Modelling the Policy Challenges Confronting Globalising Developing Countries

The paper models the policy challenges facing globalising developing countries. Models from pure theory of international trade, the small open economy model, growth accounting, the Solow-Swan model, the Gravity Model, Models of Portfolion Diversification, Currency Crises Models. These models are reviewed to distill policy guidelines for the promotion of the globalisation of developing countries. The overriding objective of promoting globalisation of developing countries is to reduce poverty and income inequality between and within those countries. Pro- and anti-globalisers are currently locked in a heated controversy as to whether the latest wave of globalisation has bucked the past trends of increasing poverty and income inequality in developing countries. Anti-globalisers lament that protracted waves of globalisation have failed to extricate developing countries from the structural malaise that traps them in a vicious circle of poverty. They advocate the radical reshaping of the internatinal financial architecture to make globalisation work for the developing countries by reducing their vulnerability to recurrent financial crises and crisis contagion. The paper concludes by reviewing the research of the Geography and the Institution Schools, that offers new policy vistas for promoting globalisation of the developing countries