The Contemporary World

Unit 2 : The
Structures of
Globalization
Unit 2 : The Structures of
Globalization
According to WHO globalization can be defined as
” the increased interconnectedness and
interdependence of peoples and countries. It is
generally understood to include two inter-related
elements: the opening of international borders to
increasingly fast flows of goods, services, finance,
people and ideas; and the changes in institutions
and policies at national and international levels
that facilitate or promote such flows.”
Economic Political
Structure Structure
According to the Committee for Development Policy (a
subsidiary body of the United Nations), from an economic
point of view, globalization can be defined as:
“(…) the increasing interdependence of world economies
as a result of the growing scale of cross-border trade of
commodities and services, the flow of international capital
and the wide and rapid spread of technologies. It reflects
the continuing expansion and mutual integration of
market frontiers (…) and the rapid growing significance of
information in all types of productive activities and
marketization are the two major driving forces for
economic globalization.”
 Economic globalization, broadly
understood, is the growing global
integration not only of markets but also of
systems of finance, commerce,
communication, technology, and law that
bypass traditional national, cultural, ethnic,
and social boundaries.
https://www.uua.org/action/statements/economic-globalization
[e]conomic globalization is a historical process, the
result of human innovation and technological
progress. It refers to the increasing integration of
economies around the world, particularly through
the movement of goods, services, and capital
across borders. The term sometimes also refers to
the movement of people (labor) and knowledge
(technology) across international borders. (IMF,
2008)
Several interconnected dimensions

a. Globalization of trade of goods and services

b. Globalization of financial and capital markets
c. Globalization of technology and
communication
d. Globalization of production
‘In economic terms globalisation is nothing but a
process making the world economy an “organic
system” by extending transnational economic
processes and economic relations to more and
more countries and by deepening the economic
interdependencies among them.’ (Szentes, 2003)
Proponents:
Efficient division of labor
Greater division of labor
Increased productivity
Higher standards of
living and wealth
End of poverty
Opponents:
Detaches markets from
essential regulations
meant to protect national
sovereignty, democratic
process, human rights,
labor rights and the
environment.
• G20 – represents “political
backbone of the global
financial architecture that
secures open markets, orderly
capital flows, and a safety net
for countries in difficulty”,
 • International
trading system
FACTORS THAT GAVE • Global
RISE TO THE corporations
CONTEMPORARY
ECONOMIC • Multilateral
GLOBALIZATION financial
institutions

• Neoliberalism
Global Corporations

 International companies are importers and exporters, typically without investment

outside of their home country;
 Multinational companies have investment in other countries, but do not have
coordinated product offerings in each country. They are more focused on
adapting their products and services to each individual local market.
 Global companies have invested in and are present in many countries. They
typically market their products and services to each individual local market.
 Transnational companies are more complex organizations which have invested in
foreign operations, have a central corporate facility but give decision-making,
research and develop (R&D) and marketing powers to each individual foreign
market.
The theory originated with sociologist
Immanuel Wallerstein, who suggests that the
way a country is integrated into the capitalist
world system determines how economic
development takes place in that country.

• the world economic system is divided

into a hierarchy of three types of
countries: core, semiperipheral, and
peripheral.
• Core countries (e.g., U.S., Japan, Germany) are dominant,
capitalist countries characterized by high levels of
industrialization and urbanization. Core countries are
capital intensive, have high wages and high technology
production patterns and lower amounts of labor
exploitation and coercion.

• Peripheral countries (e.g., most African countries

and low income countries in South America) are
dependent on core countries for capital and are
less industrialized and urbanized. Peripheral
countries are usually agrarian, have low literacy
rates and lack consistent Internet access.

• Semi-peripheral countries (e.g., South Korea,

Taiwan, Mexico, Brazil, India, Nigeria, South
Africa) are less developed than core nations
but more developed than peripheral nations.
They are the buffer between core and
peripheral countries.
• ideology and policy model that emphasizes the value of free market competition.
• often characterized in terms of its belief in sustained economic growth as the
means to achieve human progress, its confidence in free markets as the most-
efficient allocation of resources, its emphasis on minimal state intervention in
economic and social affairs, and its commitment to the freedom of trade and
capital.
• By the 1970s, however, economic stagnation and increasing public
debt prompted some economists to advocate a return to classical liberalism,
which in its revived form came to be known as neoliberalism.
• The intellectual foundations of that revival were
primarily the work of the Austrian-born British
economist Friedrich von Hayek, who argued that
interventionist measures aimed at the redistribution
of wealth lead inevitably to totalitarianism, and of
the American economist Milton Friedman, who
rejected government fiscal policy as a means of
influencing the business cycle.

