Currently, poverty and food deficiency are prevalent in the region where two-thirds of the population is resided according to World Bank estimates [Klytchnikova (2017). Counting calories: the data behind food insecurity and hunger. The World Bank Data Blog. Available at http://blogs.worldbank.org/opendata/counting-calories-data-behind-food-insecurity-and-hunger?CID=POV_TT_Poverty_EN_EXT]. This panel data study is set to analyze the effect of competitiveness, governance and globalization on poverty in case of 73 developing countries from 2005 to 2016. The indicators of governance are extracted from World Governance Indicators, and an overall index is constituted using factor analysis. This study has estimated eight models with different proxies of governance and one without governance. The results estimated using feasible generalized least squares approach which confirmed that all governance indicators have a negative impact on poverty. Similarly, globalization, competitiveness and development expenditures also assist in poverty alleviation.
This is a preview of subscription content, log in to check access.
Buy single article
Instant access to the full article PDF.
Price includes VAT for USA
Subscribe to journal
Immediate online access to all issues from 2019. Subscription will auto renew annually.
This is the net price. Taxes to be calculated in checkout.
UNDP (2012). Governance and development. P. 3. Available at http://www.un.org/millenniumgoals/pdf/Think%20Pieces/7_governance.pdf.
Cann (2016). What is Competitiveness? World Economic Forum.
Thus, all the dimensions of globalization are indices with same range, making their coefficients comparable by scale and units.
Adonsou, F. D., & Sylwester, K. (2016). Financial development and poverty reduction in developing countries: New evidence from banks and microfinance institutions. Review of Development Finance,6(1), 82–90.
Ajisafe, R. A. (2016). Corruption and poverty in Nigeria: Evidence from ARDL bound test and error correction model. Journal of Emerging Trends in Economics and Management Sciences,7(3), 156–163.
Akmal, M. S., Ahmad, Q. M., Ahmad, M. H., & Butt, M. S. (2007). An empirical investigation of the relationship between trade liberalization and poverty reduction: A case for Pakistan. The Lahore Journal of Economics,12(1), 99–118.
Akram, Z., Wajid, S., Mahmood, T., & Sarwar, S. (2011). Impact of poor governance and income inequality of poverty in Pakistan. Far East Journal of Psychology and Business,4(3), 43–55.
Argent, J., & Begazo, T. (2015). Competition in Kenyan markets and its impact on income and poverty: A case study on sugar and maize. World Bank Policy Research working paper (7179). Retrieved from: http://documents.worldbank.org/curated/en/239021468254953019/pdf/WPS7179.pdf. Accessed 10 Feb 2018.
Arshed, N., Anwar, A., Hassan, M. S., Bukhari, S. (2019). Education stock and its implication for income inequality: The case of Asian economies. Review of Development Economics. https://doi.org/10.1111/rode.12585.
Arshed, N., Anwar, A., Kousar, N., & Bukhari, S. (2018). Education enrollment level and income inequality: A case of SAARC economies. Social Indicators Research , 140(3), 1211–1224.
Asghar, N., Nasreen, S., & Rehman, H. (2011). Relationship between FDI and economic growth in selected Asian countries: A panel data analysis. Review of Economics and Finance,2, 84–96.
Baltagi, B. (2008). Econometric analysis of panel data. Hoboken: Wiley.
Barhoumi, K. (2006). Differences in long run exchange rate pass-through into import prices in developing countries: An empirical investigation. Economic Modelling,23(6), 926–951.
Becker, G. S. (1995). Human capital and poverty alleviation. Human Resources Development and Operations. HRO Working Papers; no. 52. Washington, DC: World Bank. Retrieved From: http://documents.worldbank.org/curated/en/121791468764735830/Human-capital-and-poverty-alleviation. Accessed 10 Feb 2018.
Bilen, M., Yilanci, V., & Eryüzlü, H. (2017). Tourism development and economic growth: A panel Granger causality analysis in the frequency domain. Current Issues in Tourism,20(1), 27–32.
