Explain the economic consequences of globalisation. from Politica (2024)

FAQs

What are the economic consequences of globalisation in political science? ›

In general, globalization decreases the cost of manufacturing. This means that companies can offer goods at a lower price to consumers. The average cost of goods is a key aspect that contributes to increases in the standard of living.

World gross domestic product (GDP) growth increased from around 2% per year in the 1970s to 4% per year before the global financial crisis. Globalisation helped to lift a billion people from extreme poverty and improved the lives of billions more. The United States also gained an estimated 11%–19% of its annual GDP.

Effects of globalisation on politics

In addition, it limits states' intervention in aspects such as trade and forces them to follow certain fiscal policies which may not be totally beneficial in order to maintain competitiveness and investments in a globalised world.

In addition to increasing greenhouse gas emissions, globalization has caused many animals' natural habitats to fall victim to increased farming, ranching, fishing, and other economic activities.

"Globalization and International Political Economy" examines processes of globalizing capitalism and the complex politics that are emerging from it—processes and struggles that will determine the shape of our world in the 21st century.

They concluded that since 1980, globalization has contributed to a reduction in poverty as well as a reduction in global income inequality. They found that in "globalizing" countries in the developing world, income per person grew three-and-a-half times faster than in "non-globalizing" countries, during the 1990s.

Globalization has also made it easier for people to access foreign goods and services, and has increased cultural exchange. On the negative side, globalization can lead to job losses and displacement as businesses relocate operations abroad or outsource labor, increased inequality, and environmental degradation.

Globalization effects on culture include disintegration of cultural diversity. It also leads to the migration of people across the world. Economic impacts include growth in economy and reduction of poverty levels.

Political globalization creates a norm and standard across countries that have interrelations with one another. These accepted norms and standards create international governing organizations like the United Nations, World Trade Organization, and North Atlantic Treaty Organization.

Increased greenhouse gas emissions, ocean acidification, deforestation (and other forms of habitat loss or destruction), climate change, and the introduction of invasive species all work to reduce biodiversity around the globe.

What are the 7 disadvantages of globalization? ›

Potential disadvantages of globalization for world economies include possible monopolization, structural unemployment, inter-dependence and tax avoidance. 5. Potential disadvantages of globalization for individual businesses include compliance, control and inadequate market knowledge. 6.

Globalization and Political Sovereignty

Globalization has led to a decline in the power of national governments to direct and influence their economies (especially with regard to macroeconomic management); and to determine their political structures.

For businesses, the advantages of globalization can include cost savings, international recruitment, specific market opportunities, and the spreading of risk. 4. Potential disadvantages of globalization for world economies include possible monopolization, structural unemployment, inter-dependence and tax avoidance.

Free trade agreements, such as the North American Free Trade Agreement and the Trans-Pacific Partnership, are examples of economic globalization. Multinational corporations, which operate in two or more countries, play a large role in economic globalization.

Economic globalization involves trade in goods and services, capital flows and trade in assets (e.g., currency, stocks), the transfer of technology and ideas, and international flows of labor or migration.