What Is The Globalization Essay Example for Free

What Is The Globalization Essay Foreword    The Economist has called   ‘globalisation’   the most abused word of the 21st century. Ironically, its clichà © status does not contribute much to common understanding of the term. The more extensively it is used by both scientists and popular media, the more ambiguous it appears. That is why the first and foremost task of the current report is to consider the term’s definitions and the scope of phenomena it covers. Besides, I would like to focus on the main challenges globalisation presents to public policy-making, paying attention especially to   the ones which affect states’ sovereignty and at the same time cause a number of other issues. What is Globalisation? Definitions of Globalisation First, let us dwell upon some of the possible definitions of the word ‘globalisation’. â€Å"Globalization (or globalisation) in its literal sense is a social change, an increased connectivity among societies, and their elements due to transculturation, the explosive evolution of transport, and communication technologies to facilitate international cultural and economic exchange. The term is applied in various social, cultural, commercial and economic contexts. Globalization can mean 1)The formation of a global village- closer contact between different parts of the world, with increasing possibilities of personal exchange, mutual understanding and friendship between world citizens; 2) Economic globalization more freedom of trade and increasing relations among members of an industry in different parts of the world (globalization of an industry); 3) The negative effects of for-profit multinational corporations- the use of substantial and sophisticated legal and financial means to circumvent the bounds of local laws and standards, in order to leverage the labor and services of unequally-developed regions against each other. ( Globalization,2004 ) Thus, the notion is viewed predominantly from the social angle in its core meaning, and the scope of further implications is determined by the specific field or context of its concrete application. In   Globalization and Its Discontents   a few different definitions are provided.  Ã‚   â€Å"Globalization can be defined as the unfolding resolution of the contradiction between ever expanding capital and its national political and social formation†¦ Globalization can also be grasped as the triumph of capitalism, that is, as the ascendancy of economics over politics, of corporate demands over public policy, of the private over the public interest, of the TNC ( transnational corporations) over the national state †¦.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†¦Ã¢â‚¬  ( McBride 2000, pp.8- 9). These definitions   are confined to one nucleus understanding that globalisation should be viewed   in terms of correlation between economy and politics. It is economy that takes over the purely national institutions in the course of globalisation. The two following phenomena are of special importance for the current report,   since   they generate the main challenges to public policy, which will be considered in the next part. 1) Increase in the share of the world economy controlled by multinational corporations 2) Erosion of national sovereignty through establishment of transnational institutions, quasi governments. It is necessary to note, that these two phenomena are closely interrelated, transnational institutions forming a kind of legal basis for corporations’ power implementation. The increasing role of TNCs and transborder institutions naturally confront the status quo intra- and international relations. What challenges globalisation presents to states’ public policy and what new way of thinking and policy-making can evolve as a result of such confrontation is discussed in the next part. III. Globalisation and Public Policy The main trends of globalisation: which of them can present a challenge? In his article Democracy, globalization, and the problem of the state Michael Goodhart focuses on the trends of globalisation. I will try to make out , which problem the government faces to handle each of them. One of such trends consists in the so-called interpenetration of markets as a result of their expansion. The trend definitely puts policy-makers in front of a dilemma: how to keep the balance between fair competition of free market and the necessity to protect home industry Another one refers to the rapid development in information and communication technologies such as Internet and satellite communication.   This is definitely one of the main benefits of globalisation, though it can cause some problems as well, particularly the one of security, and, I am afraid, not only information security â€Å"Fragmentation or localization: the trend toward ethnic revivalism, reinvigorated nationalism, religious fundamentalism, and other local patterns of identification and organization† (Goodhart 2002) is a logical counteraction to unification and standardization globalisation can bring. This is a form of resistance, which can be abused by manipulators of public consciousness. The next two trends are of extreme importance for the current report, and they do challenge policy-makers around the globe. I will give an exact quotation from M. Goodhart’s research article:   The first of them is â€Å"expanding power of TNCs and other non-state institutions of governance: the growing prominence of TNCs both as economic entities eager to elude the direct control and regulation of states and as actors and agents in international governance. Many observers note the parallel expansion of other quasi-public and private institutions of governance† (Goodhart 2002) Another strong trend can be described as â€Å"declining policy and regulatory role of the state: the diminishing policy autonomy of states and their inability to remain effective actors in international political and economic affairs. The claim is that markets constrain or dictate state policy; rapid capital flows and speculation against currencies can destabilize and even wreck national economies.