Black, J. (2003). A dictionary of economics. Oxford: Oxford University Press.
Blaxall, J. (2000). Governance and poverty. Paper presented at the joint workshop on poverty reduction strategies in Mongolia. The World Bank, Ulan Bator, Mongolia, 4 to 6 October. Retrieved from: http://www.worldbank.org/poverty/strategies/events/mongolia/gov.pdf. Accessed 10 Feb 2018.
Bosco, B., & Poggi, A. (2016). Government effectiveness, middle class and poverty in the EU: A dynamic multilevel analysis. University of Milan Bicocca, Department of Economics, Management and Statistics Working Paper No. 344. Retrieved from: https://www.researchgate.net/profile/Bruno_Bosco/publication/304624274_Government_Effectiveness_Middle_Class_and_Poverty_in_the_EU_A_Dynamic_Multilevel_Analysis/links/577500c808aead7ba06fbe66/Government-Effectiveness-Middle-Class-and-Poverty-in-the-EU-A-Dynamic-Multilevel-Analysis.pdf. Accessed 5 Feb 2018.
Buccirossi, P., Ciari, L., Duso, T., Spagnolo, G., & Vitale, C. (2013). Competition policy and productivity growth: An empirical assessment. Review of Economics and Statistics,95(4), 1324–1336.
Cain, J., Hasan, R., & Mitra, D. (2012). Trade liberalization and poverty reduction: New evidence from Indian states. In A. Pangariya & J. Bhagwati (Eds.), India’s reforms: How they produced inclusive growth (pp. 91–185). New York: Oxford University Press.
Carballo, A. E. (2010). Poverty and corruption in Latin America, challenges for a sustainable development strategy. Paper presented to the 5th Latin American Congress of Political Sciences, organized by the Latin American Association of Political Sciences (ALACIP). Buenos Aires, July 28–30 2010. Retrieved from: https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2056462_code1327823.pdf?abstractid=2056462&mirid. Accessed 5 Feb 2018.
Chen, K. M., & Wang, T. M. (2015). Determinants of poverty status in Taiwan: A multilevel approach. Social Indicators Research,123(2), 371–389.
Davidson, R., & MacKinnon, J. G. (1993). Estimation and inference in econometrics. New York: Oxford University Press.
Dewilde, C. (2014). Determinants of poverty in Europe. In A. C. Michalos (Ed.). Encyclopedia of quality of life and well-being research (pp. 1588–1594). Dordrecht: Springer.
Deyshappria, R. (2018). Globalization-poverty nexuses: Evidences from cross-country analysis. Empirical Economic Review,1(1), 25–48.
Dickens, W. T., Sawhill, I. V., & Tebbs, J. (2006). The effects of investing in early education on economic growth. Washington, DC: Brookings Institution.
Dincer, O. C., & Gunalp, B. (2008). Corruption, income inequality, and poverty in the United States. Retrieved from: http://ssrn.com/abstract=1158446. Accessed 1 Feb 2018.
Dung, C. X (2004). The impacts of trade openness on growth, poverty, and inequality in Vietnam: Evidence from cross-province analysis. Paper Presented in at the 53rd AFSE Congress, Paris. Retrieved from: https://scholar.google.com.pk/scholar?hl=en&q=Dung%2C+C.+X+%282004%29.+The+impacts+of+trade+openness+on+growth%2C+poverty%2C+and+inequality+in+vietnam%3A+evidence+from+cross-province+analysis.&btnG=&as_sdt=1%2C5&as_sdtp. Accessed 10 Feb 2018.
Eid, U. (2000). Good governance for poverty reduction. In Asian development bank seminar on the new social policy and poverty agenda for Asia and the Pacific, Chiang Mai, Thailand.
Germain, R. (2010). Global politics and financial governance. London: Macmillan International Higher Education.
Goff, M. L., & Singh, R. J. (2014). Does trade reduce poverty? A view from Africa. Journal of African Trade,1(1), 5–14.
