Globalization refers to the growth on a worldwide scale.
That is, in every economic section growth takes place. MAJOR
economic constraints, every country faces, are highly growing rate of poverty,
unequal income distribution, trade liberalization and demographic transition
with increasing rate.
poverty means the lack of necessities. Trade liberalization
is the removal of all trade barriers both tariff and non-tariff. Income inequality means some people get large portion
while others get a very small portion of total income.
Many economists believe in globalization as it has a
commanding role during last thirty-five years in economic phenomenon by enlarging
trade volume, investment and financial flow dramatically. But many economists recalcitrated
the globalization as it became the cause of increasing inequality during this
period. A question arises here that is there any relationship between
globalization and inequality? If yes then of what type? Is that relationship
justifiable? It occurs either between or within the nations?
To identify the relationship between
globalization and inequality
To examine the income distribution among
To study the impact of globalization on LDCs
Bhagwati (1999) observed that developed countries opposed
greater integration because of rising inequality and connoted political effects
in their economies.
Inequality has been increased between and within nations in
an impressive manner joust because of globalization. It has put the poor of
LDCs in the position of secondary importance while deserted the poorest (Mazur
2000). Meanwhile, moderate politician Clinton (2000) argued that to get the benefits
of globalization, education must be invested by the poor.
Winter (2000) pointed out that open economies have more
reduce poverty than closed economies as trade liberalization is beneficial
for different classes of society like consumers and producers in the way to
increase the earning of workers but poor class cannot get benefits that
created by trade openness as they lack skills and capital.
Low (2001) suggested the globalization to come down the
views bring up globalization as the process of increasing communication
between people of different nations as well as less valuation of political
social and geographical constraints.
Deolalikar (2002) observed that economic growth is directly
to poverty reduction and inversely proportional to income inequality. He
intimated to Thailand to make an immense progress, the policy to
increase the education opportunities for poor students should adopted. In
this way, they will be able to overcome the income gap, what is more,
investment level should heighten in backward areas to overtake the
income inequality gap.
Globalization has made worsen the inequality especially in
the countries of OECD (Dreher and Gaston 2008)
Alvan (2009) who views that income inequality is affected by
variables like globalization, inflation, economic growth and human
development. Human development and income inequality have negative
relationship with each other. She intimated to give priority to human
development on income distribution in development program.
Hussain (2009) found the positive relationship between
trade liberalization. He suggested that if Pakistan wants to lessen the
income inequity, it ought to welcome the foreign investors.
Meisami (2011) told that Islam lays great stress on poverty
income distribution equally. Islam stresses on the importance of human
capital components like education and health.