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Global Finance Hurts the Poor

By Didier Jacobs

Oxfam America, May 1, 2002

Didier Jacobs

Oxfam America, May 2002.

This report summarizes what we know and still need to know about the impact of global private finance on global poverty. Analyzing this issue is inherently difficult because there are hardly any direct effects to observe. By definition, poor people do not own a lot of financial assets at all, and few owe debts to formal financial companies. Hence changes in financial prices affect them only indirectly, either through changes in economic growth or through chains of complex redistribution mechanisms that are very hard to measure. Most of the existing literature therefore focuses on the impact of global private finance on economic growth, and a large part of this report is dedicated to critically assessing that literature. However, this report also covers what we know about redistribution effects, particularly those linked to financial volatility.
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