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The Evidence on Globalisation


  • Niklas Potrafke

    1. Center for Economic Studies, University of Munich, Munich, Germany
    2. Ifo Center for Public Finance and Political Economy, Munich, Germany
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  • I would like to thank Andreas Bergh, Christian Bjørnskov, Jörg Breitung, Chun-Ping Chang, Seo-Young Cho, Lukas Figge, Helmut Herwartz, Arye Hillman, Richard Jong-A-Pin, Björn Kauder, Christopher Kilby, Andreas Steiner, Jan-Egbert Sturm, Heinrich Ursprung and three anonymous referees for their very helpful comments, hints and suggestions. I am also grateful to Raphael Becker, Gavin Goy, David Happersberger, Benjamin Larin, Margret Schneider and Christian Simon for their excellent research assistance.


Globalisation is blamed for many socioeconomic shortcomings. I discuss the consequences of globalisation by surveying the empirical globalisation literature. My focus is on the KOF indices of globalisation that have been used in more than 100 studies. Early studies using the KOF index reported correlations between globalisation and several outcome variables. Studies published more recently identify causal effects. The evidence shows that globalisation has spurred economic growth, promoted gender equality and improved human rights. Moreover, globalisation did not erode welfare state activities, did not have any significant effect on labour market interaction and hardly influenced market deregulation. It increased, however, within-country income inequality. The consequences of globalisation thus turn out to be overall much more favourable than often conjectured in the public discourse.