† (Goodhart 2002) Further on, I will give them consideration from a slightly different angle The Global World vs. Sovereignty.    â€Å"A more interesting and, from a policy perspective, more promising question is how states and governments might react to the phenomenon of globalization and any potential challenge to their sovereignty arising from it. Just how does globalization challenge a governments sovereignty?† (Reinicke 1998, p. 53) To answer this question a distinction between external an internal sovereignty should be drawn   . â€Å"Both are relational concepts. But whereas the former focuses on a states external environment and characterizes relations among states within the international system, the latter depicts a states setting within its own territory, characterizing, for example, relations between a government and its citizens, the economy, or other, more narrowly defined groups and institutions. From the perspective of this study, public policy is defined as the principal instrument by which governments operationalize internal sovereignty both in a constitutive and in an executive sense.   (Reinicke1998, pp.53-4) What is usually meant by public policy? What is the scope of policy-makers’ activity? This is a typical encyclopaedia definition: â€Å"Public policy is the study of policy making by governments. . A governments public policy is the set of policies (laws, plans, actions, behaviors) that it chooses. Birkland offers up these common traits of all definitions of public policy (p. 20): The policy is made in the publics name. Policy is generally made or initiated by government. Policy is interpreted and implemented by public and private actors. Policy is what the government intends to do. Policy is what the government chooses not to do† (Globalization,2004)   Traditionally, state policy is strictly divided into domestic and foreign, which becomes impossible in the global world. The distinction is blurred; political and economic management is thus challenged. The distinction between internal and external sovereignty is to facilitate a more profound understanding of the nature of this challenge and to give the answer to the question whether globalization violates states sovereignty. So, we can speak of internal and external instead of domestic and foreign, and in their turn these two dimensions are correlated with globalization and interdependence correspondingly.   The term   Ã¢â‚¬Ëœcomplex interdependence’   was first coined to describe a condition in which autonomous states are related by a growing number of channelspolitical, social, economic, cultural, and others. So interdependence, or mutual dependence â€Å"implies sensitivity or vulnerability to an external force. The units to be studied when examining and measuring interdependence are territorially bound, sovereign nation-states. International interdependence thus denotes a condition of mutual sensitivity and vulnerability among states in the international system. From the perspective of each state, the source of this sensitivity and vulnerability is external† (Reinicke1998, p.55) The main feature of economic interdependence is   an increased cross-border flow of goods , services and capitals . It defines the division of labour among national economies. All the factors form the framework of international finance and trade.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   â€Å"However, despite this expanded flow of goods, services, and capital across borders, national frameworks for policymaking under conditions of interdependence remain for the most part separate from the international arena. In other words, the increased interaction of national economies due to rising specialization leads to heightened interdependence, or, as is often argued, simply dependence, yet national governments remain the principal center of political and economic power as well as the locus of decision-making. Economic events in other countries do not have a direct and immediate impact on the domestic economy but are filtered through a set of policy boundaries, the effectiveness of which begins at, but does not reach beyond, the territory of the domestic economy.†( Reinicke,1998, p.55) Reinicke also points out that it is not de jure legal sovereignty but de facto operational sovereignty which is challenged by interdependence. â€Å"In operational terms, internal sovereignty in todays modern democracy means the ability of a government to formulate, implement, and manage public policy t and society at large†¦A threat to a countrys operational internal sovereignty implies a threat to its ability to conduct public policy. With respect to the economy, the legal dimension of internal sovereignty becomes operational when governments collect taxes or regulate private sector activities, assuming that the boundaries that define the relationship between the public and the private sector are both stable and symmetric. †¦In contrast to internal sovereignty, external sovereignty implies the absence of a supreme authority and therefore the independence of states in the international system.