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The Evidence on Globalisation

World Economy

Published online on

Abstract

Globalisation is blamed for many socioeconomic shortcomings. I discuss the consequences of globalisation by surveying the empirical globalisation literature. My focus is on the KOF indices of globalisation (Dreher 2006a, Applied Economics 38, 1, 1091; Dreher et al. 2008, Measuring Globalization – Gauging its Consequences. Berlin: Springer) that have been used in more than 100 studies. Early studies using the KOF index reported correlations between globalisation and several outcome variables. Studies published more recently identify causal effects. The evidence shows that globalisation has spurred economic growth, promoted gender equality and improved human rights. Moreover, globalisation did not erode welfare state activities, did not have any significant effect on labour market interaction and hardly influenced market deregulation. It increased, however, within‐country income inequality. The consequences of globalisation thus turn out to be overall much more favourable than often conjectured in the public discourse.