The reactions to the global financial and economic crisis of 2008 to 2009 underline this view since governments have failed to coordinate and have instead responded distinctly. International institutions also seem to have a similar relationship: The more of them a country joins, the less likely it is to get into military conflicts. Greider, W. (1997). Indeed if there is technological progress, there is likely to be increasing globalization; more and more contact and interaction are inevitable as technology brings people in the world closer together. Some attribute it to the power of the world’s hegemon; some, to the increased vulnerability of states to the pressures of international institutions; some, to increased competition among states; others, to a learning process undertaken by countries. These changes are irreversible and often increase over time. Since globalization is an ongoing process, definitive answers to these questions cannot be given. Agreement on the nature of its effects on any of these is scarce. Globalization has developed differently for each; and the fate of globalization lies with the (somewhat independent) decisions of countries. Indeed, the most striking is the different paths that countries have taken since the 1970s. Interestingly, inequality seems to also have risen recently in the developed countries. Nongovernmental organizations also act on the international government stage without belonging to any specific government. Woods, N. (2006). Economic prosperity domestically often depends now on international trade and capital movements around the globe; national security from all sorts of threats depends on the behavior of other countries and nonstate actors; environmental conditions rely on the behavior of other agents globally; and public health relies more and more on transnational factors and the behavior of international agents. Global communication systems are the catalyst for this movement. Stiglitz, J. E. (2002). A major issue is to what extent globalization was purposefully constructed, rather than unintentionally realized. It is important to note that technological change is not just about the economy; such changes have major ramifications for society, culture, and the polity. There is little doubt, however, that these financial shocks can have negative consequences for countries. Existing research points out that globalization has affected economic growth rates, poverty, inequality, democracy, conflict, state capacity, policy and institutional convergence, cultural diversity, volatility and the diffusion of crises, and balance of power between capital and labor. Many questions have been raised about globalization as an outcome that in itself needs explanation. A number of studies of trade have shown that its liberalization in developing countries does not reduce poverty or inequality. The extension of the European Union (EU) to new sets of countries and new issues also characterized this integration movement. Many expected that the integration of developing countries into the world economy would promote economic convergence—that is, it would make the poorest countries grow faster and hence catch up over time with the richest. There do not seem to be similar connections for civil war. Countries have different levels of integration into the world system. Put simply, globalization is the connection of different parts of the world. No country desired such a result, but each one acting on its own best interests adopted policies that resulted in a globalized world. Not all international institutions function adequately; some have serious internal defects that cause them to operate poorly. The pace of globalization may be affected but not its forward movement. The rise of incomes in developing countries has created large new consumer markets. CEO Compensation and America's Growing Economic Divide. The world in depression. For some, the roots of globalization are in technological changes, such as the lowering of the costs of communications and transportation, which make the movement of people, ideas, goods, services, and capital faster and less costly. Many poor countries did not liberalize economically until the late 1990s and later. Criticism of globalization is skepticism of the claimed benefits of globalization. It worked to encourage democratization in certain regions and then to include democracies in this integration process. The causal pathway(s) by which globalization may work to aect politics need greater attention. Such institutions may help states realize cooperative outcomes; they may provide transparency and lower transaction costs for negotiating solutions to transnational issues; they may embody global norms and practices that allow states to identify focal points for cooperation and/or help them enforce compliance with international norms and cooperative agreements. State behavior can create negative externalities for others even in a system that is not very globalized. They might affect economics, politics, society, and culture. Once Britain could no longer dictate the terms of engagement with the world economy, regional blocs developed around the strongest powers. Here the global leader seeks to maximize its own interests and uses its superior resources to bribe and coerce others into following it. This process has been remarked in other areas, from the creation of bureaucracies to deal with science and technology issues to the turn to democracy itself. But if they take decision-making power away from governments, they may undermine democracy at home and the public’s faith in it. The Economic Impact on Developed Nations . Some associate globalization with the homogenization of distinct groups; one example is the loss of many local languages and the increasing diffusion of the use of English. The EU was a major force for movement in this direction; however, European countries joined and expanded the Union for reasons other than globalization, such as domestic politics or international security. However, if they are not productive for states, then this convergence process may be a negative for governments everywhere. Strange, S. (1988). While countries and their governments may try to put up barriers against such changes, it is very difficult for them to successfully fend off the pressures of globalization. 14, 34). Kindleberger, C. P. (1973). Globalization no doubt creates or exacerbates problems that do not respect national borders, but it may also contain pressures that allow countries to better respond to those problems. Follow Linkedin. Reviewed by. Some scholars see no effect of globalization on domestic politics; they claim that domestic political institutions filter and shape such external pressures so that their ultimate effects are a function of domestic politics. Globalization may reduce tendencies toward conflict by making it costlier since countries will have to break their economic ties if they fight; or it may induce conflict as they have more and more linkages that can lead to disputes. Without such benign leadership, the world would not be able to integrate and countries would remain in an isolationist stance trying to beggar their neighbors. Some argue the reverse: Democratization was necessary for the change in policies in many countries that led to greater globalization. There is also debate over how certain ideas come to be dominant. The most common form of globalization in the literature involves the economic integration of national economies into a wider global one, usually through international trade, capital flows, labor movements, and global production networks. But it provides little consensus on the direction or magnitude of these effects. They may have costs as well. Polanyi, K. (1957). McDonald's in Japan , French films being played in Minneapolis, and the United Nations are all representations of globalization. The use of soft power has been perhaps more evident in the