PLEBISCITO.EU | PNV. Press News Veneto

At the beginning of this decade the World Bank published the following research paper: Growth is Good for the Poor. At the time all the talk was about the impact of globalization, and many questioned the effect it had on the poorest members of society.

The fear was that increased trade only favored part of the population, and further marginalized the poorer citizens of a country. The above mentioned research helped debunk this myth thanks to an econometric analysis based on data from 92 countries, spanning 4 decades.

The authors found strong evidence that the average income of the poorest grew in proportion with the average income of a country. This finding was empirically true no matter the continent, the time period, the country’s wealth or growth rate. Overall growth indeed benefits the poor as well.

This past decade saw a different branch of economic research studying another impact of globalization: could it be that with free trade smaller countries have more efficient policies, are more competitive in the global market, and experience higher growth rates?

Several academic papers made this assertion. For instance, this is an empirical article authored by economic professors from Harvard, Stanford and Brown University, and published in 2000 by the American Economic Review: Economic Integration and Political Disintegration.

The argument goes that since smaller countries are (perhaps by necessity) more open to trade, and trade is strongly linked to growth, then small economies should thrive in a global economy.

This is indeed the case. Maybe it’s because public policy in smaller countries is more in tune with the needs of its citizens, and this creates more economic well being.

Looking at the empirical evidence from these two branches of research, a simple question arises spontaneous: are smaller countries better at reducing poverty? Intuitively 1+1=2, but a specific economic study is needed for a definite answer.

This is a question that can be extended beyond income distribution and to other social indicators. Are smaller countries providing better health care, better education, better resources for science and technology, and better safety nets?

At least for Europe the data is available at Eurostat waiting to be analyzed. And if this is indeed the case, as I strongly suspect, then its time for ideological soul searching.

In an integrated Europe where 19th century nationalism makes little sense, should political parties concerned with social justice be on the side of the Scots, the Catalans, the Flemish, the Venetians and the Sardinians?

For instance, isn’t it anacronistic for the Italian center-left party to be fervently faithful to political boundaries determined during 19th century expansionism? Ironically, the Italian container, inefficient in its size in an integrated Europe, is the most blatant poverty trap.

Food for thought as the 2009 recession deepens: the poor, the unemployed, and the retired are in great need of bold political action.

Lodovico Pizzati
Partito Nasional Veneto – Venetian National Party

Venetian Version