World inequality, globalisation, technology and labour market institutions

Abstract

Purpose - The paper aims to assess to what extent the general trends with regard to world inequality can be explained by rising international economic integration, technological change and (labour market) institutions. Design/methodology/approach - Based on the existing literature, the stylized facts on inequality between and within nations, globalisation and technological change are reviewed, after which the empirical evidence of the impact of international trade and poverty in developing countries is discussed. Findings - The paper argues that despite substantial theoretical and empirical contributions, so far no straightforward conclusions are warranted. However, historical evidence suggests that, from a policy perspective, the rise in inequality - witnessed in a large number of developing as well as developed countries - ought to be acknowledged and tackled to avoid a possible backlash against globalisation. The inconclusiveness that empirical work on inequality and its determinants offers, might be explained by substantial differences across countries in their institutional framework. Originality/value - The importance of interactions between institutions, technology and globalisation and their impact on world inequality is still not very well understood. The paper is an appeal for investigating more these interactions.