Approaches to Globalization and Inequality Within the International System

There is increasing evidence that inequality within countries has been growing for the last few decades. Increasing income disparities, in addition to contributing to social and political tensions, mean that higher economic growth rates are necessary to reduce poverty. There is also growing evidence that lower inequality leads to better growth performance. While there is considerable international debate about the causes of increasing domestic inequality, many agencies of the United Nations have recently pointed to globalization and liberalization policies as significant contributors.

There is sufficient international consensus on these matters to support policies that would reduce inequality through building the assets of the poor (education, access to land and credit), through reversing discrimination against the poor and biases against agriculture and rural development, and through a more cautious approach to financial and capital-account liberalization. Other policies would also help to reduce inequality, including income and asset redistribution toward the poor, as well as more equitable labour market policies, and policies to foster skills and technological development. However, such prescriptions as yet carry less consensus.