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Is the Developing World Catching up? Global Convergence and National Rising DispersionThe present study uses the GIDD, a
 CGE-microsimulation model for Global Income Distribution
 Dynamics, to understand the ex-ante dynamics of global
 income distribution. Three main robust results emerge.
 First, under a set of realistic assumptions, there will be a
 reduction in global income inequality by 2030. This
 potential reduction can be fully accounted for by the
 projected convergence in average incomes across countries,
 with poor and populous countries growing faster than the
 rest of the world. Second, this convergence process will be
 accompanied by a widening of income distribution in
 two-thirds of the developing countries; the main cause being
 increasing skill premia. Third, a trend that may
 counter-balance the potential anti-globalization sentiment
 is the emergence of a global middle class: a group of
 consumers who demand access to, and have the means to
 purchase, international goods and services. The results show
 that the share of these consumers in the global population
 is likely to more than double in the next 20 years. These
 ex-ante trends in global income distribution suggest that
 the mid-1990s could be seen as a turning point after which
 global inequality began showing a negative tendency.
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Global Economic Prospects 2007 : Managing the Next Wave of GlobalizationGlobal Economic Prospects (GEP) 2007 explores the next wave of globalization. While the medium-term outlook for the world economy remains fairly bright, demographic trends will be a major driver of future events and the benefits of globalization are likely to be uneven across regions and countries. Looking at a set of growth scenarios covering the years 2006 to 2030, the report analyzes the opportunities and stresses of integration in order to bring into sharper relief the choices facing the world today. Three prominent features in the next wave of globalization are: the growing economic weight of developing countries in the international economy, the potential for increased productivity that is offered by global production chains, and the accelerated diffusion of technology. The GEP also analyzes three possible consequences: growing inequality, pressures in labor markets, and threats to the global commons. All of these developments, along with deepening economic interdependence, place a burden on the collective actions of the international community: to manage globalization or risk being run over by it.
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Would Freeing Up World Trade Reduce Poverty and Inequality? The Vexed Role of Agricultural DistortionsTrade policy reforms in recent decades have sharply reduced the distortions that were harming agriculture in developing countries, yet global trade in farm products continues to be far more distorted than trade in nonfarm goods. Those distortions reduce some forms of poverty and inequality but worsen others, so the net effects are unclear without empirical modeling. This paper summarizes a series of new economy-wide global and national empirical studies that focus on the net effects of the remaining distortions to world merchandise trade on poverty and inequality globally and in various developing countries. The global LINKAGE model results suggest that removing those remaining distortions would reduce international inequality, largely by boosting net farm incomes and raising real wages for unskilled workers in developing countries, and would reduce the number of poor people worldwide by 3 percent. The analysis based on the Global Trade Analysis Project model for a sample of 15 countries, and nine stand-alone national case studies, all point to larger reductions in poverty, especially if only the non-poor are subjected to increased income taxation to compensate for the loss of trade tax revenue.