• As national economies became more

interdependent in the new era of
economic globalization, neoliberals also
promoted free-trade policies and the free movement
of international capital.
Political Structure
• Global Interstate System
• Internationalism
• International Organizations
The Attributes of Today’s Global System

1. Countries and states are independent and govern themselves;

2. These countries interact with each other through diplomacy;
3. International organizations facilitates these interactions; and
4. International organizations also take lives on their own.
What is a state?
• The state is a form of human
association distinguished from
other social groups by its purpose,
the establishment of order and
security; its methods, the laws and
their enforcement; its territory,
the area of jurisdiction or
geographic boundaries; and finally
by its sovereignty.
Interstate
This is a system of recognizing the
interdependence and sovereignty
of countries
The idea of a ‘system’ requires the
existence of units, among which
interactions take place. In the
interstate system, the units are the
states, and the interactions include
war, diplomacy and cooperation
 Results:
It ended the 30 Years War (1618-1648) in
the Holy Roman Empire and the Eighty
Years’ War (1568 – 1648) between Spain
and the Dutch Republic, with the Spain
formally recognizing the independence of
the Dutch Republic.
Under the terms of peace settlement, a
number of countries received territories or
were confirmed in their sovereignty over
Treaty of Westphalia territories
Results: Five Principle in Politics

1. The principle of state sovereignty

2. The principle of legal (equality) of states
3. The principle of non-intervention of one
states in international affairs of another
4. International law and diplomacy
5. Reason of state replaced religion
Concert of Europe: Also known as the Congress System or the Vienna System after the Congress of
Vienna, a system of dispute resolution adopted by the major conservative powers of Europe to
maintain their power, oppose revolutionary movements, weaken the forces of nationalism, and uphold
the balance of power. • As the four major European powers (Britain,
Prussia, Russia, and Austria) opposing the French
Empire in the Napoleonic Wars saw Napoleon’s
power collapsing in 1814, they started planning for
the postwar world.
• The Congress of Vienna was the first of a
series of international meetings that came to
be known as the Concert of Europe, an
attempt to forge a peaceful balance of
power in Europe.
• It served as a model for later organizations
such as the League of Nations in 1919 and
the United Nations in 1945.
• This refers to the desire of countries for greater cooperation

Some of the proponents of this belief:

 Immanuel Kant
 Jeremy Bentham
 Karl Marx
 Woodrow Wilson
 Immanuel Kant
• There is a necessity to establish a global government
because otherwise international system would be a disaster.

Jeremy Bentham
• “The necessity for war no longer follows from a different
opinion.”
• He assumes that global peace can be achieved supposing
there will be an international community governed by law.
 Karl Marx
• The need for internationalism flows from the position of the working
class internationally.
• The interests of the working class of one country are the same as the
interests of the workers of the other countries. Because of the division
of labor established by capitalism, the basis is laid for a new
international organization of labor and planned production on a world
scale.

Woodrow Wilson (U.S president who advocated the League of Nations)

• Principle of Self-determination –the belief that the world’s nation had
a right to a free, and sovereign government. He hoped that these
free nations would become democracies, because only by begin
such would they be able to build a free system of international
relations based on international law and cooperation.
The League of Nations was an international
diplomatic group developed after World War I as
a way to solve disputes between countries
before they erupted into open warfare. A
precursor to the United Nations, the League
achieved some victories but had a mixed record
of success, sometimes putting self-interest
before becoming involved with conflict
resolution, while involved with conflict resolution,
while also contending with governments that did
not recognize its authority.
• Due to the powers vested in its Charter and its unique
international character, the United Nations can take
action on the issues confronting humanity in the 21st
century, such as peace and security, climate change,
sustainable development, human rights,
disarmament, terrorism, humanitarian and health
emergencies, gender equality, governance, food
production, and more.
• The UN also provides a forum for its members to
express their views in the General Assembly, the
Security Council, the Economic and Social Council,
and other bodies and committees. By enabling
dialogue between its members, and by hosting
negotiations, the Organization has become a
mechanism for governments to find areas of
agreement and solve problems together.
The World Trade Organization (WTO)
is the only global international
organization dealing with the rules of
trade between nations. At its heart are
the WTO agreements, negotiated and
signed by the bulk of the world’s
trading nations and ratified in their Geneva, Switzerland
parliaments. The goal is to ensure that
trade flows as smoothly, predictably
and freely as possible.
The Bank Group works with country governments,
the private sector, civil society organizations,
regional development banks, think tanks, and other
international institutions on issues ranging from
climate change, conflict, and food security to
education, agriculture, finance, and trade. All of
these efforts support the Bank Group’s twin goals of Washington D.C, United States
ending extreme poverty by 2030 and boosting
shared prosperity of the poorest 40 percent of the
population in all countries.
 How IMF Capacity Development Benefits
Countries
It helps raise public revenues so
governments can provide better services
for their people — such as schools, roads
Strengthening the capacity of economic institutions, such and hospitals.
as central banks and finance ministries, results in more
effective policies that lead to greater economic stability It helps create a stable economic and
and growth. monetary ecosystem — e.g. efficient
tax structures, sustainable debt, reliable
The IMF’s capacity development efforts are also data, sound regulatory framework —
focused on helping member countries tackle which enables transparency, stimulates
development priorities — such as income inequality, private sector development and leads to
corruption, climate change and gender inequality — greater and more equitable economic
helping them make progress toward the Sustainable growth.
Development Goals (SDGs).
Washington D.C, United States
The driving forces for the ILO's creation arose from
security, humanitarian, political and economic
considerations. The founders of the ILO recognized
the importance of social justice in securing peace,
against a background of the exploitation of workers in
the industrializing nations of that time. There was also
increasing understanding of the world's economic
interdependence and the need for cooperation to Geneva, Switzerland
obtain similarity of working conditions in countries
competing for markets.
 Rome, Italy
The Food and Agriculture Organization (FAO) is a specialized agency of the
United Nations that leads international efforts to defeat hunger.
Our goal is to achieve food security for all and make sure that people have regular
access to enough high-quality food to lead active, healthy lives. With over 194
member states, FAO works in over 130 countries worldwide. We believe that
everyone can play a part in ending hunger.
WHO works worldwide to promote health,
keep the world safe, and serve the vulnerable.