Gomanee, K., Morrissey, O., Mosley, P., & Verschoor, A. (2003). Aid, pro-poor government spending and welfare. Working Paper No. 03/03. Retrieved from: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=412244. Accessed 10 Feb 2018.
Granger, C. W. (1969). Investigating causal relations by econometric models and cross-spectral methods. Econometrica: Journal of the Econometric Society,37, 424–438.
Greene, W. H. (2012). Econometric analysis (7th ed.). Upper Saddle River, NJ: Prentice Hall.
Grindle, M. S. (2004). Good enough governance: Poverty reduction and reform in developing countries. Governance,17(4), 525–548.
Gujarati, D. N. (2009). Basic econometrics. New York: Tata McGraw-Hill Education.
Gupta, S., Davoodi, H., & Alonso-Terme, R. (2002). Does corruption affect income inequality and poverty? Economics of Governance,3(1), 23–45.
Hamdi, M. T., & Mohamed, B. E. N. (2012). Développement humain durable, qualité de la croissance économique et transformation structurelle en Afrique. European Journal of Social Law/Revue Européenne du Droit Social,16(4), 160–172.
Haq, R., & Zia, U. (2009). Does governance contribute to pro-poor growth? Evidence from Pakistan (No. 2009: 52). Pakistan Institute of Development Economics. Retrieved From: http://www.pide.org.pk/pdf/Working%20Paper/WorkingPaper-52.pdf. Accessed 25 Jan 2018.
Hasan, R., Quibria, M. G., & Kim, Y. (2003). Poverty and economic freedom: Evidence from cross country data. East–West center Working Paper No. 60, East West Center. Online Available at: https://www.researchgate.net/publication/5021345_Poverty_and_-Economic_Freedom_Evidence_from_Cross-Country_Data. Accessed 10 Feb 2018.
Hassan, M. S., Akbar, M. S., Wajid, A., & Arshed, N. (2016). Poverty, urbanization and crime: Are they related in Pakistan. International Journal of Economics and Empirical Research,4(9), 483–492.
Herrmann, P., Tausch, A., Heshmati, A., & Bajalan, C. S. (2009). Efficiency and effectiveness of social spending. IZA Discussion Paper Series no 3482. Retrieved from https://papers.ssrn.com/soL3/papers.cfm?abstract_id=1136283. Accessed 10 Feb 2018.
Heshmati, A. (2004). The relationship between income inequality, poverty and globalization. IZA Discussion Paper Series no 1277. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=586066. Accessed 3 Feb 2018.
Heshmati, A. (2007). The relationship between income inequality, poverty and globalization. In M. Nissanke & E. Thorbecke (Eds.), The Impact of Globalization on the World’s Poor (pp. 59–93). London: Palgrave Macmillan.
Heshmati, A., & Kim, J. (2014). A survey of the role of fiscal policy in addressing income inequality, poverty reduction and inclusive growth. IZA Discussion Paper Series no 8119. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2429598&-download=yes. Accessed 10 Feb 2018.
Heshmati, A., & Lee, S. (2010). The relationship between globalization, economic growth and income inequality. Journal of Globalization Index,1(2), 87–117.
Heshmati, A., Maasoumi, E., & Wan, G. (2015). Poverty reduction policies and practices in developing Asia. Berlin: Springer.
Holmberg, S., & Rothstein, B. (2010). Quality of Government is Needed to Reduce Poverty and Economic Inequality. QoG Working paper series, 2010(3), 3. Retrieved From: http://qog.pol.gu.se/digitalAssets/1350/1350124_20103_holmberg_rothstein.pd. Accessed 5 Feb 2018.
Im, K. S., Pesaran, M. H., & Shin, Y. (1997). Testing for unit roots in heterogeneous panels. Cambridge: University of Cambridge.
Imran, M., Hosen, M., & Chowdhury, M. A. F. (2018). Does poverty lead to crime? Evidence from the United States of America. International Journal of Social Economics,45(10), 1424–1438. https://doi.org/10.1108/IJSE-04-2017-0167.
Irz, X., Lin, L., Thirtle, C., & Wiggins, S. (2001). Agricultural productivity growth and poverty alleviation. Development Policy Review,19(4), 449–466.
