Globalization and North—South Inequality,1870—2000

Abstract

Analysts continue to debate the nature of the relationship between globalization and global inequality between states, with some arguing that globalization increases inequality, others saying that the relationship is negative, and still others suggesting that the relationship varies over time. There is actually more overlap in these positions than is apparent — an element underlined by our own argument that globalization’s effects can be both positive and negative simultaneously. We argue that globalization contributes to intra-Northern convergence while it reinforces North—South divergence. An 1870—2000 time series analysis of the relationships among trade and financial globalization and North—South inequality supports this prediction, while also finding that the effects of globalization are time dependent.