Measuring Globalization
What is Globalization?
• Process by which the
people of the world are
unified into a single
society
• Integration of national
economies into the
international economy
through trade, foreign
direct investment, capital
flows, migration, and
spread of technology
History of Globalization
• The word "globalization" has been used by economists
since 1981.
• Various social scientists have tried to demonstrate
continuity between contemporary trends of globalization
and earlier periods.
• The first era of globalization (in the fullest sense) during
the 19th century was the rapid growth of international
trade between the European imperial powers, the
European colonies, and the United States.
• After World War II, globalization was restarted and was
driven by major advances in technology, which led to lower
trading costs.
Importance of Globalization
• The phenomena that is globalization is here
to stay and its impact will be felt for many
years to come.
• Due to the increasing integration of
economies, problems in one country could
have spill over effects on the global
economy
• Globalization indicates the health of a
country.
COMPONENTS OF
GLOBALIZATION
Component 1
• Broad Category: Information
• Instant dispersal of news by satellite TV,
Internet, fax (but what news and
whose?), telephone
• Competition is worldwide, not local or
national
• Very hard to keep a secret
Component 2
• Broad Category: Culture
• Increasingly a “global village,” but a
Western one watching the same TV,
music videos, news, soaps. Reaction to
this?
• Rise of a “global language.” Why?
Whose?
• Smaller cultures may feel threatened
Component 3
• Broad Category: Environment and
Health
• Global environmental problems (Ozone,
global “warming,” sea-level change
• AIDS, Ebola, ??
• Global plunder of common pool
resources—ocean, forests…..
Component 4
• Broad Category: Crime and Terrorism
• “International” crime, Russian Mafia
• Terrorists in caves in Afghanistan
threaten lower Manhattan
• International crime does not play by the
rules of “states,” and may be better
organized than some, and “own” others.
MEASURING
GLOBALIZATION
Criteria For Measuring Globalization
• Political Engagement
• Personal Contact
• Technological Connectivity
• Economic Integration
Political Engagement
• Foreign aid, treaties,
organizations and
peacekeeping
Personal Contact
• Including telephone
calls, travel, and
remittances.
Technological Connectivity
• Number of internet
users, hosts, and
secure servers
Economic Integration
• International trade
and foreign direct
investment
How is the Ranking Determined
• Within each categories
(Political Engagement,
Personal Contact,
Technological Connectivity
and Economic Integration)
you are given a rank.
• The overall score determines
how high you rank.
Ranking of Countries
The index tracks changes across 62 advanced economies and
key emerging markets to draw a picture of globalization across
all the world’s region.
The Global Top 20 in 2010
Conclusion
• U.S. can improve on their ranking.
• Small countries does not mean less globalized.
Recapping- Globalization
To Recap: Globalization…
• is driven by technology;
• is seen as threatening cultures because
it is equated with Westernization;
• increases the pace at which everything
happens: capital transfers, spread of
disease, change of culture;
• may be changing our global
environment.