Economic globalization
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Economic globalization is one of the three main dimensions of globalization commonly found in academic literature, with the two others being political globalization and cultural globalization, as well as the general term of globalization.[1] Economic globalization refers to the widespread international movement of goods, capital, services,
While economic globalization has been expanding since the emergence of
Evolution of globalization
History
International
Beginning as early as 6500 BCE, people in Syria were trading livestock, tools, and other items. In Sumer, an early civilization in Mesopotamia, a token system was one of the first forms of commodity money. Labor markets consist of workers, employers, wages, income, supply and demand. Labor markets have been around as long as commodity markets. The first labor markets provided workers to grow crops and tend livestock for later sale in local markets. Capital markets emerged in industries that require resources beyond those of an individual farmer.[6]
Technology
World War I disrupted economic globalization, with countries adopting protectionist policies and trade barriers, slowing global trade.[7] The 1956 invention of containerized shipping and larger ship sizes reduced costs, facilitating global trade.[8][9]
Globalization resumed in the 1970s as governments highlighted trade benefits. Subsequent technology advancements have accelerated global trade expansion.[10]
The follow-on advances in technology since then have played a pivotal role in the rapid expansion of global trade.[11]
Digital globalization, a subset of economic globalization, involves the worldwide spread of digital flows—information, ideas, innovations—enabled by technology connectivity.[12] It allows more individuals and businesses to engage in the global economy through digital platforms.
Policy and government
The
On 27 October 1986, the
By the time the World Trade Organization was established in 1994 as the baton was passed from the GATT,[13] it had grown to 128 countries, including Czech Republic, Slovakia and Slovenia. The year 1995 saw the WTO pass the General Agreement on Trade in Services, while the 1998 defeat of the OECD's Multilateral Agreement on Investment was a hiccup on the route to economic globalization.
The People's Republic of China (2001) and the last remnants of ex-Soviet bloc countries like Ukraine (2008) and Russia (2012) were admitted much later to the WTO process after painful structural reforms.
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, which entered into force on 1 July 2018, is an effort to harmonize tax regimes in order to prevent multi-national firms from taking advantage of loopholes like Ireland's Green Jersey BEPS tool.
Global agents
International governmental organizations
An
International non-governmental organizations (NGOs)
International non-governmental organizations include charities, non-profit advocacy groups, business associations, and cultural associations. International charitable activities increased after World War II and on the whole NGOs provide more economic aid to developing countries than developed country governments.
Businesses
Since the 1970s, multinational businesses have increasingly relied on
Immigrants
International immigrants transfer significant amounts of money through
Impact
Economic growth and poverty reduction
Economic growth accelerated and poverty declined globally following the acceleration of globalization.
Per capita GDP growth in the post-1980 globalizers accelerated from 1.4 percent a year in the 1960s and 2.9 percent a year in the 1970s to 3.5 percent in the 1980s and 5.0 percent in the 1990s. This acceleration in growth is even more remarkable given that the rich countries saw steady declines in growth from a high of 4.7 percent in the 1960s to 2.2 percent in the 1990s. Also, the non-globalizing developing countries did much worse than the globalizers, with the former's annual growth rates falling from highs of 3.3 percent during the 1970s to only 1.4 percent during the 1990s. This rapid growth among the globalizers is not simply due to the strong performances of China and India in the 1980s and 1990s—18 out of the 24 globalizers experienced increases in growth, many of them quite substantial."[24]
According to the International Monetary Fund, growth benefits of economic globalization are widely shared. While several globalizers have seen an increase in inequality, most notably China, this increase in inequality is a result of domestic liberalization, restrictions on internal migration, and agricultural policies, rather than a result of international trade.[24]
Poverty has been reduced as evidenced by a 5.4 percent annual growth in income for the poorest fifth of the population of Malaysia. Even in China, where inequality continues to be a problem, the poorest fifth of the population saw a 3.8 percent annual growth in income. In several countries, those living below the dollar-per-day poverty threshold declined. In China, the rate declined from 20 to 15 percent and in Bangladesh the rate dropped from 43 to 36 percent.[citation needed][when?]
