Stemming the backlash against globalisation

Our findings suggest that public opinion in the developing world about the market and global integration is surprisingly mixed. While the rhetoric of the protestors implies that globalization has been bad for the poor, the evidence suggests otherwise. Rather ironically, it is those in the middle strata, who in many countries had more secure positions prior to global integration, that are now very vulnerable and also the most negative in their assessments of their progress with the turn to the market.

The existence of such negative perceptions does not mean that a backlash against globalization is inevitable. At this juncture, the broader public in most emerging market countries seems to be aware that the alternative—self-imposed isolation—has high costs. Yet developing policies to address the causes of these frustrations is essential—precisely so that they do not become the source of a backlash.

Reducing insecurity and addressing large differences in the distribution of the benefits of reform—thereby creating a more broadly held perception and a reality of equality of opportunity—could go a long way towards building a broader and more sustainable base of support for continuing market policies. At the same time, if poor people in poor countries perceive that the playing field is level and that opportunities exist, they will be much more likely to invest in their children's education and therefore their ability to take up those opportunities in the future.

References: Attacking Poverty: World Development Report 2000 (World Bank, 2000) and Dani Rodrik, "Trading in Illusions," Foreign Policy, March-April 2001. Facing Up to Inequality in Latin America (Inter-American Development Bank, 1998); Nancy Birdsall, Carol Graham, and Richard Sabot, Beyond Tradeoffs: Market Reforms and Equitable Growth in Latin America (Brookings/Inter-American Development Bank, 1998); and Nancy Birdsall and Juan Luis Londono, "Asset Inequality Matters," American Economic Review Papers and Proceedings, May 1997. For recent work on happiness see, among others, David Blanchflower and Andrew Oswald ("Well-Being Over Time in Britain and the U.S.A.," working paper, Warwick University, November 1999), and Carol Graham and Stefano Pettinato ("Happiness, Markets, and Democracy: Latin America in Comparative Perspective," Journal of Happiness Studies, forthcoming, Fall 2001).