For that, the main causes are faster economic growth in rich countries than in poor countries, stagnation in Africa and the rural parts of China and India. Even within China and India a growing income gap between rural and urban areas is boosting global inequality. This, in turn, says Mr Wade, is bound to create political instability, both within countries and between them. Most advocates of free trade, including The Economist, have taken a different view, arguing that growth reduces poverty and that inequality as such is a secondary concern. The causes of these regions isolation are what need to be addressed.
Growth remains the best, indeed the only, hope for the world s poorest.
If the anti-globalists create obstacles to freer trade, according to this view, the damage to everyone would be huge. Poor countries would be hit especially hard. Hernando de Soto, an economist from Peru, has added an interesting twist to the debate about global inequality, claiming that it is the lack of strong property rights, and the legal structures needed to make them enforceable, which is one of the leading obstacles of underdevelopment in many poor countries, rather than exploitation by the first world. Because the poor often live on land or in houses where ownership is disputed, they cannot borrow against what they own , or even sell it with much confidence. This has locked up a tremendous amount of capital, even in poor countries.