Globalizers are narrowing the per capita income gap between the rich and the globalizing nations. China, India, and Bangladesh, some of the newly industrialised nations in the world, have greatly narrowed inequality due to their economic expansion.[24]
Global supply chain
The global supply chain consists of complex interconnected networks that allow companies to produce handle and distribute various goods and services to the public worldwide.
Corporations manage their supply chain to take advantage of cheaper costs of production. A supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from
Labor conditions and environment
"Race to the bottom"
Globalization is sometimes perceived as a cause of a phenomenon called the "race to the bottom" that implies that to minimize cost and increase delivery speed, businesses tend to locate operations in countries with the least stringent environmental and labor regulations. Pressure to do this is increased if competitors lower costs by the same means. This both directly results poor working conditions, low wages, job insecurity, and pollution, but also encourages governments to under-regulate in order to attract jobs and economic investment.[8] However, if business demand is sufficiently high, the labor pool in low-wage countries becomes exhausted (as has happened in China),[6] resulting in higher wages due to competition, and more demand from the public for government protection against exploitation and pollution. From 2003 to 2013, wages in China and India have gone up by around 10–20% a year.[28]
Health risks
In developing countries with loose labor regulations, there are adverse health consequences from working long hours and individuals that burden themselves from working within vasts global supply chains.[29] Women in agriculture, for example, are often asked to work long hours handling chemicals such as pesticides and fertilizers without any protection.[27]
Although both men and women experience shortcomings with health, the final reports stated that women, with the double burden of domestic and paid work experience an increased the risk of psychological distress and suboptimal health. Strazdins concluded that negative work-family spillover especially is associated with health problems among both women and men, and negative family-work spillover is related to a poorer health status among women."[30]
It is common for the work lifestyle to bring forth adverse health conditions or even death due to weak safety measure policies. After the tragic collapse of the Rana Plaza factory in Bangladesh where over 800 deaths occurred the country has since then made efforts in boosting up their safety policies to better accommodate workers.[31]
Mistreatment
In developing countries with loose labor regulations and a large supply of low-skill, low-cost workers, there are risks for mistreatment of some workers, especially women and children.[32] Poor working conditions and sexual harassment are just some of the mistreatment faced by women in the textile supply chain. Marina Prieto-Carrón shows in her research in Central America that women in sweatshops are not even supplied with toilet paper in the bathroom every day. The reason it costs corporations more is because people can not work to their full potential in poor conditions, affecting the global marketplace.[33] Furthermore, when corporations decide to change manufacturing rates or locations in industries that employ more women, they are often left with no job nor assistance. This kind of sudden reduction or elimination in hours is seen in industries such as the textile industry and agriculture industry, both of which employ a higher number of women than men.[27] One solution to mistreatment of women in the supply chain is more involvement from the corporation and trying to regulate the outsourcing of their product.[32]
Global labor and fair trade movements
Several movements, such as the fair trade movement and the anti-sweatshop movement, claim to promote a more socially just global economy. The fair trade movement works towards improving trade, development and production for disadvantaged producers. The fair trade movement has reached 1.6 billion US dollars in annual sales.[10] The movement works to raise consumer awareness of exploitation of developing countries. Fair trade works under the motto of "trade, not aid", to improve the quality of life for farmers and merchants by participating in direct sales, providing better prices and supporting the community.[11] Meanwhile, the anti-sweatshop movement is to protest the unfair treatment caused by some companies.
Various
Capital flight
Capital flight occurs when assets or money rapidly flow out of a country because of that country's recent increase in unfavorable financial conditions such as
A 2008 paper published by
Capital flight can cause
Inequality
While within-country income inequality has increased throughout the globalization period, globally inequality has lessened as developing countries have experienced much more rapid growth.[38] Economic inequality varies between societies, historical periods, economic structures or economic systems, ongoing or past wars, between genders, and between differences in individuals' abilities to create wealth.[39] Among the various numerical indices for measuring economic inequality, the Gini coefficient is most often-cited.
