Globalization and economic integration can reduce poverty by expanding trade, investment, technology transfer and employment. However, they can deepen poverty when gains are unequal or international shocks disproportionately harm vulnerable groups.
Globalization is the intensification of cross-border flows of goods, capital, people and ideas. Economic integration reduces barriers and coordinates economic rules. In Development and Sustainability, poverty is contested: it may concern income, capabilities, security or relative inequality.
| Case | Mechanism and effect on poverty |
|---|---|
| Vietnam | Export growth and investment create jobs and public revenue. After joining the World Trade Organization in 2007, poverty at the World Bank's lower-middle-income threshold fell from about in 2010 to in 2020. |
| Bangladesh | Competition for low costs can weaken wages and labour protection. The 2013 Rana Plaza collapse killed 1,134 people, exposing unsafe conditions in global garment supply chains. |
| Mexico | Integration can distribute gains unevenly. Export manufacturing concentrated in northern states, while poorer southern states such as Chiapas benefited less. |
| International shocks | Dependence transmits crises. Russia's 2022 invasion of Ukraine disrupted grain and energy markets, raising living costs in import-dependent states. |
A liberal perspective emphasizes trade and interdependence as routes to development. A neo-Marxist perspective highlights unequal power within global production networks. Domestic taxation, education, labour regulation and welfare policies determine whether integration's gains reduce poverty broadly.
For example, Vietnam paired export-led growth with investments in basic services, while Bangladesh’s 2018 minimum-wage increase showed how state regulation can redistribute some gains from integration, even though enforcement and worker bargaining power remained uneven.
The common misconception is that globalization automatically eliminates poverty. It creates opportunities, but institutions determine who benefits and who bears risks.
For an HL Paper 3 response, connect poverty to another HL topic area, such as technology or borders, and use dated evidence. Examiners reward balanced analysis of mechanisms, concepts and perspectives, not a one-sided claim.