Globalisation and human development: Long-term evidence from countries at different levels of development

Objective: The main goal of this research is to assess the long-term effects of economic, social, and political globalisation on human development, as measured by the Human Development Index (HDI). The study also identifies how these relationships differ across groups of countries at different levels of development, using panel data econometric techniques. Research Design & Methods: The research used a balanced panel dataset, which included 40 countries grouped by HDI development levels across 33 years (from 1990 to 2022). The KOF Globalisation Index captures globalisation through three dimensions: economic, social, and political. The HDI serves as the dependent variable, representing the quality of life. The research methodology uses log-linear panel cointegration models, which employ common correlated effects (CCE) estimators and include a panel error correction model (ECM) to analyse long-run relationship dynamics. Findings: Social globalisation creates positive and substantial effects on HDI in countries at all development levels, including those with very high, medium, and low development, especially in countries with limited access to essential services. The effects of economic globalisation on different groups show no pattern of sustained change, and political globalisation benefits only high-HDI countries that possess strong institutional capacity. The research demonstrates that globalisation and HDI share a cointegration relationship, while developed countries exhibit both rapid adjustment and periodic patterns. Implications & Recommendations: The research demonstrates that globalisation produces varying impacts on human development based on the development stage of a nation and its institutional capabilities. Developing nations need to build stronger institutions and social services to benefit from social globalisation, while economic integration demands domestic reforms that include all segments of society. Advanced countries need to stay actively involved in global politics while developing strategies that suit their individual national situations. Contribution & Value Added: The research adds value to existing literature through its comprehensive evaluation of globalisation’s multiple dimensions on human development, which examines economic, social, and political effects in different development stages. The econometric framework used in this study addresses cross-sectional dependence and heterogeneity while providing policy-relevant insights into the effects of globalisation on quality of life. A key novelty of this article lies in its differentiated analysis across HDI-based country groups, offering long-term evidence on how globalisation’s effects vary depending on national development levels and institutional capacity.