Jain, V. (2012). The development expenditure by the central government of India and its impact on poverty and per capita income in the country. International Journal of Economics and Research,3(4), 121–133.
Janjua, P. Z., & Kemal, U. A. (2011). The role of education and income in poverty alleviation: A cross country analysis. The Lahore Journal of Economics,16(1), 143–172.
Johansson, C., & Lext, C. J. (2013). Corruption and income inequality: A study of the impact from different legal systems. Retrieved From: http://www.diva-portal.org/smash/get/diva2:633870/FULLTEXT01.pdf. Accessed 8 Feb 2018.
Judge, G. G., Griffiths, W. E., Hill, R. C., Lutkepohl, H., & Lee, T. C. (1985). The theory and practice of econometrics (2nd ed.). New York: Wiley.
Jung, S., Cho, S. H., & Roberts, R. K. (2015). The impact of government funding of poverty reduction programmes. Papers in Regional Science,94(3), 653–675.
Kalim, R., Arshed, N., & Shaheen, S. (2019). Does competitiveness moderate inclusive growth: A panel study of low-income countries. Competitiveness Review, 29(2), 119–138.
Kanwal, A., & Munir, K. (2015). The impact of educational and gender inequality on income inequality in South Asia. Retrieved From: https://mpra.ub.uni-muenchen.de/66661/1/MPRA_paper_66661.pdf. Accessed 10 Feb 2018.
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2011). The worldwide governance indicators: Methodology and analytical issues. Hague Journal on the Rule of Law,3(2), 220–246.
Khemili, H., & Belloumi, M. (2018). Cointegration relationship between growth, inequality and poverty in Tunisia. International Journal of Applied Economics, Finance and Accounting,2(1), 8–18.
Kline, P. (2014). An easy guide to factor analysis. London: Routledge.
Kordalska, A., & Olczyk, M. (2016). Global competitiveness and economic growth: A one-way or two-way relationship? Equilibrium, Quarterly Journal of Economics and Economic Policy,11(1), 121–142.
Korez-Vide, R., & Tominc, P. (2016). Competitiveness, entrepreneurship and economic growth. In P. Trapczynsk, L. Puslecki, & M. Jarosinski (Eds.), Competitiveness of CEE Economies and Businesses (pp. 25–44). Cham: Springer.
Laabas, B., & Limam, I. (2004). Impact of public policies on poverty, income distribution and growth. IFPRI/API collaborative research project. Retrieved from: http://126.96.36.199/images/publication/pdfs/264/264_wps0401.pdf. Accessed 10 Feb 2018.
Lee, E., & Vivarelli, M. (Eds.). (2004). Understanding globalization, employment, and poverty reduction. New York, NY: Palgrave Macmillan.
Levin, A., Lin, C. F., & Chu, C. S. J. (2002). Unit root tests in panel data: Asymptotic and finite-sample properties. Journal of Econometrics,108(1), 1–24.
Maddala, G. S., & Lahiri, K. (2006). Introduction to econometrics (4th ed.). New York: Wiley.
Musiba, C. (2014). The impact of government expenditure on pro poor sectors in reducing poverty: The case of Kibaha District (Doctoral dissertation). Retrieved From: http://scholar.mzumbe.ac.tz/bitstream/handle/11192/360/MSc%20ECO-Dissertation-Crispin%20Musiba-2013.pdf?sequence=1. Accessed 10 Feb 2018.
Nasreen, S. (2011). Export-growth linkages in selected Asian developing countries: Evidence from panel data analysis. Asian Journal of Empirical Research,1(1), 1–13.
Nazir, R. (2013). “Governance led poverty” a case study of Pakistan. European Journal of Developing Country Studies,15, 2668–3385.
Negin, V., Rashid, Z. A., & Nikopour, H. (2010). The causal relationship between corruption and poverty: A panel data analysis. MPRA paper no 24871. Available at https://mpra.ub.uni-muenchen.de/24871/1/MPRA_paper_24871.pdf.
