Outcome of Globalization


Benefits -

Globalization has generated a wide range of benefits including –
- greater freedom of choice,
- lower prices of goods and
- higher income for individuals.
 At the aggregate level, these have been paralleled by a –
- more productive allocation of resources,
- enhanced specialization,
- diversification of risks and
- investment in areas of highest returns.

People and Countries excluded from Globalisation
This is not to say that globalization ensures prosperity for everyone. Indeed, given the asymmetrical nature of the process, a significant proportion of people and countries continue to remain excluded from the rewards of globalization. The exclusionary process has been underpinned by lack of assets, incomes and capabilities on the part of these marginalized people and countries. No wonder that export-oriented (i.e. globalization driven) growth in many countries has been coupled with further deterioration of income disparity. In fact, most recent econometric work based on cross-country and time series data has failed to establish any correlation between rates of poverty reduction and expanding trade volumes.
Thus, it becomes imperative for the government in the developing countries to take measures at two levels:
first, for a more effective and balanced integration of their respective economies in the global economy and,
second, to ensure a more equitable distribution of gains emerging from this integration among its citizens.

The current imbalance which we observe in the globalization process may be explained to a large extent by the rules of the game which are perversely set at the global level. Thus we observe that flows of commodities and capital are totally free, while movement of labor remains highly restricted. Similarly, while life-saving drugs are patented, traditional knowledge of developing countries does not enjoy any legal protection. As was mentioned earlier, the benefits have been disproportionately captured by rich countries and powerful transnational companies, while poor countries and poor people have been left behind. The gap between winners and losers is widening at an alarming rate.

Such a situation has led to a call for instituting a more accountable and inclusive globalization by way of reforming, among others, the multilateral institutions which set the rules concerning governance of globalization. The protagonists of globalization contend that the uneven progress of human welfare results not from failures of the globalized markets, but from failures of politics and policies. However, critiques of revealed globalization have convincingly argued that; similar to national economies, serious and extensive market failures afflict the global economy, and these call for provision of global public goods through collective actions at the global level

In fine, apart from some marginal groups in the fringe, the "mainstream dissenters" of globalization are not advocating against globalization per se, rather urging for proactive policies which can facilitate accelerated and beneficial integration of the marginalized people and countries in the fast changing global economy. In this sense, a more balanced and equitable globalization is being considered as a powerful means in achieving sustainable development.

Saturday, 08th Jul 2017, 12:52:31 PM

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