Economic inequality includes
Certain demographic changes in the developing world after active
Economic development spurred by international investment or trade can increase local
Resource insecurity
A systematic, and possibly first large-scale, cross-sectoral analysis of
Competitive advantages
Businesses in developed countries tend to be more highly
Tax havens
A
A 2012 report from the Tax Justice Network estimated that between US$21 trillion and $32 trillion is sheltered from taxes in tax havens worldwide.[56] If such hidden offshore assets are considered, many countries with governments nominally in debt would be net creditor nations.[57] However, the tax policy director of the Chartered Institute of Taxation expressed skepticism over the accuracy of the figures.[58] Daniel J. Mitchell of the US-based Cato Institute says that the report also assumes, when considering notional lost tax revenue, that 100% of the money deposited offshore is evading payment of tax.[59]
The
Cultural effects
Economic globalization may affect culture. Populations may mimic the international flow of capital and labor markets in the form of immigration and the merger of cultures. Foreign resources and economic measures may affect different native cultures and may cause assimilation of a native people.[72] As these populations are exposed to the English language, computers, western music, and North American culture, changes are being noted in shrinking family size, immigration to larger cities, more casual dating practices, and gender roles are transformed.
Yu Xintian noted two contrary trends in culture due to economic globalization.[73] Yu argued that culture and industry not only flow from the developed world to the rest, but trigger an effort to protect local cultures. He notes that economic globalization began after World War II, whereas internationalization began over a century ago.[74]
George Ritzer wrote about the McDonaldization of society and how fast food businesses spread throughout the United States and the rest of the world, attracting other places to adopt fast food culture.[75] Ritzer describes other businesses such as The Body Shop, a British cosmetics company, that have copied McDonald's business model for expansion and influence. In 2006, 233 of 280 or over 80% of new McDonald's opened outside the US. In 2007, Japan had 2,828 McDonald's locations.[76]
Global media companies export information around the world. This creates a mostly one-way flow of information, and exposure to mostly western products and values. Companies like CNN, Reuters and the BBC dominate the global airwaves with western points of view. Other media news companies such as Qatar's Al Jazeera network offer a different point of view, but reach and influence fewer people.[77]
Migration
"With an estimated 210 million people living outside their country of origin (
See also
Notes
- ISBN 978-0-470-76642-2.
- ISBN 978-0-19-568909-9.
- ^ James et al., vols. 1–4 (2007)
- ^ a b Gao 2000, p. 4.
- ^ a b "Intergovernmental Organizations (IGOs)". Harvard Law School. Retrieved 12 June 2020.
- ^ a b c Mohr, Angie. "The Effects of Economic Globalization on Developing Countries". Demand Media.
- ^ "In Defense of Globalization". IMF. Retrieved 7 August 2023.
- ^ a b Olney, W. W. (2013). "A race to the bottom? Employment protection and foreign direct investment." Journal of International Economics, 91(2), 191–203.
- ^ Gao 2000.
- ^ a b Raynolds, Murray & Wilkinson 2007, p. 3.
- ^ a b Raynolds, Murray & Wilkinson 2007, p. 15.
- ^ Sanghro, Majid Ali (23 November 2022). "What is Globalization". Retrieved 7 August 2023.
- ^ a b "General Agreement on Tariffs and Trade. Treaty data". Government of the Netherlands. Retrieved 30 December 2020.
- ^ Cebi, Pinar; Ludema, Rodney D. "The Rise and Fall of the Most-Favored-Nation Clause" (PDF). Office of Economics Working Paper (2002–06–B). U.S. INTERNATIONAL TRADE COMMISSION.
- ^ "MOST-FAVOURED NATION TREATMENT" (PDF). UNCTAD Series on Issues in International Investment Agreements II. UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT. 2010.
- ^ Irwin, Douglas A. (November 2017). Clashing Over Commerce: A History of US Trade Policy. University of Chicago Press.
- ISSN 0099-9660. Retrieved 28 October 2017.
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- ^ Thomas, Vladimir (1 May 2017). The world transformed 1945 to the present (Second ed.). Michael H. Hunt. pp. 427–429.
- ^ Smith, Noah (6 January 2014). "The Dark Side of Globalization: Why Seattle's 1999 Protesters Were Right". The Atlantic Monthly Group.
- JSTOR j.ctt7sjz7.
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- ^ a b c Dollar, David; Kraay, Aart. "Trade, Growth, and Poverty". Finance and Development. International Monetary Fund. Retrieved 6 June 2011.
- ISSN 0022-4359.
