Taking an Easier Path: Globalization and Government Intervention
Taking an Easier Path: Globalization and Government Intervention
As technology evolves, with transportation becoming faster and more convenient, societies and economies all over the world are integrating to a level never before seen. Yet still, poverty is by far one of the most important issues of our time. In this era of rapid globalization, of rapid flow of resources and production, we often debate the question of whether this global integration is truly positive. As globalization happens inevitably, it promises economic growth and the overall wellbeing of all societies, yet some evidence suggests that certain societies are hindered by global integration and increased trading – in particular the poorer end of the spectrum. It is obvious that not all are benefiting from this integration at the same time. Globalization is potentially beneficial to all members of society; however, it requires sound policies and social programs to overcome the often witnessed short-term negative effects that poverty-stricken communities often face because they take longer to adapt than developed countries. In order to understand this, the following paragraphs will explore the negative and positive effects of globalization. There are definitely negative aspects of globalization, such as increasing inequality and decreasing wages in some lesser economically developed countries (LEDC). The fact is, the world has been increasingly globalized and prosperous, “yet it is clear that inequality has grown” (Basu, 2006), and “currently, the richest region has a per capita income that is 20 times the income of the poorest region” (Basu, 2006). Such extreme inequality both between and within countries can be extremely problematic and uncomfortable. “Rising inequality between countries impacts directly the national political economy in the poorer states” (Wade, 2004) as it brings incentive for government corruption in order to live up to the standards of richer states, and also
As technology evolves, with transportation becoming faster and more convenient, societies and economies all over the world are integrating to a level never before seen. Yet still, poverty is by far one of the most important issues of our time. In this era of rapid globalization, of rapid flow of resources and production, we often debate the question of whether this global integration is truly positive. As globalization happens inevitably, it promises economic growth and the overall wellbeing of all societies, yet some evidence suggests that certain societies are hindered by global integration and increased trading – in particular the poorer end of the spectrum. It is obvious that not all are benefiting from this integration at the same time. Globalization is potentially beneficial to all members of society; however, it requires sound policies and social programs to overcome the often witnessed short-term negative effects that poverty-stricken communities often face because they take longer to adapt than developed countries. In order to understand this, the following paragraphs will explore the negative and positive effects of globalization. There are definitely negative aspects of globalization, such as increasing inequality and decreasing wages in some lesser economically developed countries (LEDC). The fact is, the world has been increasingly globalized and prosperous, “yet it is clear that inequality has grown” (Basu, 2006), and “currently, the richest region has a per capita income that is 20 times the income of the poorest region” (Basu, 2006). Such extreme inequality both between and within countries can be extremely problematic and uncomfortable. “Rising inequality between countries impacts directly the national political economy in the poorer states” (Wade, 2004) as it brings incentive for government corruption in order to live up to the standards of richer states, and also
Cited: Bardhan, P. (2006a). Globalization and rural poverty. World Development, 34(8), 1393-1404. Bardhan, P. (2006b). Does Globalization Help or Hurt the Worlds Poor? Scientific American, 294(4), 84-91. Basu, K. (2006). Globalization, poverty, and inequality: What is the relationship? What can be done? World Development, 34(8), 1361-1373. Bhalla, S.S. (2002). Imagine There’s No Country: Poverty, Inequality and Growth and the Era of Globalization. Washington, DC: Institute for International Economics. International Monetary Fund (IMF) (2000). Globalization: Threat or Opportunity? Retrieved March 14, 2007, from http://www.imf.org/external/np/exr/ib/2000/041200.htm Van Dijk, M.P. (2006). Different effects of globalization for workers and the poor in China and India, comparing countries, cities and ICT clusters. Tidschrift voor Economische en Sociale Geografie, 97(5), 503-514. Wade, R.H. (2004). Is Globalization Reducing Poverty and inequality? World Development, 32(4), 567-589. World Bank, Collier P., & Dollar D. (2002). Globalization, Growth, and Poverty: building an inclusive world economy. New York: Oxford University Press. ----------------------- 1