Why Economic Growth Trends Differ So Much across Developing Countries in the Era of Globalisation (The Iqbal Memorial Lecture)

The claim of globalisation critics that the income gap with industrial countries is bound to widen for essentially all developing countries as a consequence of economic globalisation is in conflict with empirical evidence. Economic performance differs tremendously across developing countries. We discuss several factors such as capital accumulation, openness to trade, and foreign indebtedness which may explain the varying experience with globalisation in regard to per capita income growth and income distribution. Economic restructuring is shown to represent an important—though frequently neglected—link between globalisation and country-specific performance. We conclude that national policy-makers continue to have effective leverage to promote economic catching-up and poverty alleviation in the countries they govern.