Our goal is to ensure that a billion more

people have universal health coverage, to
protect a billion more people from health
emergencies, and provide a further billion Geneva, Switzerland
people with better health and well-being.
 IFC—a sister organization of the World Bank and member of the World
Bank Group—is the largest global development institution focused on
the private sector in developing countries. The Bank Group has set
two goals for the world to achieve by 2030: end extreme poverty and
promote shared prosperity in every country.

We leverage our products and services—as well as

products and services of other institutions across the
World Bank Group—to create markets that address
the biggest development challenges of our time. We
apply our financial resources, technical expertise,
global experience, and innovative thinking to help our
clients and partners overcome financial, operational,
and other challenges.
Washington D.C, United States
 The Multilateral Investment Guarantee Agency (MIGA) is a
member of the World Bank Group. Our mandate is to
promote cross-border investment in developing countries
by providing guarantees (political risk insurance and credit
enhancement) to investors and lenders.

Our guarantees protect investments

against noncommercial risks and can help
investors obtain access to funding sources
with improved financial terms and
conditions. The Agency derives its unique
strength from the World Bank Group and
from its structure as an international
organization whose shareholders include Washington D.C, United States
most countries of the world.
ICSID is the world’s leading institution
devoted to international investment dispute
settlement. It has extensive experience in this
field, having administered the majority of all
international investment cases. States have
agreed on ICSID as a forum for investor-State
dispute settlement in most international
investment treaties and in numerous
investment laws and contracts. Washington D.C, United States
 The Organisation for Economic Co-operation and
Development (OECD) is an international organisation that
works to build better policies for better lives..

Together with governments, policy makers and citizens,

we work on establishing evidence-based international
standards and finding solutions to a range of social,
economic and environmental challenges. From
improving economic performance and creating jobs to
fostering strong education and fighting international tax
evasion, we provide a unique forum and knowledge
hub for data and analysis, exchange of experiences,
best-practice sharing, and advice on public policies Paris, France
and international standard-setting
 The International Trade Centre (ITC) (French: Centre du
commerce international (CCI)) is a multilateral agency which
has a joint mandate with the World Trade Organization (WTO)
and the United Nations (UN) through the United Nations
Conference on Trade and Development (UNCTAD).

•Strengthening the integration of the business

sector of developing countries and economies in
transition into the global economy,
•Improving the performance of trade and
investment support institutions for the benefit
of SMEs, and enhancing the abilities of trade
support institutions to better support them
•Improving the international competitiveness of
SMEs. Geneva, Switzerland
United Nations Conference on Trade and Development is the part of the United Nations
Secretariat dealing with trade, investment, and development issues. The organization's
goals are to: "maximize the trade, investment and development opportunities
of developing countries and assist them in their efforts to integrate into the world
economy on an equitable basis". UNCTAD was established by the United Nations
General Assembly in 1964 and it reports to the UN General Assembly and United Nations
Economic and Social Council.[1]

The primary objective of UNCTAD is to formulate policies relating to all aspects of

development including trade, aid, transport, finance and technology. The conference
ordinarily meets once in four years; the permanent secretariat is in Geneva.
 Nairobi, Kenya
The United Nations Environment Programme (UNEP) is the leading global
environmental authority that sets the global environmental agenda, promotes the
coherent implementation of the environmental dimension of sustainable development
within the United Nations system, and serves as an authoritative advocate for the
global environment.
 Brussels, Belgium
The World Customs Organization (WCO), established in 1952 as the Customs Co-operation Council
(CCC) is an independent intergovernmental body whose mission is to enhance the effectiveness and
efficiency of Customs administrations.
Today, the WCO represents 183 Customs administrations across the globe that collectively process
approximately 98% of world trade. As the global centre of Customs expertise, the WCO is the only
international organization with competence in Customs matters and can rightly call itself the voice of the
international Customs community.
 WIPO is the global forum for intellectual property (IP) services,
policy, information and cooperation. We are a self-funding agency
of the United Nations, with 193 member states.

Its mission is to lead the development of a

balanced and effective international IP system
that enables innovation and creativity for the
benefit of all. Their mandate, governing bodies
and procedures are set out in the WIPO
Convention, which established WIPO in 1967. Geneva, Switzerland