† (Reinicke1998, p.57) The two concepts of sovereignty are closely interrelated, one giving basis or rational to the existence of another. It is quite clear that a state’s sovereignty cannot possibly be implemented through its external element because it is internal regularities and legal and public patterns   that hold a state together. According to what has been previously said about interdependence and challenges it presents to sovereignty, it is crucial to focus on the impact of globalisation. A few definitions of globalisation have already been given in previous parts of the current report. Another one is necessary within the given context. â€Å"According to one definition, globalization in its pure form is a process that subsumes and rearticulates national economies into the global economy through cross-national processes and transactions. These processes and transactions take on an autonomous role in a consolidated global marketplace for production, distribution, and consumption. According to this view, the global economy dominates national economies existing within it.† (Reinicke1998, p. 63) Hence, the attention should be drawn to the fact that while interdependence is, so to speak, cross- or transeconomical, being coherent element, connecting national economies,   globalisation is something that lies within the economy, i.e. it is intrinsic, inherent to them. â€Å"As national borders no longer encompass sufficient territory to function as self-contained markets for global companies, the spatial structure and dynamics that delineate the geography of private sector economic activities are becoming decoupled from the territorial structure and dynamics that define political geography, that is, the territorially bound nation-state and its power of decision-making within the economy†¦ Qualitatively, this disjuncture, or mismatch, between political and economic geography does not challenge the external sovereignty of states. It cannot. Rather, by altering the spatial relationship between the private and the public sector, global corporate networks challenge the internal sovereignty of states. Specifically, since the organizational logic of globalization induces corporations to seek the fusion of multiple, formerly segmented national markets into a single whole, it generates an economic geography that subsumes multiple political geographies. As a result, a government no longer has a monopoly of legitimate power over the territory within which corporations organize themselves. The greater the mismatch between political and economic geography, the more difficult it will be for national governments to act in an inclusive manner, allowing individuals to coexist and interact in a relatively predictable environment. This leads to the heightened perception of risk and insecurity widely observed in our societies† (Reinicke1998, p.64-65) Globalisation world is the world of information. The ability to conduct public policy properly depends on the governments’ access to information. The challenge is, their authorities spread only to a geographically national territories, not to the spheres of actual influence. To provide security, they need to obtain   operational information about economic actors, which do not necessarily perform their businesses within a   geographically restricted territory. Thus, the so-called information asymmetries arise. These asymmetries have always been the case in the modern world but the more globalised it gets, the more dramatic these gaps appear. The governments sometimes face the challenge of the most crucial information’s absence, which leads to not   at all unfounded anxiety of whether they are able to ensure national and global security. For example, it may present a huge difficulty for tax-assessing and collecting. But the information gaps may lie not only in the sphere of economy. A tragic evidence of traditional institutions’ inconsistency was September 11. â€Å"It needs to be recognised that globalisation is not just about increased flows between territorially distinct units, but also represents a more fundamental challenge to the spatial logic of international relations. The weapons systems of 11 September were launched from the eastern seaboard of the USA, not from across its borders. The perpetrators and their supporters were citizens of numerous countries. Most of the perpetrators had been educated in the USA and some were even US citizens. The target was not the military capacity of the USA but the symbols of its global hegemony. The fact that so many victims were non-American also reminds us that US power is embedded in transnational networks that transcend national boundaries. A new security politics needs to recognise the increasingly meaningless separation of the domestic and the international that informs so much conventional security thinking† (Beeson, Bellamy 2003 ). What happened is partially a result of the disjuncture between traditional governance, bounded spatially, and the global world following the new logics â€Å"Given the expansive nature of globalization, the spatial symmetry between the public and the private is disappearing†¦Like interdependence, globalization does not and cannot in any way challenge the legal internal sovereignty of a government. Globalization challenges internal operational sovereignty, and it is important for the subsequent discussion to keep this distinction in mind. Thus, just as states became increasingly sensitive and vulnerable to the actions of other states as increasing interdependence weakened their external operational sovereignty, so their internal operational sovereignty is being undermined by globalization, as territorially bounded governments can no longer project their power and policymaking capacity over the territory within which a global industry operates† (Reinicke1998, p.66) The problem does not only refer to global security and   global economy but to civil cociety and its citizens rights. â€Å"Although individuals may