Abstract / Summary:
Literature on globalization and its impact is vast and growing and has highlighted both the positive effects and possible risks. While the pro-globalization camp emphasizes the economic gains from the deployment of factors on external markets, anti-globalization advocates consider those economic elements that have either fallen out or suffered from the process of globalization. However, most studies on globalization use outcome-based data and measure ex-post situations i.e. income per capita, employment etc. There are few studies that analyze whether increased openness has resulted in people having easier access to various socio-economic opportunities that could in turn enhance their human development potential. According to the capability approach, human development is defined as the enhancement of the choices that people have to lead the life they have reason to value and these choices cover a wide range of dimensions including economic, social, political, cultural, environmental and other dimensions. Though, according to economic theory, total welfare should increase when countries open out, the gains and losses generated in the process for different countries and groups have not yet been fully understood. The picture is even less clear when one looks at the impact on the quality of life which includes both economic and non-economic aspects. We would like to examine the missing area of investigation in the link between globalization and human development by looking at whether globalized economies are able to offer increased opportunities to their populations in different socio-economic domains and the quality of such opportunities. As both ‘globalization’ and ‘opportunities’ are difficult concepts to define in a precise manner, we will first identify the various components of these two concepts and build appropriate composite measures based on multiple indicators. Then we will go on to model the relationship between the two taking care to control for all other factors that could affect the opportunity set such as domestic growth (sector-wise if possible), factor costs, fiscal and monetary policies, institutional set-up, culture, religion, history and other home-grown stimulants for development. Our empirical analysis will use a panel data set consisting of as many countries as possible followed over time and will be innovative in examining the ex-anteconditions for development rather than the ex-post outcome thus providing lessons to less globalized economies on how they can catch up in reaping the benefits of openness by changing their home conditions on accessibility.
