Week 1 discussion

One of the more useful descriptions of globalization is offered

by the political scientist David Held, who identifies it as:

– “the stretching of social relations across space”

– “the intensification of flows and networks of interaction”

– “the increasing interpenetration of economic and social practices”

– “the emergence of a global institutional infrastructure”

Globalization as a process not a thing

Stretched social relations across space

The existence of cultural, economic and political networks of connection across the world

Time-space compression

Time-space compression: processes and

technologies (internet, airplanes, etc.) that reduce the significance of distance

and accelerate the experience of time

Reduced significance of distance

Accelerated experience of time

Russian foreign minister Sergei Lavrov and U.S. secretary of state John Kerry in Geneva September 12, 2013 discussing agreement on Syrian

chemical weapons

Stretched social and economic relations: Diasporic communities and remittances

Intensification of flows and networks of interaction

Increased interpenetration of

economic and social practices

Deepening of economic and social

practices and exchanges which

bring distant cultures, and markets together at the local level and

global stage

Political and social interpenetration: Otpor,

the Arab Spring and the Occupy

movements

Global infrastructure

1) Communications and transportation technologies and standards

2) The formal and informal institutions and political arrangements that facilitate the function of globalized processes

Political institutions and globalization

Post-WWII international finance and trade institutions

• Bretton Woods conference in July 1944 set up organizations to regulate international finance and trade following WWII– Participants: 44 allied countries

• Creates the International Bank for Reconstruction and Development (becomes World Bank) and IMF – Three years later the General Agreement on Tariffs and

Trade (GATT) negotiated (replaced by WTO in 1995)

• Underlying principles: Development through open markets; interdependent economies make war less likely; exchange rate stability to prevent sharp contractions in trade

World Trade Organization

– Founded in 1995 as successor to GATT, the WTO is a forum for negotiating, implementing and enforcing international trade agreements

– Binding and enforceable commitments to non-discriminatory trade practices

World Trade Organization

International Monetary Fund

– Large-scale lender of last resort for countries suffering from exchange rate and balance of payments problems

– Lending terms linked to implementation of macro-economic restructuring

International Monetary Fund

Structural adjustments and the ‘Washington Consensus’

1) Budget cuts2) Devaluation of

currencies3) Trade liberalization4) Ending price controls

or subsidies5) Privatization of state-

owned enterprises6) Tax reforms7) Deregulation

The World Bank

– Provides technical and financial assistance to developing countries for development projects (roads, dams, education, health care, etc.)

– Increasingly assistance is being linked to ‘good governance’ outcomes• Six indicators: Voice and accountability, political

instability and violence, government effectiveness, regulatory burden, rule of law, control of corruption

The World Bank

United Nations

United Nations

– Founded in 1945 as a replacement for the ineffective League of Nations; provides a forum for international cooperation and dialogue, and ratification of resolutions, concerning a host of political, economic, peace and security, legal, and humanitarian issues

Unevenness of globalization across and within countries

• Four key dimensions of globalization– Stretched social relations across space– Intensification of flows and networks of interaction– Increased interpenetration of economic and social life– Global infrastructure

• Globalization does not float in the ether…it is a set of processes that unevenly connects or binds together societies and places

So what’s new, what’s not, and why does it matter?

The increasing degree of globalism is what people are referring to when talking about

globalization

“Globalization is the process by which globalism becomes increasingly thick”

“Globalization and deglobalization refer to the increase or decline of globalism”

Need to distinguish globalization and globalism

So what is globalism?

Two dimensions:

“Globalism is a state of the world involving networks of interdependence at multicontinental distances. The linkages occur through flows and influences of capital and goods, information and

ideas, and people and forces, as well as environmentally and biologically relevant

substances (such as acid rain or pathogens).””