exercise their legal right to vote, the power or influence of that vote in shaping public policy has decreased with the decline in operational internal sovereignty and will continue to do so. Ultimately, a persistent weakness and failure of internal sovereignty, therefore, will lead to a questioning of the institutions and processes of democracy itself†Ã‚   (   Reinicke1998 , p.69) To sum up, â€Å"the globalization of industry presents a challenge to the capacity of governments to govern. But this challenge to their ability to conduct public policy is not an external challenge. It does not emanate from another state, as usually conceptualized in the standard approaches to the study of international relations, and in particular of international interdependence, which focuses on external sovereignty. Rather, the challenge comes from within each country, as economic networks (legal and illegal alike) increasingly operate in a nonterritorial functional space that defies individual territorialities and thus internal sovereignties† (Reinicke1998, p.69) Governments response In the light of the challenges,   which were considered above the question arises, in what way should governments react to globalisation and its consequences.   W.Reinicke   suggests three possible ways to deal with the issue, namely defensive intervention, offensive intervention and global public policy. â€Å"Policymakers can intervene defensively or offensively in globalization. By maintaining or resurrecting barriers to globalization through protective economic measures such as tariff and nontariff barriers, capital controls, or other national regulatory measures in the domains of transport, communications, and information, defensive intervention would in principle return internal sovereignty to the national government. This, in turn, would force companies to reorganize along national lines, much as they did before they adopted global strategies†¦ An alternative strategy to defensive intervention is offensive intervention. Here countries themselves become global competitors, striving to provide the most attractive environment possible for the strategies of global companies within their own territorial boundaries, or to lobby other countries on behalf of their domestic corporations in support of their overseas strategies† (Reinicke1998, p. 83)   A number of measures can be of use   with the latter type   such as   cutting taxes to attract I capitals flow, subsidies, aggressive export promotion campaigns. Corruption , bribery are not   underestimated in this case. Finally, Reinicke suggests   in his opinion the most   effective strategy, that of a global public policy. â€Å"Global public policy differs from both interventionist strategies in that it reverses the adjustment path between the two geographies by realigning the political with the economic geography. Rather than trying to force the economic geography of globalization to adjust to the political geography of interdependence, global public policy alters the political geography in a way that can both accommodate economic globalization and at the same time allow countries to continue to exercise internal sovereignty. Under these circumstances, the reach and management of internal sovereignty are no longer defined by territoriality, but rather by the spatial extension of globalization, that is, on a functional or sectoral basis† (Reinicke1998, p.87). It is global public policy that need governance but does not need a global government. III. Conclusion In the modern world to ignore the phenomenon of globalisation   would not only be impossible but also dangerous. Elaboration of   the efficient strategies is necessary   to cope with the information gap, which is the main challenge to public policy conduction. Transnational corporations increasingly   take over the intranational legitimate organs and reduce the role of democracy and civil rights’ influence upon the course of events. Under these conditions a few approaches are possible, some of them presupposing artificial intervention and oppression to the current circumstances. The most productive way , however, is to eliminate the problematic disjuncture between political and economic geography is not by trying to update it but to create an entirely new system of governance, which can be called global public policy. Bibliography    Beeson, M.,Bellamy, A. 2003. ‘Globalisation, Security and International Order after 11 September’,The Australian Journal of Politics and History, vol. 49, no. 3, pp.339-340 Chanda, N. 2003, Coming Together: Globalisation means reconnecting the human community, Available at: http://yaleglobal.yale.edu/about/essay.jsp Ellwood, D.2002, ‘Americanisation or Globalisation? David Ellwood Argues That the Attempts of British Politicians to Copy an American Role Model Are Likely to Fail’,History Today, vol.52, no. 9 Globalization,2004, Available at: encyclopedia.thefreedictionary.com/globalization Goodhart, M.2002, ‘Democracy, Globalization and the Problem of the State’,Polity,vol.33,no.4, pp.527-528 Jhunjhunwala , B. 2004, ‘Alternative Globalization’, Addis Tribune, Available at:   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   http://yaleglobal.yale.edu/display.article?id=870 Kearney, A.T..2003, ‘Measuring Globalization: Whos Up, Whos Down’,Foreign Policy,60-61 McBride, S.(ed.).2000,Globalization and Its Discontents, Macmillan, Basingstoke Mittelman, J.2002, ‘Making Globalization Work for the Have Nots’,   International Journal on World Peace, vol. 19, no. 2, pp.3-4 Reinicke, W.1998,Global Public Policy: Governing without Government? The Brookings Institution, Washington, DC Shuja, S.2001, ‘Coping with Globalisation’,Contemporary Review, 279, no.1630, pp.257-258