STRUCTURES OF

GLOBALIZATION
• The phenomenon of economic globalization includes greater
integration of economic activities, products and systems across the
world.
• GLOBALIZATION in economic terms extends economic projects and
relations transnationally and promotes economic interdependence
among different countries.
Economic globalization involves the
integration of functions and processes of
economic activities (Dicken, 2004).

Economic integration requires not just

having an international consumer or
exporting goods from one country to
another, but also creating institutions for
market integration and globalization.
Economic Globalization

Is driven by the growing scale of

cross-border trade of commodities
and services (Shangquan, 2000).

It is focused on increasing economic

trade interrelations among countries.

It entails global industrial

restructuring and readjustments
where developed countries play a
dominant role.
Economic integration means that separate
production operations are functionally related to
each other and form a unified product or service.

It requires an efficient management of economic

operations from different areas of the world.

This possible by innovations in transport

logistics, modernization of communication and
transport systems, policies supporting
integration of different processes along the
globe, among others.
Actors that facilitated Economic Globalization

 International Monetary Fund –

1. an international organization of 183

member countries promoting
international monetary cooperation and
exchange stability;
2. Fosters economic growth and high
employment
3. Provides short-term financial
assistance to countries to help ease
balance of payments adjustments.
 The World Bank Group is one of the world’s largest sources of
funding and knowledge for developing countries. Its five
institutions share a commitment to reducing poverty, increasing
shared prosperity, and promoting sustainable development.
 Organizations for Economic
Cooperation and Development (OECD)
- is an international organization that works to
build better policies for better lives. together with
governments, policy makers and citizens, OECD
works with establishing evidence-based
international standards and finding solutions to a
range of social, economic and environmental
challenges. and international standard-setting.
ASEAN (Association of Southeast Asian
Nations)
NAFTA- North American Free Trade Agreement
• These organizations promote regional agreements and statndrads that
facilitate better trade and exchange of knowldege, human resources and
regional cooperation.
• The GROUP of 8 (G8) and G20 are advisory organizations that discuss
current economic and political problems and transfer the ideas from the
groups forum to national legislative regulations (Shangquan, 2000:280).
MULTINATIONAL COMPANIES - considered to be
the main carriers of globalization

• CENTRAL BANKS - considered to be one of the most powerful institutions in

the world economy since they can lead economic development.
• GLOBAL CIVIL SOCIETY- composed of individuals or groups of individuals
disadvantaged by the effects of the globalization of the world economy, they
protest and seek alternatives.
 FLOWS in the Age of Globalization

• Trading
• International trading or the economic exchanges and deals between
countries, is enabled by international fiscal payments where private
banks and the central banks of particular nations play important
roles.
– Global trading concerns importation and exportation.
 Flows in the age of Globalization

• Capital Movement - There was an increase in the capital flows to poor

countries during the 1990’s (IMF,2000),
• Foreign investment categorized as commercial loans, official flows or foreign direct
invetsment are manifestations of capital movement.
– Commercial Loans are money lent to foreign businesses or
governments.
– Official Flows refer to the development aid or money granted by rich
countries to developing nations.
– Foreign direct investment- refers to buying or putting up a firm in a
foreign country or contributing to the enhancement of an existing firm.
Flows in the Age of Globalization

• Movement of People- People can migrate to other countries in search of

better employment opprtunities.
 Flows in the Age of Globalization

• Cultural globalization and Political Globalization

• - Increased interdependence of economies in the world also combines with
globalization of culture and politics.
– Cultural globalization refers to the increasing “contract between
people and their cultures”-their ideas, values, ways of life”.
• This significant change is getting deeply entrenched in contemporary societies.
– It is also linked to globalization of lifestyles such as music, media,
fashion, food as well as globalization of knowledge, science and
technology.
 Flows in the Age of Globalization

• Political Globalization - is the enlargement of the international

political system and its establishments where inter-regional dealings
including trade are managed.
• political decision-making can transcend the boundaries of nations.
ACTIVITY

• Create a COLLAGE that depicts a “global citizen”. You

need to prepare the collage artwork in a one oiece
cartolina/illustration board. Reflect on the qualities and
characteristics of a global citizen and what a global
citizen does or is into. This artwork will be exhibited
where each student could showcase his/her output and
explain it to the class.
The Global Interstate System

• is an institutional arrangement of governance that

addresses regional or globalized issues that go beyond
the scope of a nation-state (Chase-Dunn, 1981).
• system of unequally powerful and competing states in
which no single state is capable of imposing control on all
others. These states are in interaction with one another in
a set of shifting alliance and wars and changes in relative
power of states upsets any temporary set of alliances ,
leading to a restructuring of the balance of power.
Effects of Globalization on Governments
• National and local policies are not only based on local
context but also international and global realities.
Globalization VS Internationalism
• Internationalism is defined as political, economic and
cultural cooperation between nations, while Globalism is
an ideology based on the belief that flow of people, goods
and information should flow freely across national borders
(Roudometof, 2005).
• Internationalism emphasizes diversity and celebrates
multiculturalism, while globalism focuses more on the
economic aspect of exchanges among countries and
society.
Market Integration

• is a process by which economies are becoming more

interdependent and interconnected in terms of commodity
flows, including externalities and spillover of impacts
(Genschel and Jacktenfuchs, 2017).
Two Kinds of Market Integration

• Horizontal Integration- happens when a firm gains control

of other firms performing similar marketing functions at
the same level in the marketing sequence.
• Vertical Integration happens when one company owns the
operations and products from one stage to the other along
the supply chain.
The International Financial Institutions and their Role
in the Global Economy
• these are institutions that provide support through loans
or grants and technical advices to promote a country’s
economic and social development (Bhargava, 2006).
• Global and regional IFI’s include International Monetary
Fund (IMF) and multilateral development banks like the
World Bank, the African Development Bank (ADB), the
inter-American Development Bank and the European
Bank for Reconstruction and Development (Bhargava,
2006).
• IFI’s provide financial and technical services and products
not for profit but for overall economic and social
development (Buiter & Lankes, 2014).
• they provide loans, technical assitance and policy based
lending: macro economic stability and providing the
necessary infrastrusture and systems, sectoral reforms
and creation of safety nets through policy-based lending.
• they also work with the private sector for investment and
policy reforms to promote private sector expansion.
IFI’s four key issues

• legitimacy
• effectiveness
• support conditionality and financial capacity
• sustainability
Corporations

• are private institutions that produce or manufacture

goods, products and services for a more expnaded
market usually at the reach of regions or the world.
TRANSNATIONAL CORPORATIONS (TNC) have a more
complex setting where each foreign subsidiary is given
some freedom to develop its own product lines and
marketing.
• MULTINATIONAL CORPORATIONS (MNC) have a more
home or country base taking care of the R&D and
marketing and focus more on exporting their products and
services.

• Both types of corporations are importers and exporters

and have investments in many countries.