Globalization and Its Positive and Negative Effects


Globalization and integration are the main tendencies in the modern world. The concept of globalization is one of the most complex ones including all spheres of human activities and performance. Globalization deals with economic and social relations that determine the political and cultural life of the nations and geographical regions. Despite the apparent benefits of the globalized world, some critics reject the opportunities and strengths of globalization (Bhagwati 20). Globalization distinguishes between “interdependence of markets and production in different countries;” “(perception of) living and working in a worldwide context;” and a “process that affects every aspect in the life of a person, community or nation” (Brown & Lauder, p. 43).

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Positive effects of globalization involve free trade and integrated economic relations, low barriers to trade and cultural communication, political unity and easy travel, technology transfer, and labor turnover. Governments take measures to make their economies more or less attractive to global investors. In addition, nation-states have retained control over education, infrastructure, and, most importantly, population movements. Indeed, immigration control, together with population registration and monitoring, has often been cited as the most notable exception to the general trend towards global integration. (Friedman, p. 11). Although only 2% of the world’s population live outside their country of origin, immigration control has become a central issue in most advanced nations. Many governments seek to restrict population flows, particularly those originating in the poor countries of the global South. Even in the United States, annual inflows of about 600,000 immigrants during the 1990s reached only half the levels recorded during the first two decades of the 20th century. Finally, the series of drastic national security measures that were implemented worldwide as a response to the terrorist attacks of 9/11 reflect political dynamics that run counter to the hyper globalizers’ predictions of a borderless world. Some civil rights advocates even fear that the enormous resurgence of patriotism around the world might enable states to re-impose restrictions on the freedom of movement and assembly (Wade et al, p. 77). At the same time, however, the activities of global terrorist networks have revealed the inadequacy of conventional national security structures based on the modern nation-state system, thus forcing national governments to engage in new forms of international cooperation (Hirst and Thompson, p. 4). Following Stiglitz (2002):

”Globalization can further be defined as the arrival of ‘self-generating capital’ at the global level: that is, capital as capital, capital in the form of the TNC, free of national loyalties, controls, and interests. This is different from the mere internationalization of capital, which assumes a world of national capitals and nation-states; it is the supersession by the capital of the nation-state.

At the outset of the 21st century, the world finds itself in a transitional phase between the modern nation-state system and postmodern forms of global governance (Yip, p. 99). Regional clubs and agencies have sprung up across the world, leading some observers to speculate that they will eventually replace nation-states as the basic unit of governance. Starting out as attempts to integrate regional economies, these regional blocs have, in some cases, already evolved into loose political federations with common institutions of governance. On a global level, governments have formed a number of international organizations, including the UN, NATO, WTO, and OECD. Full legal membership of these organizations is open to states only, and the decision-making authority lies with representatives from national governments (Nadkarni and Perez, p. 54). The proliferation of these transworld bodies has shown that nation-states find it increasingly difficult to manage sprawling networks of social interdependence. Kenichi Ohmae (1985) states:

“The global economy is becoming so powerful that it has swallowed most consumers and corporations, made traditional national borders almost disappear, and pushed bureaucrats, politicians, and the military toward the status of declining industries”.

In spite of benefits and opportunities proposed by integrated world, there are some weaknesses and threats of globalization. Globalization leads to exploitation of labor in third world countries, it ruins national identity and promotes international (American) values and traditions (Levitt, p. 73). Globalization prevents weak nations from development opportunities and allows developed nations to exploit their natural resources. A group of globalization skeptics highlights the central role of politics in unleashing the forces of globalization, especially through the successful mobilization of political power. In their view, the rapid expansion of global economic activity can be reduced neither to a natural law of the market nor to the development of computer technology. After all, economic forms of interdependence are set into motion by political decisions, but these decisions are nonetheless made in particular economic contexts. The economic and political aspects of globalization are profoundly interconnected. There is no question that recent economic developments such as trade liberalization and deregulation have significantly constrained the set of political options open to states, particularly in the global South. For example, it has become much easier for capital to escape taxation and other national policy restrictions. For example, “tribal areas in India where poverty is acute may not be connected sufficiently to the mainstream economy where growth occurs” (Bhagwati, p. 57).

In sum, globalization brings both opportunities and threats to modern countries caused by their economic and political stage of development. Te emerging structure of global governance is also shaped by ‘global civil society’, a realm populated by thousands of voluntary, non-governmental associations of worldwide reach. International NGOs like Amnesty International or Greenpeace represent millions of ordinary citizens who are prepared to challenge political and economic decisions made by nation-states and intergovernmental organizations. Some globalization researchers believe that political globalization might facilitate the emergence of democratic transnational social forces anchored in this thriving sphere of global civil society (Keegan and Green, p. 101). Predicting that democratic rights will ultimately become detached from their narrow relationship to discrete territorial units, these optimistic voices anticipate the creation of a democratic global governance structure based on A number of less optimistic commentators have challenged the idea that optical globilization is moving in the direction of cosmopolitian democracy. Most criticism boil down to the charge that such a vision indulges in an abstract idealism that fails to engage current political developments on the level of public policy. Skeptics have also expressed the suspicion that the proponents of cosmopolitanism do not consider in sufficient detail the cultural feasibility of global democracy. In other words, the worldwide intensification of cultural, political, and economic interaction makes the possibility of resistance and opposition just as real as the benign vision of mutual accommodation and tolerance of differences. Developed nations assure the public that the elimination or reduction of trade barriers among nations will enhance trade and economic integration, increase wealth of developing nations and secure peaceful international relations.

Works Cited

  1. Bhagwati, J. 2004, In Defense of Globalization. Oxford: Oxford University Press.
  2. Brown, P. and Lauder, H. 2001, Capitalism and Social Progress: The Future of Society in a Global Economy, London: Palgrave.
  3. Friedman, Th.2000, The Lexus and the Olive Tree: Understanding Globalization. Anchor; 1 Anchor edition.
  4. Hirst, P. and Thompson, K. 1999, Globalization in Question: The International Economy and the Possibility of Governance, Second Edition; Cambridge: Polity Press.
  5. Keegan, W. J., Green. M. C. 2004, Global Marketing. Prentice Hall; 4 edition.
  6. Kotabe, M., Helsen, K. 2006, Global Marketing Management. Wiley.
  7. Levitt, Theodore. 1983, “The Globalization of Markets.” Harvard Business Review,  pp. 92-102.
  8. Nadkarni, S. Perez, P.D. (2007). Prior Conditions and Early International Commitment: The Mediating Role of Domestic Mindset. Journal of International Business Studies, 38 (1), pp. 160-165.
  9. Ohmae, Kenichi. 1985, Triad Power – The Coming Shape of Global Competition. New York: Freepress.
  10. Stiglitz, J. 2002, Globalization and its Discontents, London: Allen Lane.
  11. Wade, R., Kambhampati, U. S., Guista, M. D. 2006, Critical Perspectives on Globalization. Edward Elgar Publishing.
  12. Yip, George S. 1995, Total Global Strategy – Managing for Wordwide Competitive Advantage. Prentice Hall, New Jersey.
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