Globalisation and Its Impact
Globalisation and Its Impact
The exam tests the dimensions of globalisation, its winners and losers, and whether the state has weakened. You need to distinguish globalisation from liberalisation and from Westernisation.
Core rules and concepts
- Globalisation is growing interdependence of economies and societies through trade, investment, technology, migration and culture. It is not only economic.
- Economic globalisation involves liberalisation, privatisation, deregulation, MNCs, FDI, global value chains and outsourcing. The WTO provides trade rules.
- Political globalisation involves international organisations, global governance, NGOs and global norms; state sovereignty is transformed, not abolished.
- Cultural globalisation produces homogenisation and hybridity; glocalisation is the adaptation of global products to local tastes. Resistance and identity politics are part of the process.
- India's 1991 LPG reforms, IT and BPO growth, diaspora and remittances show integration. Benefits include growth and a middle class; costs include inequality, informal labour, agricultural stress, environmental damage and a digital divide.
- Anti-globalisation protests, the 1997 Asian financial crisis and the 2008 global crisis show backlash and vulnerability.
Worked example
Evaluate outsourcing to India. Reasoning: the foreign firm lowers costs; Indian workers gain jobs and foreign exchange; consumers may get cheaper services. But the host economy becomes demand-dependent, labour rights may be weak, and gains are uneven. A good answer separates home-country, host-country, short-run and long-run effects.
Traps
Equating globalisation with liberalisation; claiming the state has disappeared; assuming all states benefit equally; treating cultural globalisation as simple Westernisation.