Contemporary world

Questions: Globalisation Theories 

 
What three regions do World Systems Theories divide the world into? 
 Core countries
 Periphery countries
 Semi-periphery countries
 
 
What are the characteristics of the Core Countries? 
 Core countries includes areas like western Europe, and the united states
 This countries have a strong central government with enough tax to support
it.
 They are economically diversified, industrialized and relatively independent
of outside control.
 They have strong middle and working classes and focus on higher scope
production of material goods rather than raw materials.
 
Where are Peripheral countries located? 

 
 
What are some of the Semi-periphery Countries? 
 India
 brazil
 
 
What do Modernisation Theories suggest?
 All countries follow the similar path of development from traditional to a
modern society.
 
 
How do Dependency Theories explain why some countries have not developed to
become economically developed? 
Reading 1: What Caused Globalisation? 
 
https://www.economicshelp.org/blog/401/trade/what-caused-globalization/ 
 
 
Questions: What Caused Globalisation? 
What are the main causes of globalisation? 
1. Improved transport, making global travel easier. For example, there has
been a rapid growth in air travel, enabling greater movement of people and
goods across the globe.
2. Containerisation. From 1970, there was a rapid adoption of the steel
transport container. This reduced the costs of inter-modal transport, making
trade cheaper and more efficient.
3. Improved technology which makes it easier to communicate and share
information around the world. E.g. internet. For example, to work on
improvements on this website, I will go to a global online community, like
elance.com. There, people from any country can bid for the right to provide
a service. It means that I can often find people to do a job relatively cheaply
because labour costs are relatively lower in the Indian sub-continent.
4. Growth of multinational companies with a global presence in many
different economies.
5. Growth of global trading blocks which have reduced national barriers.
(e.g. European Union, NAFTA, ASEAN)
6. Reduced tariff barriers which encourage global trade. Often this has
occurred through the support of the WTO.
7. Firms exploiting gains from economies of scale to gain increased
specialisation. This is an essential feature of new trade theory.
8. Growth of global media.
9. Global trade cycle. Economic growth is global in nature. This means
countries are increasingly interconnected. (e.g. recession in one country
affects global trade and invariably causes an economic downturn in major
trading partners.)
10.Financial system increasingly global in nature. When US banks suffered
losses due to the sub-prime mortgage crisis, it affected all major banks in
other countries who had bought financial derivatives from US banks and
mortgage companies.
11.Improved mobility of capital.  In the past few decades, there has been a
general reduction in capital barriers, making it easier for capital to flow
between different economies. This has increased the ability for firms to
 receive finance. It has also increased the global interconnectedness of global
financial markets.
12. Increased mobility of labour. People are more willing to move between
different countries in search for work. Global trade remittances now play a
large role in transfers from developed countries to developing countries.
13.Internet. This enables firms to communicate on a global level, this may
overcome managerial diseconomies of scale. The firm may be able to get
cheaper supplies by dealing with a wider choice of firms. Consumers are
also able to order more goods online E.G. Dell Computers takes orders
online and can meet customer specifications.

 
Reading 2: Positive Impact of Globalisation 
https://www.bbc.co.uk/bitesize/guides/zxpn2p3/revision/4 
 
Questions: Positive Impact of Globalisation 
What are some advantages of globalisation? 

 Inward investment by TNCs helps countries by providing new jobs and

skills for local people.
 TNCs bring wealth and foreign currency to local economies when they buy
local resources, products and services. The extra money created by this
investment can be spent on education, health and infrastructure.
 The sharing of ideas, experiences and lifestyles of people and cultures.
People can experience foods and other products not previously available in
their countries.
 Globalisation increases awareness of events in faraway parts of the world.
For example, the UK was quickly made aware of the 2004 tsunami and sent
help rapidly in response.
 Globalisation may help to make people more aware of global issues such
as deforestation and global warming and alert them to the need
for sustainable development.

 
Reading 3: Negative Impacts of Globalisation 
https://www.bbc.co.uk/bitesize/guides/zxpn2p3/revision/5 
Questions: Negative Impacts of Globalisation 

  Globalisation operates mostly in the interests of the richest countries, which

continue to dominate world trade at the expense of developing countries. The
role of LEDCs in the world market is mostly to provide the North and West with
cheap labour and raw materials.
 There are no guarantees that the wealth from inward investment will benefit
the local community. Often, profits are sent back to the MEDC where the TNC is
based. Transnational companies, with their massive economies of scale, may
drive local companies out of business. If it becomes cheaper to operate in
another country, the TNC might close down the factory and make local people
redundant.
 An absence of strictly enforced international laws means that TNCs may
operate in LEDCs in a way that would not be allowed in an MEDC. They may
pollute the environment, run risks with safety or impose poor working conditions
and low wages on local workers.
 Globalisation is viewed by many as a threat to the world's cultural diversity.
It is feared it might drown out local economies, traditions and languages and
simply re-cast the whole world in the mould of the capitalist North and West. An
example of this is that a Hollywood film is far more likely to be successful
worldwide than one made in India or China, which also have thriving film
industries.
 Industry may begin to thrive in LEDCs at the expense of jobs in
manufacturing in the UK and other MEDCs, especially in textiles.