Governance over Economics: Making Globalisation Good for the Poor

Abstract

The paper employs different definitions of inequality/ equality and investigates how globalisation is associated with these welfare measures. The nations’ proximity to post modernism development culture through international cooperation may enable countries to strengthen their social, economic, legal and political institutions. We find that adopting well developed institutional governance practices as matter of greater integration with modern 21st century governance culture creates thriving middle classes in developing countries enabling a downward pressure on inequality of incomes and wages. In contrast, integration of goods and services with world markets puts upward pressure on the wages of skilled in contrast with the unskilled causing industrial wage inequalities in both developed and developing countries. The paper recommends in line with the recent literature on pre mature de industrialisation phenomenon that countries may protect their local industries to provide jobs to locals and thus enable the gains of trade to be more equally distributed among the populations. This can be done by choosing the second best option towards global integration and that is to promote regionalism within geographical clusters.