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globalization

Of globalization’s promises and perils

Swati Mishra's picture

As a student in 2003, I had an opportunity to interview a social activist about food security in India. Among other things, she blamed globalization for the slow demise of the local food industry. She went a step further and labeled globalization as depriving people (small scale farmers and workers) of their livelihoods. Her solution for India to become a leader in the food industry was by staying local, small, and forming cooperatives rather than fostering large agribusiness. This was quite a contrasting view at a time when India was starting to see benefits from its economic liberalization. In retrospect, I was interviewing someone who was ahead of a trend where activists were increasingly wary about the downsides of globalization and its impact on development.

Since then, globalization has sped up and contentious debates over who ultimately benefits have grown. And just as finance ministers from various countries were converging on Washington to discuss vital issues like extreme poverty, global macroeconomic prospects, jobs creation, and inclusive growth, revisiting globalization seemed germane to tackling development challenges.

Trade: The World Is Not Flat Yet

Otaviano Canuto's picture

Thomas Friedman’s bestseller The World Is Flat highlights the strong forces pushing the world towards a single economic platform. The technology-fueled globalization in the provision of services, and the widespread organization of production processes as global value chains are part of his narrative.

The Real Winners and Losers of Globalization

Branko Milanovic's picture

It is generally thought that two groups are the big winners of the past two decades of globalization: the very rich, and the middle classes of emerging market economies.

The statistical evidence for this has been cobbled together from a number of disparate sources. The evidence includes high GDP growth in emerging market economies, strong income gains recorded for those at the top of the income pyramid in the United States and other advanced economies, as well as what seems to be the emergence of “a global middle class” and casual observations of the rising affluence of Chinese and Indians.

Financial Globalization in Emerging Countries: Diversification vs. Offshoring

Sergio Schmukler's picture

Starting in the early 1990s many emerging economies have embraced financial sector reforms and liberalization. As a consequence, they have become more financial globalized, triggering an important debate about the pros and cons of this process and its relation to financial crises. Notwithstanding all the attention, there are different dimensions of globalization, which are many times not clearly defined and which might add noise to the discussion.

In a recent World Bank policy research working paper and VoxEU column, we argue that there are at least two interconnected, albeit essentially distinct facets of financial globalization. The first one is financial diversification, that is, the cross-country holdings of foreign assets and liabilities. The second one is financial offshoring, that is, the use of foreign jurisdictions to conduct financial transactions. While the former focuses on who holds the assets, the latter deals with where the assets are transacted.

Globalization and the Gender Earnings Gap in the Apparel Industry

Gladys Lopez-Acevedo's picture

The 2012 World Development Report, Gender Equality and Development, argues that gender equality “contributes to economic efficiency and the achievement of other key development outcomes.”  U.S. Secretary of State Hillary Clinton stated at the APEC Women and the Economy Summit that “the increase in employment of women in developed countries during the past decade has added more to global growth than China has, ” and argued that incorporating women into the formal workforce is critical for economic progress.  Understanding how major policy changes affect women’s employment and the gender wage gap is therefore critical for implementing future policies that may affect women’s status and opportunities.

What Will South Asia Look Like in 2025?

Ejaz Ghani's picture

South Asia is among the fastest growing regions in the world, but it is also home to the largest concentration of people living in conditions of debilitating poverty, human misery, gender disparities, and conflict. In my book, Reshaping Tomorrow, I ask if South Asia is Ready for the Big Leap. 

The optimistic view is that India will achieve double-digit growth rates benefitting the rest of South Asia. The pessimistic view is that growth will be derailed by structural and transformational challenges. Which of these two outlooks will prevail?

The Optimistic Outlook

The optimistic outlook is based on favorable trends, including improved governance, the demographic dividend, the rise of the middle class, and the new faces of globalization. 

All countries in the region have an elected government for the first time since independence leading to governance that is more focused on development. Improved governance will enhance the politics of democratic accountability; diminishing the importance of identity politics; and the rates of incumbency – the likelihood of a sitting politician being re-elected – are down.

Negotiating Globally

Maya Brahmam's picture

Just last week, I attended a presentation on negotiation by Chris Voss, CEO of Black Swan, at Georgetown University.  It was particularly interesting because Chris was also one of the top hostage negotiators for the FBI.

Negotiation is increasingly important because with the spread of globalization, we are constantly colliding with others who may or may not share our cultural mores, and to be successful in our jobs, whether it is working with parties on governance and accountability, consulting with civil society, or communicating around a project, we have to understand how to negotiate globally.

Is There a Global Public Sphere?

Sina Odugbemi's picture

One of the ways in which the world we live in today feels very different from the one we lived in even a decade ago is how ‘connected’ we all feel these days. It does seem that there are issues that we all talk about, personages and celebrities that we all know, and technological means of information sharing and exchange that we all share.  Yet, can we say that one of the consequences of globalization is that we now have a global public sphere, especially now that Fareed Zakaria of CNN calls his talk show ‘The Global Public Square’?