- OCLC 317598837.
- ^ a b c Spieldoch, Alexandra (2007). "A Row to Hoe: The Gender Impact of Trade Liberalization on our Food System, Agricultural Markets and Women's Human Rights". International Gender and Trade Network.
- ^ "Here, there and everywhere" (PDF). The Economist. Retrieved 30 August 2019.
- ^ Pang, Tikki, and G. Emmanuel Guindon. "Globalization and Risks to Health." EMBO Reports.
- PMID 26174027.
- ^ Herlinger, Chris. "Bangladesh Counts The Human Cost of the Garment Industry. (Cover Story)." National Catholic Reporter 52.14 (2016): 1–16. Academic Search Premier. Web
- ^ a b Prieto-Carrón, Marina. "Is there Anyone Listening?: Women Workers in Factories in Central America, and Corporate Codes of Conduct." Development 47.3 (2004): 101–05. ProQuest. Web.
- ^ Berik, G., and Y. Van Der Meulen Rodgers. "What's Macroeconomic Policy Got to Do with Gender Inequality? Evidence from Asia." Global Social Policy 12.2 (2012): 183–89. Web
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- ^ "Illicit Financial Flows From Developing Countries: 2002–2006, Dev Kar and Devon Cartwright-Smith, 2008" (PDF). Archived from the original (PDF) on 19 October 2016. Retrieved 22 April 2013.
- ^ "Hundreds of bosses flee UK over 50% tax". The Times. 13 December 2009. Archived from the original on 29 October 2010.
- ^ "Debt crisis: Greek euro exit looms closer as banks crumble". The Daily Telegraph. 16 May 2012. Archived from the original on 12 May 2023.
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- ^ a b Berg, Andrew G.; Ostry, Jonathan D. (2011). "Equality and Efficiency". Finance and Development. 48 (3). Retrieved 10 September 2012.
- ^ U.S. Income Inequality: It’s Not So Bad By Thomas A. Garrett| Federal Reserve Bank of St. Louis| Spring 2010
- ISBN 978-1-84614-039-6.
- doi:10.1023/A:1026205114860. Archived from the originalon 24 February 2021. Retrieved 25 September 2012.
- ^ UNDP 2013, Introduction.
- ^ UNDP 2013, p. 25.
- ^ Wolf, Martin (2004). "Why Globalization Works". Yale University Press. Archived from the original on 10 May 2013. Retrieved 6 April 2013.
- ^ "Global trade linked to resource insecurity". Cosmos Magazine. 26 October 2020. Retrieved 3 December 2020.
- ^ Dunphy, Siobhán (20 November 2020). "Is globalisation compatible with sustainable and resilient supply chains?". European Scientist. Retrieved 3 December 2020.
- ^ "Globalized economy making water, energy and land insecurity worse: study". phys.org. Retrieved 3 December 2020.
- S2CID 228952251. Retrieved 3 December 2020.
- ^ Shafik Hebous (2011) "Money at the Docks of Tax Havens: A Guide", CESifo Working Paper Series No. 3587, p. 9
- ^ Dharmapala, Dhammika und Hines Jr., James R. (2006) Which Countries Become Tax Havens?
- ^ Moran Harari, Markus Meinzer and Richard Murphy (October 2012) "Financial Secrecy, Banks and the Big 4 Firms of Accountants" Archived 7 April 2016 at the Wayback Machine Tax Justice Network
- ^ "The Truth About Tax Havens – retrieved 28 December 2007" (PDF). Retrieved 22 March 2011.
- ^ "International Taxation: Large U.S. Corporations and Federal Contractors with Subsidiaries in Jurisdictions Listed as Tax Havens or Financial Privacy Jurisdictions GAO:GAO-09-157" (GAO-09-157). Government Accountability Office. 18 December 2008. Retrieved 21 January 2009.
