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 CountriesThe 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.