication. Liberalization and GLOBALIZATION lead to increased foreign investment and increased amount and type of goods and services traded by nations. One of the challenges in GLOBALIZATION literature is its impacts on living condition of income groups and more specifically on POVERTY and income distribution of different income groups. Some believe in a positive relation between POVERTY and trade liberalization. However, others have got a negative relation between them. Method: In this study the effect of GLOBALIZATION on POVERTY was investigated using both of micro and macro frameworks. In macroeconomic lens, GLOBALIZATION effect on POVERTY Headcount and POVERTY Gap criteria was studied using a variable as foreign trade – gross domestic production ratio. In microeconomic lens the results obtained for WHEAT market was used. The WHEAT market contains equations of import, domestic production and domestic demand simultaneously. The results of the WHEAT market obtained from Mousavi’s(1385) study, conducted to predict the impact of GLOBALIZATION on WHEAT market. In the microeconomic approach in addition to the WHEAT market results, household expenditure, collected by Iranian Statistical Center, was also used. In the microeconomic approach the impact of different levels of increase in Integration of International Trade (LIT) criterion (as a mean indicating level of GLOBALIZATION) on WHEAT (Bread) consumption was investigated. Two approaches were considered in order to investigate the impact of GLOBALIZATION on consumption. In approach one, the total changes in WHEAT consumption was regarded as summation of changes in domestic supply and import. While in second one the changes in WHEAT (Bread) domestic demand was regarded as consumption changes. Different levels of increase in Integration of International Trade criterion were also 10, 20, 30, 50 and 100 percent. In addition to the increased levels of the Integration of International Trade criterion, the impacts of increase in price of bread on selected households expenditure and POVERTY indices including Headcount, POVERTY Gap and Severity of POVERTY was studied.Findings & Results: Based on findings, GLOBALIZATION has no considerable impact on the percent of urban poor, while 1% rise in GLOBALIZATION criterion can reduce urban POVERTY gap by 2.95%. Inflation index also reveled that increase in prices results in decreased POVERTY gap in urban Iran. In the case of rural households the findings showed that GLOBALIZATION results in a reduced POVERTY head count, but it raises POVERTY gap. In other words participation of Iran in global market will result in more undesirable condition of rural lower income poor, needing for more protection of the mentioned groups. The impact of agriculture sector growth on rural POVERTY is also interesting in that more growth of it lead to more POVERTY. Based on the results agriculture sector growth is expected to increase both of the poor number and POVERTY gap. The results of Headcount criterion revealed that 36.74% of urban and 25.43% of rural households are considered as poor. The results of micro lens evaluation that was also performed using coefficients obtained from Mousavi’s (1385) study and household expenditure showed that GLOBALIZATION of WHEAT market individually, and increased bread price would not result in a considerable change in POVERTY Headcount, Gap, and Severity.

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APA: Copy

MOSAVI, S.N., BAKHSHOUDEH, MOHAMMAD, MOHAMMADI, H., YAZDANI, S., & TAHERI, F.. (2007). EVALUATING THE EFFECTS OF GLOBALIZATION ON POVERTY MEASURES. SOCIAL WELFARE, 6(24), 259-279. SID. https://sid.ir/paper/56949/en

Vancouver: Copy

MOSAVI S.N., BAKHSHOUDEH MOHAMMAD, MOHAMMADI H., YAZDANI S., TAHERI F.. EVALUATING THE EFFECTS OF GLOBALIZATION ON POVERTY MEASURES. SOCIAL WELFARE[Internet]. 2007;6(24):259-279. Available from: https://sid.ir/paper/56949/en

IEEE: Copy

S.N. MOSAVI, MOHAMMAD BAKHSHOUDEH, H. MOHAMMADI, S. YAZDANI, and F. TAHERI, “EVALUATING THE EFFECTS OF GLOBALIZATION ON POVERTY MEASURES,” SOCIAL WELFARE, vol. 6, no. 24, pp. 259–279, 2007, [Online]. Available: https://sid.ir/paper/56949/en

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