Globalization Effect on Policy Making


Globalization has a deep impact on the policy making process of a government which is manifested in the decisional, institutional, distributional and structural aspects of the policy making process.

Decisional Aspect of Government Policy
First, the decisional aspect of government policy is affected since government has to absorb the changes to relative cost and benefits of different macroeconomic, industrial and sectoral policies.  

Institutional Aspect of Government Policy
Second, as regard the institutional aspect of government policy, the government has to take initiatives for an institutional reform to improve global competitiveness of the economy. It has to take into account the growth of global production network, multilateral economic surveillance and regulations.

Distributional Aspect of Government Policy
Third, the distributional aspect of government policy is also influenced with the emergence of globalization, since the government's policy making process is now much influenced by the global division of labor and wage competition across the economies. In this connection, negotiations over tradable and non-tradable sectors and benefits of skilled and unskilled labor forces are prime agenda for government policies.

structural aspects of government Policy
Four, as regard the structural aspects of government policy, globalization also brings some structural changes in the national economy since the government has to cope with the altering balance of power between the state and markets. Identifying the country's comparative advantage and areas of trade specialization figure high in the prime agenda for government policies in a globalized world.

Saturday, 08th Jul 2017, 07:17:48 PM

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