International Political Economy: Trade, Globalization & Development Although 'globalization' has become a controversial buzzword in the past few years, international trade has been an important part of the world economy for a very long time. The 'opening up' or 'liberalization' of most country's domestic markets to trade has occurred gradually over the past 50 years, in large part due to the success of the General Agreement on Tariffs and Trade (GATT), which has now become institutionalized as the World Trade Organization (WTO). Access to other markets brings opportunities, but it also creates vulnerabilities like any competitive market. As trade becomes more open, there will be winners and losers among the producers and consumers in participating (and nonparticipating) countries. Differences among countries in their health, safety, environmental and labor standards are also sources of contention, because they are sometimes perceived as unfair sources of competitive advantage, or because of perceived pressures to harmonize standards and policies across nations. Although increased international trade has spurred tremendous economic growth across the globe—raising incomes, creating jobs, reducing prices, and increasing workers’ earning power—trade can also bring about economic, political, and social disruption. Since the global economy is so interconnected, when large economies suffer recessions, the effects are felt around the world. When trade decreases, jobs and businesses are lost. In the same way that globalization can be a boon for international trade; it can also have devastating effects. What is Globalization? In general terms globalization is an economic, political, technological, and socio-cultural process where the importance of state boundaries decreases and the countries and their people live in an integrated global system. The term has become particularly popular in IPE and in cultural studies.
At the macro level… • • • • • Greater integration and interdependency of national economies Freer movement of goods, services, capital, and knowledge Prevalence of regional trading blocs Emergence of monetary unions Convergence of customer lifestyles, requirements, etc.
Phases of Globalization 1st Phase: 1830, peaking around 1880 Aided by railroads, ocean transport, rise of manufacturing and trading companies 2nd Phase: 1900, peaking around 1930 Fueled by electricity and steel 3rd Phase: 1948, peaking around 1970 GATT, End of WWII, Marshall Plan…
4th Phase: 1980, peaking around 1997 Technological advances, Internet, Privatization… Perspectives on Globalization Globalization can be studied as a … • • • Process As a cause or driver Consequence
Three main dimensions of globalization: i. Economic Dimensions of Globalization: Economic globalization is one of the most frequently used in discussions of development, trade, and IPE.It is a process by which the economies of the world become increasingly integrated, leading to global economy and, increasingly, global economic policymaking, for example, through international agencies such as WTO, IMF, and WB. Socio-cultural Dimensions of Globalization: Social globalization means processes whereby many social relations become relatively delinked from territorial geography, so that human lives are increasingly played out in the world as a single place. Cultural globalization refers to an emerging “global culture”, in which people more often consume similar goods and services across countries and use of common language. Examples: Coco-Cola, Mc Donald and use of English. Political Dimensions of Globalization: In political studies globalization ideas have been significant in thinking about ideology and in political behaviour in terms of issue areas such as ecopolitics and human rights. In terms of the environment and human rights clear evidence of the need for global codes of conduct. In terms of ideology writers like Huntington and Fukuyama have pointed to the...
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