You will recall that a public sphere is a metaphor for a space that still exists in some contexts: the village square, the town hall… a place where people come together to talk about common concerns, a process that leads to the crystallization of public opinion.  Beyond the level of the village or the small town --- situations where most inhabitants can conceivably gather and talk – the public sphere becomes a grand metaphor, but a useful one. As Denis McQuail asserts in his classic text on communication theory, in most national contests today the ‘media are now probably the key institution of the public sphere, and its “quality” will depend on the quality of the media’. [See McQuail’s Mass Communication Theory, Fifth Edition, page 566.]

The Unfinished Global Revolution: Book Review

Caroline Jaine's picture

When I first met Mark Malloch-Brown several years ago, he was a newly ennobled peer and part of the Gordon Brown lead British Government, serving as a Foreign Minister. Wearing the ermine of a Lord together with his Make Poverty History wrist-band, Malloch-Brown was a figure of both rebellion and conformity.  Given his outspoken stance on the war in Iraq and his uneasy relationship with America’s neo-cons, I wondered then whether he would be forced to compromise on his principles.

His latest offering to the world is certainly no compromise.  In The Unfinished Global Revolution, as the title suggests is all to aware that it is written at a time of immense change, less at the cusp of revolution – more in the thick of it.

This is a book about Malloch-Brown’s personal journey, and whilst the writer candidly shares remarkable anecdotes, he also offers unique insight into some of the world’s most challenging conflicts and commentary from inside both government and international organisations.  Ultimately, however, true to character, this reads as a call to action.  As he writes: We need to get on with it!

Development economics thinks big but also gets practical—postcard from Paris

Justin Yifu Lin's picture

ABCDE 2011, Paris. Photo: OECD
Development is about big systemic changes, complex tradeoffs, political choices and how the fruits of growth are channeled for the greater good. It is also about broadening opportunities – a goal that if neglected can result in frustrated citizens and tumult as we have seen in the North Africa and Middle East.

These were some of the many messages I took away from the ABCDE conference just held in Paris.

Development economics thinks big but also gets practical—postcard from Paris

Justin Yifu Lin's picture

ABCDE 2011, Paris. Photo: OECD
Development is about big systemic changes, complex tradeoffs, political choices and how the fruits of growth are channeled for the greater good. It is also about broadening opportunities – a goal that if neglected can result in frustrated citizens and tumult as we have seen in the North Africa and Middle East.

These were some of the many messages I took away from the ABCDE conference just held in Paris.

The Warsaw Initiative

Grzegorz W. Kolodko's picture

Old square surrounding Zamkowy Statue in Warsaw, Poland. Photo: Istockphoto.comThrough its forthcoming European Union presidency Poland should inspire other regions of the world that seek their own development path. By no means do current turbulences and crisis disturbances shatter the need of European integration. Just the opposite, they make it stronger. European integration works and will get through this confusion.

Growth and Development Nuts and Bolts for the G-20

Shahrokh Fardoust's picture
 Photo: Istcokphoto.com

In the wake of the 2008 global financial crisis, many observers thought that the G-20 had a chance to succeed in the development arena where the G-8 foundered. Expectations were high that the G-20’s wider legitimacy and fresh remit would result in breakthrough solutions to knotty problems, from health pandemics to global warming. Yet the reality was that the G-20 Working Group on Development was pragmatic and selected a somewhat narrower range of priorities to focus on and many of the issues were ones that grew out of regional or national priorities. That is how the real world works—by consensus and stakeholder collaboration.

At the book launch for Postcrisis Growth and Development: A Development Agenda for the G-20, Moisés Naím and Arvind Subramanian, both astute observers of trends in globalization, expressed disappointment that the G-20 development agenda didn't devote more energy to big ‘global public goods’ issues. Moreover, they noted a failure to grapple with the biggest risks facing the development community, such as illicit financial flows or climate change.

Trade, Employment, and Structural Transformation

Margaret McMillan's picture
  Photo: istockphoto.com

There is a shared sense that globalization has a strong potential to contribute to growth and poverty alleviation.  There are several examples of countries in which integration into the world economy was followed by strong growth and a reduction of poverty, but evidence also indicates that trade opening does not automatically engender growth. The question therefore arises, why the effects of globalization have been so different among countries of the world.

A look at changes in the structure of employment in Latin America and in Asia hints at possible explanations for observed differences in the growth effects of trade.  Since the 1980s, Asia and Latin America have both rapidly integrated into the world economy.  Asia has enjoyed rapid employment and productivity growth, but the consequences for Latin America have been less stellar.

The chart below shows how the pattern of structural change has differed in the two continents. The chart decomposes labor productivity growth in the two regions into three components: (i) a “within” component that is the weighted average of labor productivity growth in each sector of the economy; (ii) a “between” component that captures economy-wide gains (or losses) from the reallocation of labor between sectors with differing levels of labor productivity; and (iii) a “cross” component that measures the gains (or losses) from the reallocation of labor to sectors with above-average (below-average) productivity growth.  The underlying data for the charts come from the Groningen Growth and Development Centre.


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