Globalization and Inequality: Historical Trends

50 Pages Posted: 31 Jul 2001

See all articles by Kevin H. O'Rourke

Kevin H. O'Rourke

University of Dublin, Trinity College; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: July 2001

Abstract

This Paper surveys trends in both international economic integration and inequality over the past 150 years, as well as the links between them. In doing so, it distinguishes between (a) the different dimensions of globalization; and (b) between-country and within-country inequality. Theory suggests that globalization will have very different implications for within-country inequality, depending on the dimension of globalization involved (e.g. trade versus factor flows), on the country concerned, and on the distribution of endowments; the historical record provides ample evidence of this ambiguous relationship. Late 19th century globalization had large effects on within-country income distribution, but the effect on inequality differed greatly across countries: both trade and migration (but not capital flows) made the rich New World more unequal, and the (less rich) Old World more equal. The evidence on the links between within-country inequality and globalization in the late 20th century is mixed. The balance of evidence suggests that globalization has been a force for between-country convergence in both the late 19th and late 20th centuries; long run patterns of divergence are due to other factors (e.g. the unequal spread of the Industrial Revolution).

Keywords: Inequality, history

JEL Classification: F00, N70

Suggested Citation

O'Rourke, Kevin H., Globalization and Inequality: Historical Trends (July 2001). Available at SSRN: https://ssrn.com/abstract=277292

Kevin H. O'Rourke (Contact Author)

University of Dublin, Trinity College ( email )

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