Negin, V., Rashid, Z. B., & Nikopour, H. (2011). The causal relationship between corruption and poverty: A panel data analysis. Journal of International Economic Review,4(1), 23–38.
Neutel, M., & Heshmati, A. (2006). Globalization, inequality and poverty relationships: A cross country evidence. IZA Discussion Paper Series no 2223. Retrieved from https://papers.ssrn.com/sol3/Papers.cfm?Abstract_id=921391. Accessed 10 Feb 2018.
Njong, A. M. (2010). The effects of educational attainment on poverty reduction in Cameroon. International Journal of Educational Administration and Policy Studies,2(1), 001–008.
N’zue, F. F., & N’guessan, C. J. F. (2006). The causality between corruption, poverty and growth: A panel data analysis. Les cahiers du SISERA, 1. Working Paper Series. Retrieved From: http://pdf.usaid.gov/pdf_docs/Pnadh629.pdf. Accessed 10 Feb 2018.
Odior, E. S. O. (2014). Government expenditure on education and poverty reduction: Implications for achieving the MDGs in Nigeria a computable general equilibrium micro-simulation analysis. Asian Economic and Financial Review,4(2), 150–172.
Ogboru, I., & Abimiku, A. C. (2010). The impact of corruption on poverty reduction efforts in Nigeria. In Annual national economic society (NES) conference. Retrieved From: https://www.researchgate.net/profile/Dr_Abimiku/publication/228469169_THE_IMPACT_OF_CORRUPTION_ON_POVERTY_REDUCTION_EFFORTS_IN_NIGERIA/links/54fc5ade0cf270426d102825.pdf. Accessed 2 Feb 2018.
Olofin, O. P., Adejumo, A. V., & Sanusi, K. A. (2015). Determinants of poverty level in Nigeria. Journal of Sustainable Development,8(1), 235–241.
Pedroni, P. (2008). Nonstationary panel data. Notes for IMF Course (not publically available). Williamstown, MA: Williams College.
Pervez, S., & Rizvi, S. B. H. (2014). Determinants of poverty in case of Pakistan. Educational Research,5(6), 192–201.
Pradhan, B. K., & Mahesh, M. (2014). Impact of trade openness on poverty: A panel data analysis of a set of developing countries. Economics Bulletin,34(4), 2208–2219.
Qadir, N., & Majeed, M. T. (2018). The impact of trade liberalization on health: Evidence from Pakistan. Empirical Economic Review,1(1), 71–108.
Qadir, U., Kemal, M. A., & Mohsin, H. M. (2000). Impact of trade reforms on poverty [with comments]. The Pakistan Development Review,39(4), 1127–1137.
Rahayu, I. P., & Widodo, T. (2013). The causal relationship between corruption and poverty in ASEAN: A general method of moments/dynamic panel data analysis. Journal of Economics, Business and Accountancy Ventura,15(3), 527–536.
Rajkumar, A. S., & Swaroop, V. (2008). Public spending and outcomes: Does governance matter? Journal of Development Economics,86(1), 96–111.
Ravallion, M., & Chen, S. (1997). What can new survey data tell us about recent changes in distribution and poverty? The World Bank Economic Review,11(2), 357–382.
Rewilak, J. (2017). The role of financial development in poverty reduction. Review of Development Finance,7(2), 169–176.
Rigobon, R., & Rodrik, D. (2004). Rule of law, democracy, openness, and income: Estimating the interrelationships (No. w10750). National Bureau of Economic Research. Retrieved From: http://www.nber.org/papers/w10750. Accessed 10 Feb 2018.
Rizk, R. (2012). Governance and its impact on poverty reduction: Is there a Role for knowledge management? International Journal of Innovation and Knowledge Management in Middle East and North Africa,1(1), 81–104.
Rodrik, D. (2018). Technology and Developing Countries; Will new technology help or harm developing countries? Economia Para El Desarrollo. Retrieved from http://economiaparaeldesarrollo.blogspot.com/?cv=1. Accessed 10 Feb 2018.