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(help) - ^ Tax Justice Network (22 July 2012) "Revealed: Global super-rich has at least $21 trillion hidden in secret tax havens"
- ^ Canadian Broadcasting Co. (22 July 2012) "Wealthy hiding $21 trillion in tax havens, report says"
- ^ John Whiting, tax policy director at the UK's Chartered Institute of Taxation commented "There clearly are some significant amounts hidden away, but if it really is that size what is being done with it all?" and "If the suggestion is that such amounts are actively hidden and never accessed, that seems odd – not least in terms of what the tax authorities are doing. In fact, the US, UK and German authorities are doing a lot", and noting that if the figures were accurate "you would expect the havens to be more conspicuously wealthy than they are". However, he also admitted that "I cannot disprove the figures at all, but they do seem staggering" "Tax havens: Super-rich 'hiding' at least $21tn". BBC News. 22 July 2012. Retrieved 3 October 2012.
- ^ "Fighting Anti-Tax Haven Demagoguery on CNN". 30 July 2012. Archived from the original on 27 December 2013. Retrieved 3 October 2012.
- ^ "Picking Up the Tab" U.S. Public Interest Research Group, April 2012
- ^ "These Islands Aren’t Just a Shelter From Taxes" New York Times, 5 May 2012
- ^ "Tax avoidance: fair or foul?" Archived 27 May 2013 at the Wayback Machine Accountancy Age Debates, 14 January 2013
- ^ "Google will not oppose clampdown on tax avoidance, chairman says" Guardian, 28 January 2013
- ^ "Tax avoidance isn't a left or right issue, it's a cancer eating our democracy" New Statesman, 21 June 2012
- ^ "Helsinki Boycotts Tax Havens", Inter Press Service, 6 October 2012
- ^ "David Cameron: Tax avoiding foreign firms like Starbucks and Amazon lack 'moral scruples'" The Telegraph, 4 January 2013
- ^ "Germany's Merkel calls for G8 fight against tax havens" Reuters, 13 February 2013
- ^ "Which Fortune 500 Companies Are Sheltering Income in Overseas Tax Havens?" Archived 24 April 2013 at the Wayback Machine Citizens for Tax Justice, 17 October 2012
- ^ "Britain could end these tax scams by hitting the big four" The Guardian, 10 December 2012
- ^ "Did the Bounds of Cyber War Just Expand to Banks and Neutral States?" The Atlantic, 17 August 2012
- ^ "Aggregate Demand, Instability and Growth" Review of Keynesian Economics, January 2013 (see also this review of the paper)
- ISBN 978-0-203-39219-5.
- ISBN 978-1-56518-176-2.
- ISBN 978-1-56518-176-2.
- ISBN 978-1-4129-7582-7.
- ISBN 978-1-4129-7582-7.
- ISBN 978-1-4051-8407-6.)
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: CS1 maint: multiple names: authors list (link - S2CID 144565818.
References
- Gao, Shangquan (2000). "Economic Globalization: Trends, Risks and Risk Prevention: 2000" (PDF).
- Bordo, Michael D.; Taylor, Alan M.; Williamson, Jeffrey G. (1 November 2007). Globalization in Historical Perspective. University of Chicago Press. ISBN 978-0-226-06599-1.
- Held, David, ed. (2004). A Globalizing World?: Culture, Economics, Politics (2nd ed.). London; New York: Routledge, in association with the Open University.
- James, Paul; Gills, Barry (2007). Globalization and Economy, Vol. 1: Global Markets and Capitalism. London: Sage Publications.
- James, Paul; Patomäki, Heikki (2007). Globalization and Economy, Vol. 2: Global Finance and the New Global Economy. London: Sage Publications.
- James, Paul; Palen, Ronen (2007). Globalization and Economy, Vol. 3: Global Economic Regimes and Institutions. London: Sage Publications.
- James, Paul; O’Brien, Robert (2007). Globalization and Economy, Vol. 4: Globalizing Labour. London: Sage Publications.
- Raynolds, Laura T.; Murray, Douglas; Wilkinson, John (11 June 2007). Fair Trade: The Challenges of Transforming Globalization. Routledge. ISBN 978-1-134-00263-4.
- UNDP (2013). "Human Development Report 2013 - The Rise of the South: Human Progress in a Diverse World" (PDF). Retrieved 14 July 2014.
- Eun, Cheol S.; Resnick, Bruce G. (2012). International Financial Management. McGraw-Hill Education (Asia) and China Machine Press. ISBN 978-0-07-803465-7.
External links
- Media related to Economic globalization at Wikimedia Commons