Does globalization spur human development at income-group and regional levels? evidence from cross-country data

Abstract

The objective of this study was to examine the impact of globalization on human development in 133 countries during 1990–2017 by considering income group countries and regional economic blocks. The choice of income group countries was due to the effect of globalization on human development is likely to differ depending on level of economic development of these countries. Similarly, the regional economic blocks were taken because the member countries of these blocks cooperate and facilitate globalization through free trade, international business and financial integration, which in turn facilitates more human development than countries that are not in these blocks. The panel-corrected standard error (PCSE) method and system-GMM method were used because they are robust for heteroskedasticity and autocorrelation, and endogeneity problems, respectively. The results showed that overall globalization and its three dimensions improve human development. High-income, upper-middle-income, and lower-middle-income countries enjoyed more human development than low-income countries. Similarly, regional economic blocks experienced higher human development than non-regional economic blocks. These results suggest that policies and programmes from international organizations are needed to empower low-income countries so they can reap the benefits of globalization and thereby improve their human development.