Definition, waves and history of globalization process

Group report.

Globalization is fundamentally political, not technological or economic phenomenon.

Chudnov Nikita

Coopens Michiel

Sysoeva Ekaterina

Zinovieva Irina

Terekhova Anastasiia

Nowadays, the process of globalization affects almost all spheres of human activity. Even though it seems to be familiar to everyone, globalization process is still not easy to define. In our work we tried to shed the light on the phenomenon nature and to demonstrate how factors of economics, politics and technology interact determining this complex process. In our opinion, the globalization was triggered by the technological progress which enabled economics to develop by leaps and bounds what soon forced governments to intervene the process. Purposes of latters differ over countries and in the course of time, but there is no doubt that nowadays politics affects globalization crucially.

Definition, waves and history of globalization process

From the economic point of view, the globalization starts where barriers between national markets for services, goods, capital and labor disappear and a single market is created. From this prospective, “globalization refers to global economic integration of many formerly national economies into one global economy, mainly by free trade and free capital mobility, but also by easy or uncontrolled migration. It is the effective erasure of national boundaries for economic purposes. International trade (governed by comparative advantage) becomes interregional trade (governed by absolute advantage). What was many becomes one.”^[1]

From the more political perspective globalization and its origin can be explained in a slightly different way: “The word globalization is used in three distinct but interrelated senses: First, to describe the economic phenomenon of increasing integration of markets across political boundaries (whether due to political or technological causes); second, to describe the strictly political phenomenon of falling government-imposed barriers to international flows of goods, services, and capital; and, finally, to describe the much broader political phenomenon of the global spread of market oriented policies in both the domestic and international spheres.”^[2]

More integrated approach also offers its own definition of globalization and its nature: “Globalization can be defined as a set of economic, social, technological, political and cultural structures and processes arising from the changing character of the production, consumption and trade of goods and assets that comprise the base of the international political economy.^[3]”

The beginning of globalization process, its first wave, often associated with the transport cost reduction in the early nineteenth century. Those technological progress enabled trade between countries expend sharply (see pic.1, 2 illustrating transportation cost reduction between France and Australia that time and increase in the trade between UK and the US respectively).

Pic.1 Pic.2

The pace of globalization was slowed down due to World War I and corresponding increase in trade restrictions. Later on after World War II international institutions such as the World Bank, IMF and GATT were created with the help of national government coordination. It has initiated next wave of globalization accompanied by the significant decline in tariffs for trade in the 1980s and 1990s and an increasing numbers of emerging markets who adopted trade-oriented policies.

Pic. 3 Pic.4

What is more important about the developing process of globalization is that there is a significant difference in the first and the second waves of this process. During the first wave period, if measure the globalization process by convergence of international prices, 72% of globalization process can be explained by technology development (transportation cost reduction) and 28% by liberalization process in general. The second wave is driven the vice versa: 74% due to the policies changes, like abolishment of barriers within the countries.^[4](see pic. 5)

Pic. 5

Дата добавления: 2015-11-14