case of the United States. While the dynamics of capitalism is changing and each country is unique in its political makeup, globalization is a set-in-stone "program" that is difficult to implement without political unrest. Why has there been a movement toward increasing contact and interaction between states and peoples all over the globe? It boosts international trade and commerce by facilitating the easy movement of capital, labor, goods and services across national borders, thus driving economic growth and the need for trained legal professionals. The decline of British hegemony then ended the period of globalization as powerful rivals developed their own spheres of influence. The global turn to liberal democracy is often cited as an example. Globalization has both secular and cyclical aspects. One country can rarely dictate another’s economic, environmental, security, or public health policy, for example. The consequences of globalization could thus be widespread. Some are dominated by one or two states that coerce others to adopt their preferred norms and practices even if these are not very beneficial for the others. International economic ties have the potential to be used as political leverage. A question of much import has been how globalization has developed, and why it has developed the way it has. Is it through coercion or inducement by a powerful country, such as the United States, that others espouse these ideas? Peter Mandelson served four years as the European Commissioner for Trade . Preexisting domestic institutions and practices then govern whether and how globalization affects internal politics. Due to the globalization of politics, it is possible for organizations to operate at a level that supersedes the state via political integration schemes, states Global Policy. A large debate centers on the impact of globalization on poverty and inequality. Some have suggested that as countries open their economies they become more likely to adopt similar policies and institutions. In part, this is because the North has had faster growth rates than some developing countries. A number of theories exist about its sources. The ability of countries to realize many of their basic goals has become more and more tied to the actions of other countries. The development of nuclear weapons is a case in point. Globalization thus declined during this period. Once we understand more about globalization, we can then address the question of how to manage the process and its effects. Despite the continuing emphasis on promoting global prosperity and achieving a more “just world,” negative aspects of globalization remain rife in our globe. (1996). While countries and their governments may try to put up barriers against such changes, it is very difficult for them to successfully fend off the pressures of globa… The Asian financial crisis of the late 1990s and the recent global financial crisis of 2008 to 2009 are two such examples. The widespread adoption of neoliberal policies, or the so-called Washington Consensus, has been notable since the late 1980s. But it may also make the stakes of cooperation much higher and thus render it less likely. The Impact of Globalization on Economic Growth. The purp… International institutions that states voluntarily join and comply with may help them. In one, the hegemon, who has overwhelming capabilities in all areas relative to other countries, exercises a benign influence over the rest of the world by organizing and paying the costs for such openness and stability. For some authors, this means the integration of countries into a global capitalist system—that is, one based on private property, limited government intervention, and the use of markets to allocate economic value. Baltimore: Johns Hopkins University Press. The causal connection between democratization and globalization is much debated. (Eds.). Growing integration of national economics into a wider global one has usually been achieved through trade liberalization and the pursuit of foreign investment, and sometimes through capital market liberalization. But in a globalized world both of these may be compromised. Debate rages over whether countries have the right to condone all types of practices within their borders or whether there exist certain minimal standards that all countries must follow. The supposed democratic deficit in the EU is one manifestation of this problem. Other times, globalization itself, especially via trade of capital flows, is seen as having an impact on technology; it usually is conceived of as helping induce innovation and speeding its transfer around the world. In periods where such change is very rapid and when the adoption of new ideas and techniques is quick, globalization will progress rapidly. The United Kingdom (UK) and the United States are cited as two examples of this in the mid- to late 19th and mid- to late 20th centuries, respectively. The removal of capital controls from many advanced economies in the 1970s and 1980s, after the termination of the Bretton Woods fixed-exchange rate system, opened these economies even more to global markets. Eichengreen, B. Why have certain aspects of globalization such as international trade moved faster than others? Losing control over monetary policy, especially if a country opens its capital account and lets its currency float, is a well-known example of this. Political Aspect One of the political impacts of globalization was evident when Canada closed its borders to the U.S. due to the spike in COVID-19 cases of the latter country. Globalization may stabilize a system by spreading problems out and bringing counterbalancing forces to bear, but it may also destabilize a system by creating a network of linkages among all countries and across all sectors that transmits and magnifies problems. Economic shocks, such as the 1998 Asian financial crisis and the 2008 financial crisis begun in the United States, spread across the globe rapidly. Frieden, J. Many types of problems that have been endemic to countries for centuries have taken on a new perspective in a globalized world. Globalization in these ways seems to be having a major impact on politics within developed democracies and to be generating a reaction against itself. In a second view, the role of the hegemon is not seen as selfless. New York: Cambridge University Press. Protectionism became the dominant trade policy for many countries; trade and currency blocs formed regionally, often around one powerful country, and military conflict was prevalent. Read The Balance's editorial policies. Full Bio. International institutions embody and diffuse these ideas, as do norm entrepreneurs from global civil society. Assessing the impact of globalization implies that one must hold other factors constant, which is a difficult task. Countries will experience the externalities of other countries’ policies but will often be unable to manage these negative consequences. Berkeley: University of California Press. Many seem to feel that this was the case in the mid- and late 19th century, when critical innovations such as steam power, railroads, and the telegraph changed political, social, and economic life around the globe. The number of extreme poor (those living on less than $1.25/day) decreased from 1.9 billion in 1981 to 1.4 billion in 2005, which is equivalent to a decrease from 50% of the developing countries’ population to 25% thereof (World Bank Annual Report 2009, p. 61). Has globalization gone too far? Nevertheless, 2.5 billion people in the world still live on less than $2 a day (World Bank Annual Report 2008, pp. Furthermore, as distant countries and peoples are brought into ever closer contact, the potential for misunderstandings and disputes rises as their different cultures, values, and beliefs clash; the so-called clash of civilizations is more likely in a highly interdependent world. 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