FW: The scorecard on globalization 1980 - 2000

Craven, Jim jcraven at clark.edu
Mon Sep 10 17:28:11 MDT 2001



The Scorecard on Globalization 1980-2000: Twenty Years
of Diminished Progress

By Mark Weisbrot, Dean Baker, Egor Kraev and Judy Chen

[Mark Weisbrot and Dean Baker are Co-Directors of the
Center for Economic and Policy Research (CEPR). Egor
Kraev and Judy Chen are Research Associates. The
authors would like to thank Robert Naiman, Gila Neta,
Lisa Smith and Andrea Blatchford for their comments,
research and editorial assistance.]

Published in collaboration with CEPR - Center for
Economic and Policy Research cepr at cepr.net -
www.cepr.net Phone: (202) 293-5380, Fax: (202) 822-1119

Executive Summary

It is commonly accepted that the increased opening to
international trade and financial flows that has
occurred in the vast majority of countries in the world
has been an overall success. Even critics of
globalization have generally accepted that the reforms
of the last two decades, in low to middle-income
countries, have boosted economic growth rates. They
have argued that this growth has left many people
behind, and has often been at the expense of the
natural environment.

This paper looks at the major economic and social
indicators for all countries for which data are
available, and compares the last 20 years of
globalization (1980-2000) with the previous 20 years
(1960-1980). These indicators include: the growth of
income per person, life expectancy, mortality among
infants, children, and adults, literacy, and education.

For economic growth and almost all of the other
indicators, the last 20 years have shown a very clear
decline in progress as compared with the previous two
decades. For each indicator, countries were divided
into five roughly equal groups, according to what level
the countries had achieved by the start of the period
(1960 or 1980). Among the findings:

· Growth: The fall in economic growth rates was most
pronounced and across the board for all groups or
countries. The poorest group went from a per capita GDP
growth rate of 1.9 percent annually in 1960-80, to a
decline of 0.5 percent per year (1980-2000). For the
middle group (which includes mostly poor countries),
there was a sharp decline from an annual per capita
growth rate of 3.6 percent to just less than 1 percent.
Over a 20-year period, this represents the difference
between doubling income per person, versus increasing
it by just 21 percent. The other groups also showed
substantial declines in growth rates.

· Life Expectancy: Progress in life expectancy was also
reduced for 4 out of the 5 groups of countries, with
the exception of the highest group (life expectancy
69-76 years). The sharpest slowdown was in the second
to worst group (life expectancy between 44-53 years).
Reduced progress in life expectancy and other health
outcomes cannot be explained by the AIDS pandemic.

· Infant and Child Mortality: Progress in reducing
infant mortality was also considerably slower during
the period of globalization (1980-1998) than over the
previous two decades. The biggest declines in progress
were for the middle to worst performing groups.
Progress in reducing child mortality (under 5) was also
slower for the middle to worst performing groups of
countries.

· Education and literacy: Progress in education also
slowed during the period of globalization. The rate of
growth of primary, secondary, and tertiary (post-
secondary) school enrollment was slower for most groups
of countries. There are some exceptions, but these tend
to be concentrated among the better performing groups
of countries. By almost every measure of education,
including literacy rates, the middle and poorer
performing groups saw less rapid progress in the period
of globalization than in the prior two decades. The
rate of growth of public spending on education, as a
share of GDP, also slowed across all groups of
countries.

In this study, countries are grouped by their level of
the indicator (GDP, life expectancy, etc.) at the start
of each period. We are therefore comparing the
countries that start each period at similar levels,
rather than comparing the same country across the two
20-year periods. This eliminates the problem that it
might be more difficult, for example, for a country to
make the same amount of progress going forward from an
average life expectancy of 65 years, as it made from a
life expectancy of 50 years. (See the Introduction for
a more detailed explanation.)

The last two decades have seen a number of important
changes in economic policy adopted throughout much of
the world, and especially in the low to middle-income
countries. Many of these measures fall under the common
definition of globalization: i.e., the removal of
tariff and non-tariff barriers to trade, and capital
account liberalization (the removal of restrictions on
international investment flows).

Other policies directly related to globalization have
also been implemented over the last two decades. For
example, the International Monetary Fund and World Bank
have increasingly, during this period, required a
number of measures to be adopted by borrowing countries
as a condition of their access to foreign credit. These
have included contractionary monetary policies (higher
interest rates and tighter credit), public spending
cuts, privatization of public enterprises, increasing
foreign reserve requirements, and a long list of
"micro-interventions" ranging from user fees for
primary education and health care to removing various
government subsidies. Many poor as well as medium-
income countries have also faced historically
unprecedented levels of foreign debt and debt service.

The evidence presented in this study does not prove
that the broad decline in progress in the areas of
economic growth, health outcomes, or other social
indicators are a result of any one or more of these
policy changes. But it does present a very strong prima
facie case that some structural and policy changes
implemented during the last two decades are at least
partly responsible for these declines. And there is
certainly no evidence in these data that the policies
associated with globalization have improved outcomes
for most low to middle-income countries. To argue that
this is the case, it would be necessary to show that
outcomes would have been even worse in the era of
globalization, if countries had not adopted these
policies.

If the basic facts presented in this paper were well
known, discussions of globalization and international
economic policy would look very different than the ones
we see today. At the very least, the burden of proof
would be squarely placed on those who claim success --
by any available measure of human well-being -- for the
last two decades of the experiment in globalization.

[the full report can be found at www.oneworld.org -
modertor]



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