Globalisation and the Poor

Globalisation and the Poor

By Johan Norberg

Summary

Globalisation and the Poor is a Liberty Institute Occasional Paper by the Swedish classical-liberal writer Johan Norberg (November 2003), arguing — against the anti-globalisation movement that had its “coming-out party” in Seattle in 1999 — that far from making the poor poorer, integration into the world economy has been the most effective engine of poverty reduction in history. Norberg opens by insisting on an absolute rather than relative measure of poverty: relative measures, he contends, track inequality rather than deprivation, and can perversely report rising “poverty” in a country like China even as everyone grows richer. Using the World Bank’s one-dollar-a-day line, he narrates a long decline in absolute poverty — from roughly 85 per cent of the world’s people in 1820 to about 20 per cent today — and stresses that in the last two decades, for the first time in history, the absolute number of poor has fallen even as world population grew.

The paper’s core claim is that this reduction is a natural consequence of economic growth, which no country has ever achieved without benefiting its poor: citing the World Bank economists David Dollar and Aart Kraay’s study of 80 countries over 40 years, Norberg argues that on average the incomes of the poor rise in step with overall growth, undercutting the condescending “trickle-down” image. He illustrates the link between openness and prosperity through three “economic miracles” — 19th-century Sweden (saved, he says, by classical-liberal liberalisation and free trade rather than redistribution), 20th-century Taiwan, and contemporary Vietnam, whose export-led opening and foreign investment (including much-maligned firms like Nike) he presents as stepping stones out of subsistence farming and child labour.

Norberg then turns to why some regions, especially Africa, remain trapped, rejecting both the “globalisation is to blame” thesis (Africa being the least globalised region) and cultural-determinist explanations. Drawing on the Peruvian economist Hernando de Soto’s The Mystery of Capital, he locates the problem in domestic obstacles — insecure property rights, licensing burdens and corruption that push the poor into the informal economy — and in external obstacles, above all rich-world protectionism in textiles and agriculture, with the European Union’s Common Agricultural Policy as his prime target. His conclusion is that the poor need more liberalisation, not less, and that broad surveys such as the Pew Global Attitudes project show enthusiasm for globalisation is in fact highest in the developing world.

Key points

• An Occasional Paper by Swedish classical-liberal author Johan Norberg (November 2003), published in India by the Liberty Institute, New Delhi.

• Argues absolute, not relative, poverty is the right yardstick: relative measures track inequality and can show “rising poverty” even as everyone grows richer (his China example).

• Charts a long fall in absolute poverty (≈85% of humanity in 1820 to ≈20% today), noting that in the last two decades the absolute number of poor fell for the first time in history despite population growth.

• Central thesis: sustained economic growth is the best cure for poverty; citing Dollar and Kraay, the poor’s incomes rise roughly in step with overall growth.

• Uses three “economic miracles” — 19th-century Sweden, 20th-century Taiwan, and contemporary Vietnam — to tie openness and free trade to escape from poverty and child labour.

• Rejects both “globalisation is to blame” (Africa being the least globalised region) and cultural-determinist explanations for persistent African poverty.

• Following Hernando de Soto, blames domestic obstacles (insecure property rights, licensing, corruption) and external obstacles (rich-world protectionism in textiles and farming, esp. the EU’s Common Agricultural Policy).

• Concludes the poor need more liberalisation, not less, citing the Pew Global Attitudes survey showing support for globalisation is highest in poor countries.

Ingested 2026-07-21 from the CCS source archive. AI-drafted summary awaiting editorial review.