Globalization and the Role of Nongovernmental Organization and Transnational Corporations

Topics: United Nations, World Bank, International Monetary Fund Pages: 5 (1890 words) Published: October 2, 2008
Globalization and the Role of Nongovernmental Organization and Transnational Corporations

Ever since people started to migrate and encounter new people, globalization has been a fact of life. Trade, war and movement have spread culture around the world but now with the advent of telecommunication, global transportation, and more money; Globalization is happening at rate that is alarming to some and advantageous to others. Some would say that America is the driver of the globalization vehicle and others claim that America is just an influential player, a backseat driver. Wherever people stand on the issue one thing is clear; NGO’s and TNC’s are the cause and effect of many of the arguments surrounding globalization. NGO’s are created to regulate trade, labor and growth around the world. Instead, according to some NGO’s are hindering and even hurting developing nations, workers and the environment. Transnational Corporations, on the other hand, are the result of the liberalization of trade and markets since World War II and more recently, the end of the Cold War. These corporations, who are mainly headquartered in the United States, have enormous power and flexibility because they are not restrained by the rules of any one state. This has led to improved quality of life around the world, and the availability of goods and services around the world. Alternatively, TNC’s have led to corporations that employ more people than entire counties as well as a polarization of states. Whether you love them or hate them, they are an integral part of human’s success and failures.

The Bretton Woods system was the first example of a monetary organization intended to govern monetary relations among independent states; it was created after WW II and helped pave the way to modern NGO’s and TNC’s. The Bretton Woods system was flawed and the institution has since been dismantled, but the ideas it represented are manifest in the modern NGO’s. The current International Financial Institutions include The World Bank, International Monetary Fund, and the World Trade Organization. In Elke Krahmann’s piece, he cited a description of the reasons for NGO’s and global government originally written by Leon Gordenker and Thomas Weiss; they believe that global governance is “Efforts to bring more orderly and reliable responses to social and political issues that go beyond capacities of states to address individually. Like the NGO universe, global governance implies an absence of central authority, and the need for collaboration or cooperation among governments and others who seek to encourage common practices and goals in addressing global issues.” (Kesselman 256) The reasons that Gordenker and Weiss mentioned are the honorable reasons for the IMF but the truth according to Joseph Stiglitz is that NGO’s are more concerned with keeping money in the hands of the elites and their banks. These three entities are not governed by any one state, but are instead controlled by members of 185 nations in the case of the IMF, 153 in the WTO, and 185 represented in the World Bank. These delegates decide on trade, labor, and development issues facing states. One key feature of the institutions is their ability to loan money to developing nations and impose sanctions in order to stimulate growth. These loans typically have high interest rates and come with stiff restrictions. This is one of Stiglitz’ supporting points, suggesting that IMF’s delegates are elites and have elite friends many of who are finance ministers, because of this the well being of banks is very important to the IMF. This of course, leads to a conflict of interest concerning other institutions and the populations they represent. The IMF may use the conditions imposed on a client nation to influence policy and politics within that state or region. This is unfortunate according to Stiglitz because it may weaken the economy in the long run and destabilize the progress of a state. Additionally,...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay on globalization
  • Essay on Globalization and Transnational Corporations
  • Essay about Globalization and Transnational Corporations
  • A Transnational Corporation Essay
  • Globalization Essay
  • Ukraine's Role in the Process of Globalization Essay
  • Role of International Organizations Essay

Become a StudyMode Member

Sign Up - It's Free