Download - Week 1 discussion
One of the more useful descriptions of globalization is offered
by the political scientist David Held, who identifies it as:
– “the stretching of social relations across space”
– “the intensification of flows and networks of interaction”
– “the increasing interpenetration of economic and social practices”
– “the emergence of a global institutional infrastructure”
Globalization as a process not a thing
Stretched social relations across space
The existence of cultural, economic and political networks of connection across the world
Time-space compression
Time-space compression: processes and
technologies (internet, airplanes, etc.) that reduce the significance of distance
and accelerate the experience of time
Accelerated experience of time
Russian foreign minister Sergei Lavrov and U.S. secretary of state John Kerry in Geneva September 12, 2013 discussing agreement on Syrian
chemical weapons
Increased interpenetration of
economic and social practices
Deepening of economic and social
practices and exchanges which
bring distant cultures, and markets together at the local level and
global stage
Global infrastructure
1) Communications and transportation technologies and standards
2) The formal and informal institutions and political arrangements that facilitate the function of globalized processes
Post-WWII international finance and trade institutions
• Bretton Woods conference in July 1944 set up organizations to regulate international finance and trade following WWII– Participants: 44 allied countries
• Creates the International Bank for Reconstruction and Development (becomes World Bank) and IMF – Three years later the General Agreement on Tariffs and
Trade (GATT) negotiated (replaced by WTO in 1995)
• Underlying principles: Development through open markets; interdependent economies make war less likely; exchange rate stability to prevent sharp contractions in trade
– Founded in 1995 as successor to GATT, the WTO is a forum for negotiating, implementing and enforcing international trade agreements
– Binding and enforceable commitments to non-discriminatory trade practices
World Trade Organization
– Large-scale lender of last resort for countries suffering from exchange rate and balance of payments problems
– Lending terms linked to implementation of macro-economic restructuring
International Monetary Fund
Structural adjustments and the ‘Washington Consensus’
1) Budget cuts2) Devaluation of
currencies3) Trade liberalization4) Ending price controls
or subsidies5) Privatization of state-
owned enterprises6) Tax reforms7) Deregulation
– Provides technical and financial assistance to developing countries for development projects (roads, dams, education, health care, etc.)
– Increasingly assistance is being linked to ‘good governance’ outcomes• Six indicators: Voice and accountability, political
instability and violence, government effectiveness, regulatory burden, rule of law, control of corruption
The World Bank
United Nations
– Founded in 1945 as a replacement for the ineffective League of Nations; provides a forum for international cooperation and dialogue, and ratification of resolutions, concerning a host of political, economic, peace and security, legal, and humanitarian issues
• Four key dimensions of globalization– Stretched social relations across space– Intensification of flows and networks of interaction– Increased interpenetration of economic and social life– Global infrastructure
• Globalization does not float in the ether…it is a set of processes that unevenly connects or binds together societies and places
The increasing degree of globalism is what people are referring to when talking about
globalization
“Globalization is the process by which globalism becomes increasingly thick”
“Globalization and deglobalization refer to the increase or decline of globalism”
Need to distinguish globalization and globalism
So what is globalism?
Two dimensions:
“Globalism is a state of the world involving networks of interdependence at multicontinental distances. The linkages occur through flows and influences of capital and goods, information and
ideas, and people and forces, as well as environmentally and biologically relevant
substances (such as acid rain or pathogens).””
Economic globalism
“Long distance flows of goods, services and capital… organization of processes that are linked to these flows”
Military globalism
“Long distance networks of interdependence in which force, and the threat or promise of force, are employed”
Environmental globalism
“Long distance transport of materials in the atmosphere or oceans, or of biological substances such as pathogens or genetic materials, that affect human health and wellbeing”
Decrease in economic globalism accompanied by increase in military globalism in the years leading up
to WWII
1) Density of networks
2) Increased institutional velocity (how rapidly a system and units within it change)
3) Increased transnational participation and complex interdependence
Present thickening of globalism as leading to changes in not just degree, but also kind:
Spread of the 2007-9 financial crisis across the globe
With increased velocity of flows and density of networks distant events are felt more strongly than before
Globalization and complex interdependence as a challenge to the sovereign state system?
Complex interdependence:
“Multiple channels between societies, with multiple actors, not just states; multiple issues, not arranged in any clear hierarchy; the irrelevance of the threat of or use of force
among states linked by complex interdependence”
“Translated into the language of globalism, the politics of complex interdependence would be one in which levels of
economic, environmental and social globalism are high and military globalism is low”
Why are some countries rich and others poor?
a) Cultural explanations
b) Geographical explanations
c) Institutional explanations
1) Racist or ethnocentric
2) Gets causal relationships wrong—that is, what is seen as cultural practices are product of political institutions, incentives or historical legacies
3) Culture treated as fixed, which makes difficult to explain changes in countries’ economic fortunes, or variations in economic development among countries that putatively share cultural traits
Criticisms of cultural explanations
Geography
Jared Diamond’s “peanut butter
sandwich” map of poorer tropical
and richer temperate zone
countries in Africa
1. Geographical determinism that ignores or is incapable of explaining shifting fortunes over time
2. Difficulty in accounting for exceptions or divergences in countries with similar geographical features without reference to historical, cultural, or institutional factors
Criticisms of geographical explanations
“The reason that Nogales, Arizona, is much richer than Nogales, Sonora, is simple; it is because of the very
different institutions on the two sides of the border, which create very different incentives for the inhabitants of
Nogales, Arizona, versus Nogales, Sonora”
Institutions
Extractive economic institutions
Practices and policies “designed to extract incomes and wealth from one subset of
society [the masses] to benefit a different
subset [the governing elite]”
Inclusive economic institutions
“those that allow and encourage participation
by the great mass of people in economic activities that make
best use of their talents and skills and that
enable individuals to make the choices they
wish”
Inclusive versus extractive economic institutions
“While economic institutions are critical for determining whether a country is poor or
prosperous, it is politics and political institutions that determine what economic institutions a
country has”
The primary importance of political institutions
1) Political pluralism, where power rests with a broad coalition of society or variety of groups, rather than a narrow set of elites
2) Functional central state institutions which are capable of providing public goods, supporting property rights, and ensuring a transparent and fair legal process
Unlike geography and culture (as typically understood), institutions can change fairly rapidly, thus better at explaining
shifts in relative economic fortunes
A key strength of the institutional argument
Criticisms
Not a random distribution of inclusive institutions; broad pattern fits geographical explanations such as temperate
climates, navigable rivers and landlocked countries
“Why have some countries ended up with good institutions and
others haven’t? The most important factor behind their emergence is the historical
duration of centralized government”—Jared Diamond
“The persistence into the twentieth century of a specific institutional pattern inimical to growth in Mexico and Latin
America is well illustrated by the fact that, just as in the nineteenth century, the pattern generated economic
stagnation and political instability, civil wars and coups, as groups struggled for the benefits of power”—Acemoglu and
Robinson