Rothstein, B., & Holmberg, S. (2011). Correlates of corruption. In The Quality of Government Institute, University of Gothenburg Working Paper Series. Retrieved From: http://www.pol.gu.se/digitalAssets/1357/1357840_2011_12_rothstein_holmberg.pdf. Accessed 10 Feb 2018.
Satti, S. L., Hassan, M. S., Hayat, F., & Paramati, S. R. (2015). Economic growth and inflow of remittances: Do they combat poverty in an emerging economy? Social Indicators Research,127(3), 1119–1134.
Sebudubudu, D. (2010). The impact of good governance on development and poverty in Africa: Botswana-A relatively successful African initiative. African Journal of Political Science and International Relations,4(7), 249–262.
Siddique, H. M. A., Shehzadi, I., Shaheen, A., & Manzoor, M. R. (2016). The impact of governance and institutions on education and poverty alleviation: A panel study of SAARC economies. Science International Lahore,28(2), 1431–1435.
Sumarto, S., Suryahadi, A., & Arifianto, A. (2003). Governance and poverty reduction; evidence from newly decentralized Indonesia. MPRA Working paper SMERU research institute. Retrieved from https://mpra.ub.uni-muenchen.de/58023/1/MPRA_paper_58023.pdf. Accessed 10 Feb 2018.
Sustainable Development Goals. (SDG). Goal 1: End Poverty in All its Forms Everywhere. Retrieved From: http://www.un.org/sustainabledevelopment/poverty/
Tariq, M., Idrees, A., Abid, M., & Samin, T. (2014). Rationale effects of poverty in Pakistan. IMPACT: International Journal of Research in Business Management,2(6), 1–12.
Topalova, P. (2007). Trade liberalization, poverty and inequality: Evidence from Indian districts. In Globalization and poverty (pp. 291–336). University of Chicago Press. Retrieved From: http://www.globalsepri.org/UploadPhotos/2008912182833302.pdf.
Trabelsi, M. A., & Liouane, N. (2013). Trade liberalization and fight against poverty. International Journal of Economics and Financial Issues,3(2), 370–375.
Verner, D. (2004). Education and its poverty-reducing effects: The case of Paraiba, Brazil. Policy Research Working Paper 3321, and Washington, DC: World Bank. Retrieved From: http://library1.nida.ac.th/worldbankf/fulltext/wps03321.pdf.
WDI. (2017). World development indicators. Available at https://datacatalog.worldbank.org/dataset/world-development-indicators.
WEF. (2017). World economic forum—the global competitiveness report 2017–2018. Available at https://www.weforum.org/reports/the-global-competitiveness-report-2017-2018.
WGI. (2017). Worldwide governance indicators. Available at https://datacatalog.worldbank.org/dataset/worldwide-governance-indicators.
Wilhelm, V., & Fiestas, I. (2005). Exploring the link between public spending and poverty reduction: lessons from the 90 s. World Bank Institute Working Paper, Washington: World Bank.
Woldekidan, H. (2015). The role of foreign aid in reducing poverty: Time Series evidence from Ethiopia. Journal of Economics and International Finance,7(3), 59–71.
UNDP, Governance for sustainable human development: A UNDP policy document, Glossary of key terms, at http://mirror.undp.org/magnet/policy/glossary.htm.
World Bank. (2016). Poverty and shared prosperity 2016: taking on inequality. World Bank Group. Retrieved from https://openknowledge.worldbank.org/bitstream/handle/10986/25078/9781464809583.pdf.
World Economic Forum. (2015). How much has global poverty fallen over the past 25 years? Retrieved form: https://www.weforum.org/agenda/2015/07/how-much-global-poverty-fallen-past-25-years/.
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
See Table 9.
About this article
Cite this article
Hassan, M.S., Bukhari, S. & Arshed, N. Competitiveness, governance and globalization: What matters for poverty alleviation?. Environ Dev Sustain 22, 3491–3518 (2020). https://doi.org/10.1007/s10668-019-00355-y
- Poverty gap
- Developing countries