Multilateral networks of connections not single linkages

Relations of inter-

dependence among NATO members as an example

of military globalism

Multicontinental rather than regional

networks of interdependence

1) Economic

2) Military

3) Environmental

4) Social and cultural

Forms of globalism

Economic globalism

“Long distance flows of goods, services and capital… organization of processes that are linked to these flows”

Military globalism

“Long distance networks of interdependence in which force, and the threat or promise of force, are employed”

Environmental globalism

“Long distance transport of materials in the atmosphere or oceans, or of biological substances such as pathogens or genetic materials, that affect human health and wellbeing”

Social and cultural globalism

“The movement of ideas, information, images and people”

Variation in globalization and de-globalization trends among the four dimensions across time

Decrease in economic globalism accompanied by increase in military globalism in the years leading up

to WWII

Globalism as a phenomenon with ancient roots

“The issue is not how old globalism is, but rather how ‘thin’ or ‘thick’”

1) Density of networks

2) Increased institutional velocity (how rapidly a system and units within it change)

3) Increased transnational participation and complex interdependence

Present thickening of globalism as leading to changes in not just degree, but also kind:

Spread of the 2007-9 financial crisis across the globe

With increased velocity of flows and density of networks distant events are felt more strongly than before

Thickening globalism and increased uncertainty?

Globalization and complex interdependence as a challenge to the sovereign state system?

Complex interdependence:

“Multiple channels between societies, with multiple actors, not just states; multiple issues, not arranged in any clear hierarchy; the irrelevance of the threat of or use of force

among states linked by complex interdependence”

“Translated into the language of globalism, the politics of complex interdependence would be one in which levels of

economic, environmental and social globalism are high and military globalism is low”

Why are some countries rich and others poor?

a) Cultural explanations

b) Geographical explanations

c) Institutional explanations

1) Racist or ethnocentric

2) Gets causal relationships wrong—that is, what is seen as cultural practices are product of political institutions, incentives or historical legacies

3) Culture treated as fixed, which makes difficult to explain changes in countries’ economic fortunes, or variations in economic development among countries that putatively share cultural traits

Criticisms of cultural explanations

Geography

Jared Diamond’s “peanut butter

sandwich” map of poorer tropical

and richer temperate zone

countries in Africa

1. Geographical determinism that ignores or is incapable of explaining shifting fortunes over time

2. Difficulty in accounting for exceptions or divergences in countries with similar geographical features without reference to historical, cultural, or institutional factors

Criticisms of geographical explanations

“The reason that Nogales, Arizona, is much richer than Nogales, Sonora, is simple; it is because of the very

different institutions on the two sides of the border, which create very different incentives for the inhabitants of

Nogales, Arizona, versus Nogales, Sonora”

Institutions

Extractive economic institutions

Practices and policies “designed to extract incomes and wealth from one subset of

society [the masses] to benefit a different

subset [the governing elite]”

Inclusive economic institutions

“those that allow and encourage participation

by the great mass of people in economic activities that make

best use of their talents and skills and that

enable individuals to make the choices they

wish”

Inclusive versus extractive economic institutions

“While economic institutions are critical for determining whether a country is poor or

prosperous, it is politics and political institutions that determine what economic institutions a

country has”

The primary importance of political institutions

1) Political pluralism, where power rests with a broad coalition of society or variety of groups, rather than a narrow set of elites

2) Functional central state institutions which are capable of providing public goods, supporting property rights, and ensuring a transparent and fair legal process

Unlike geography and culture (as typically understood), institutions can change fairly rapidly, thus better at explaining

shifts in relative economic fortunes

A key strength of the institutional argument

Criticisms

Not a random distribution of inclusive institutions; broad pattern fits geographical explanations such as temperate

climates, navigable rivers and landlocked countries

“Why have some countries ended up with good institutions and

others haven’t? The most important factor behind their emergence is the historical

duration of centralized government”—Jared Diamond

“The persistence into the twentieth century of a specific institutional pattern inimical to growth in Mexico and Latin

America is well illustrated by the fact that, just as in the nineteenth century, the pattern generated economic

stagnation and political instability, civil wars and coups, as groups struggled for the benefits of power”—Acemoglu and

Robinson