The Structures of Globalization

(The Global Economy)

Objectives:
At the end of the discussion, students must be able to:
● Define economic globalization;
● Identify the actors that facilitate economic globalization;
● Define the modern world systems; and
● Articulate a stance on global economic integration.
Definition of Terms
● Economic globalization - is the expansion of national economies, the global market driven
by modern technologies and institutional set ups that promote faster flow of goods and
capital (Sugden and Wilson, 2005).
● Global economy - denotes that the economies of various countries are more interconnected
from extraction, production, distribution, consumption, to disposal of goods and services
(Carfi and Schiliro, 2018).
● International financial institutions - are glonal financial institutions that support a country’s
economic growth through support (i.e., loans, technical assistance) to governments and now
other private sectors (Woods, 2019)
● International Monetary Fund - is an international organization with 183 member countries
that promotes international monetary cooperation and exchange stability to foster economic
growth and high employment and to provide short-term financial assitance to countries to
help ease balance of payments adjustments (IMF, 2019).
○ As of 2023, IMF has 190 members as per their organization’s site.
Definition of Terms
● Global civil society - is a system of nongoverment institutions that operate across
gegraphical borders and organize and mobilize for a common issue or cause (Keane,
2003:8).
● Global corporation - is an “enterprise that engages in activities which add value
(manufacturihng, extraction, services, marketing, etc.) in more than one country”
(UCTC, 1991).
● World system - is based on the theory of Wallerstein (1974) that recognizes that
social and economic change is not only endogenous to a country, but is affected by
its interaction to exogenous institutions, thus the focus on world-systems (Chase-
Dunn, 2018).
● Economic integration - is a process of combining or increasing the interconnectivity
of the national economies to the regional or global economies (Clark et al., 2018).
The Global Economy
Introduction
The phenomenon of economic globalization includes greater integration of
economic activities, products, and systems across the world. As Szentes
(2003:69) argues, globalization in economic terms extends economic projects and
relations transnationally and promotes economic interdependencies among
different countries.
Globalization goes beyond internationalization.Economic globalization involoves
the integration of functions and processes of economic activities (Dicken, 2004).

This means that economic integration requires not just having an international
consumer or exporting goods from one country to another, but also involves
creating institutions for market integration and globalization.
Definition of Economic Globalization
Most of the definitions of globalization certer on its economic dimensions.
Economic globalization is driven by the “growing scale of cross-border trade of
commodities and services” (Shangquan, 2000:1).

Critical to economic globalization is global economic integration.

Definition of Economic Globalization
Economic integration means that separate production operations are functionally
related to each other and form a unified productor service. This requires efficient
management of economic operations from different areas in thne world.
Definition of Economic Globalization
The various definitions of economic globalization focus on increasing economic
trade interrelations among countries (Steger, 2010; Al-Rodhan, et al., 2006;
Shangquan, 2000). This is governed by neoliberal principles with the role of the
market as a central driver of economic activities, with less government
interventions (Martin, Schumann & Camiller, 1997).

Economic globalization entails global industrial restructuring and readjustments

where developed countries play a dominant role (Shangquan, 2000:3).
Definition of Economic Globalization
However, the process of global economic is not a modern phenomenon. The
voyages of earlier explorers including the formation of empire (i.e., Roman empire)
were critical in intercontinental trade and were also a precursor of modern
economic globalization.

Chinese, and even earlier, trades in Asia also serve as first-forms of economic
expansion and later integration.
Definition of Economic Globalization
Gills and Thompson (2006:1) argue that the globalization processes “have been
ongoing ever since Homo sapiens began migrating from African continent
ultimately populate the rest of the wolrd.”

Explorations in earlier times tend to focus on a relatively smaller target of

commodities of high value like spices, tea, gold, or other precious metals. The
difference now is the extent and reach of economic globalization, restructuring of
economic systems, and the dominant influence of the private sector in the global
economy (Shangquan, 2000).
Actors facilitating Economic Globalization
Globalization has opened the doors for other non-state authority actors in driving
economic globalization (Madsen & Christensen, 2016; Sassen, 2006).

● Non-state actors include the international economic organizations, private

sector led by multinational companies, central banks, and civil society.
Actors facilitating Economic Globalization
Contributions of actors to economic integration.

First, international organization such as IMF, World Bank , an Organization for

Economic Cooperation and Development (OECD). These organizations are
critical in developing and pushing for neoliberal policies among different countries.

Also, they facilitate trade and development discussions among various states.
Actors facilitating Economic Globalization
Another example are regional orgnanizations such as the Association of Southeast
Asian Nations (ASEAN) and North American Free trade Agreement (NAFTA) .

These organizations promote regional agreements and standards that facilitate

better trad and exchange of knowledge, human resorce , 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 groups’ forum to
national legislative regulations (Shangquan, 2000:280).
Actors facilitating Economic Globalization
Second, multinational companies (MNCs), which are considered to be the main
carriers of economic globalization (Shangquan, 200:2).

Other prime movers of econmic globalization are central banks.

Actors facilitating Economic Globalization
Lastly, the glovbbal civil society as a major driver of economic globalization The
global civil society has made its mark in the global development arena particularly
during the UN Conference on Environment and Development in 1992 (Keane,
2003).

Global civil society seen as either composed of individuals or groups of individuals

disadvantaged by the effects of the globalization of the world economy.
On the other hand, global social movement constituting a basis for an alternative
to a new world order (Gherghel, n.d.).
Actors facilitating Economic Globalization
Part of the global civil society are the Transnational Advocacy Networks (TAN),
networks which are “organized to promote causes, principled ideas, and norms,
and they involve individuals advocating policy changes that cannot be easy linked
to rationalist understanding of their “interests” (Keck & Sikking, 1998:8-9)
International Financial Institutions
Transnational Corporations
What is the Modern World System?
World System
The seminal work of Immanuel Wallerstein on the world-system theory (1974) is a
critical reference in the theorization of globalization.

For Wallerstein, a world system constitutes a social system composed of

boundaries, structures, member groups, rules of legitimation, and coherence
(Wallerstein, 2011).
World System
World economy, according to Wallerstein (2011), is divided into core states and
peripheral areas including semi-peripherals.
● Peripherals - where production and and raw materials are sourced out.
● Semi-peripherals - processed and distributed products.
● Core states - sites of major demands for goods and services.
END