GEC 3 - Week 2

THE GLOBAL
STRUCTURES OF
GLOBALIZATION
LESSON 2
GLOBAL ECONOMY
ECONOMIC GLOBALIZATION
According to Sugden and Wilson (2005), is the expansion of national economies, the
global market driven by modern technology and institutional set ups that promote faster and
easier flow of goods and capital.
For Sangquan (2001), economic globalization is driven by the “growing scale of cross-
border trade of commodities and services.” Critical to economic globalization is global
economic integration.
The process of global economic integration is not a modern phenomenon. The

voyages of earlier explorers including the formation of empire were critical in intercontinental
trade and were also a precursor of modern economic globalization. . Chinese, and even
earlier, trades in Asia also serve as first-forms of economic expansion and later integration.
ACTORS WHO FACILITATES ECONOMIC GLOBALIZATION
First are international economic organizations such as the International Monetary
Fund (IMF), World Bank, and Organization for Economic Cooperation and Development
(OECD). These organizations are critical in developing and pushing for neoliberal policies
among different countries. They also help facilitate trade and development discussions
among various states.
Second are multinational companies (MNCs), which are considered to be the main
carriers of economic globalization. In 1996, there were 44,000 MNCs in the world with
280,000 overseas subsidiaries and branch offices. In 2006, there were 88,000 MNCs
identified.
Lastly, is the global civil society as a major driver of economic globalization. It has
made its mark in global development arena particularly during the UN Conference on
Environment and Development in 1992. Global civil society seen as either composed of
individuals or groups of individuals disadvantaged by the effects of globalization of the world
economy, they protest and seek alternative to a new world order.
International Monetary Fund (IMF)
An organization consisting of member countries to promote international monetary

cooperation and exchange stability; to foster economic growth and high employment; and to
provide short-term financial assistance to countries to help ease balance of payments
adjustments.
International Financial Institutions (IFIs)
The generic name given to all financial institutions operating on an international level,
ranging from development banks, such as the World Bank and the European Bank for
Reconstruction and Development (EDB), and monetary authorities, such as the International
Monetary Fund.
Transnational Corporations
“Enterprise that engages in activities which add value (manufacturing, extraction,

services, marketing, etc.) in more than one country.
G8 and G20
The group of nations that serve as an advisory organization that discuss current
economic and political problems and transfer the ideas from the forum in national legislative
regulations.
WHAT IS THE MODERN WORLD SYSTEM?
For Immanuel Wallerstein, a world system constitutes a social system composed of
boundaries, structures, member groups, rules of legitimation, and coherence. World
economy, is divided into core states and peripheral areas including semi-peripherals.
According to the world-system theory, the peripherals are mostly where production or raw
materials are sourced out, while the semi-peripherals processed or distributed the products
to the core areas – sites of major demands for goods and services. There are significant and
meaningful movements of resources, products, people in different economies facilitated by
modern transport and communication.
GLOBAL INTERSTATE
SYSTEM
GLOBAL INTERSTATE SYSTEM
According to Chase-Dunn, it is “a system of unequally powerful and competing states

in which no single state is capable of imposing control on others. These states are in
interaction with one another in a set of shifting alliance and wars and changes in relative
power of states upsets any temporary set of alliances, leading to a restructuring of the
balance of power.”
It is an institutional arrangement of governance that addresses regional or globalized

issues that go beyond the scope of a nation-state.
EFFECTS OF GLOBALIZATION ON GOVERNMENTS
As the world becomes more interconnected through politics, trade, and

communications, the role of nation-states and government are also shifting. Thus, national
and local policies are not only based on local context but also international and global
realities.
However, there is another side of globalization that negatively affects local

governments and local communities. A local government would like to attract major global
investors in their community by setting up for instance their manufacturing firm in the area.
This could create jobs for the local people and generate income for local businesses.
However, it entails converting tracks of agricultural land into an industrial zone. Framers will
be displaced, and agricultural production of the area will be affected. The global corporation
is also demanding lower taxes and lower income wage in order to finalize their investment in
the area.
INSTITUTIONS THAT GOVERN GLOBALIZATION
With the growing globalization, the governance of global relations goes beyond
nation-state governments. Nation-state governments’ scale and scope are limited in
addressing regional and global issues like climate change, cybercrime, and global financial
crises. Works by authors like Dryzek (2012) and Castells (2008) show the growing emphasis on
the role of non-state actors in global governance. These non-state actors include NGOs,
advocacy networks, voluntary associations, and interest groups. Their congenial and more
approachable strategies appeal the community and even other state actors and has a
potential to organize across areas.
The shift of authority to actors above and below the state is termed as “glocalization”
or “internal globalization” Roudumetof (2005). As the role of the nation-state and
governments shifted, participation of these new actors has opened-up. (Boli & Thomas, 1999).
GLOBALISM AND INTERNATIONALISM
Internationalism is defined as political, economic, and cultural cooperation between nations,

while globalism is an ideology based on the belief that flow of people, goods, and information should
flow freely across national borders. Sargent (2008) argues that internationalism emphasizes diversity and
celebrates multiculturalism, while globalism focuses more on the economic aspect of the exchanges
among countries and societies.

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THE GLOBAL

The process of global economic integration is not a modern phenomenon. The

An organization consisting of member countries to promote international monetary

International Financial Institutions (IFIs)

“Enterprise that engages in activities which add value (manufacturing, extraction,

According to Chase-Dunn, it is “a system of unequally powerful and competing states

It is an institutional arrangement of governance that addresses regional or globalized

As the world becomes more interconnected through politics, trade, and

However, there is another side of globalization that negatively affects local

Internationalism is defined as political, economic, and cultural cooperation between nations,

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