Kenneth A. Reinert examines the many facets and consequences of globalisation.
Given the current political trends in the United States and Europe, there is a great deal of talk about globalisation and its effects on Western workers and citizens. Dramatic and negative claims are being made about international trade and international migration, depicting these processes as severe threats to ways of life. There are at least two significant limitations to this ongoing debate. First, globalisation is not a single entity or process. Rather, it is a collection of many entities or processes. Second, Western workers are not the individuals most directly affected by globalisation. Instead, it is the citizenries of the low- and middle-income countries that are most profoundly affected with various development impacts of globalisation processes affecting the very poor. Let’s briefly consider these two limitations of ongoing political debates.
With regard to the first limitation, the notion of globalisation is better thought of in a plural sense, namely the awkward-sounding but more accurate term globalisations. The many processes of globalisation(s) take place in the realms of international trade, international production, international finance, migration, foreign aid, culture, technology, and politics. This is still a partial list, and within each of these realms there are even more detailed processes to study. Within international trade, for example, there is trade in goods, trade in services, agricultural trade, and the protection of intellectual property. Within international production there is foreign direct investment (FDI), as well as various forms of contractual relationships, both of which are part of evolving global production networks (GPNs). These GPNs, in turn have implications for trade.
Within international finance, there is bond finance, equity investment, and commercial bank lending. Each of these involves different types of assets traded in different markets, with each behaving differently from the other. Periodic financial crises have negative implications for international trade. In the realm of international migration, there is low-skilled migration, high-skilled migration, political and climate refugees, as well as trafficked persons. Migration patterns can affect the shape of global production systems at both the high- and low-skilled ends of the spectrum.
Foreign aid can itself be broken up into different types of aid, including humanitarian aid, food aid, multilateral aid, and bilateral aid. Foreign aid can form conduits of culture, politics and policy, for better or worse. Global organisations of various kinds―international governmental organisations, international non-governmental organisations, and multinational enterprises―are all involved in or attempting to influence globalisation processes and their evolving regulation.
Globalisation is a radically multidimensional concept
Even up to here, we haven’t covered the full range of globalisation(s). Culture, technology, health, and the military are all, at least in part, globalisation processes. The point is that globalisation is a radically multidimensional concept. For this reason, simple descriptions of globalisation are almost always incomplete. We need to get into the weeds and consider specific globalisation processes one by one. For example, the way that the GPNs of multinational supermarket firms affect patterns of agricultural trade is not exactly like the way that equity capital flows affect local equity markets. On the other hand, there are some commonalities. For example, illicit trade in many products has a close relationship to human trafficking. Both the differences and commonalities matter a great deal.
With regard to the second limitation, we need to have a sense of what sort of globalisation impacts we are interested in. While it is currently popular to dwell on the effects of international trade and low-skilled migration on Western workers, much more is actually at stake. The key questions actually have to do with globalisation(s) impacts on development processes more broadly, especially in low- and middle-income countries where most poor people reside. But development is also a radically multidimensional concept related to growth, many kinds of structural transformations, and hoped-for improvement in human well-being measured in a number of different ways. The multidimensional concepts of globalisation(s) and development force us to encounter a large matrix of many different questions, not the single concern of trade and Western wages.
What are some of these questions? Here are just a few examples:
- What are the impacts of expanded commodity exports on wages and poverty as compared to labour intensive manufacturing?
- What are the impacts of international commercial bank lending on the financial stability of recipient country, and how does the strength or weakness of regulatory systems influence these impacts?
- What are the distinctions between low- and high-skilled migration? How can these two types of economic migration be better harnessed for positive development outcomes in both countries of origin and countries of destination?
- What is the best way to address the criminal activities that surround illicit trade and human trafficking? What are the drivers of these activities and how can these drivers be ameliorated?
- Are there common aspects of political development that cross international boundaries, and can we identify types of political development that appear to have more positive development outcomes?
- What are the links among globalisation(s), poverty, and inequality? How can these be measured in a consistent manner over time to better inform policymaking?
- What are the links between globalisation(s) and health outcomes? What role does intellectual property protection and these outcomes?
Looking at just this small sample of questions, it is clear that any agenda of simple solutions is inherently misleading. Sloganeering is not helpful, whether by politicians, the NGO community, or orthodox economists. At the moment, the sloganeering is against globalisation processes altogether, and this message is being pushed by both ends of the political spectrum. The threat inherent in this political project is that the countries of the world will begin to retreat into an increasing number of ethno-nationalisms, undermining the multilateral, rules-based system altogether. History tells us that this can be catastrophic for development. Ironically, these emerging ethno-nationalisms are linked across national borders, embracing aspects of the very globalisation they condemn.
The research and policy agenda represented by ‘globalisation(s) and development’ is both vast and vastly important. The Elgar Handbooks on Globalisation series, including the recently-released Handbook of Globalisation and Development, is a small but vital part of this agenda. We need a great deal more considered study and discussion, and great deal less sloganeering. Let’s hope this need is met.
Kenneth A. Reinert is Professor of Public Policy at Schar School of Policy and Government, George Mason University, US
Handbook of Globalisation and Development edited by Kenneth A. Reinert is now available.
Read Chapter 1 , Globalisation and Development: Introduction and Overview is free on Elgaronline.