AP Comparative Government and Politics: Briefing Paper (Questions and Responses) Q1. Define “globalization”. Explain some of the interconnections that characterize globalization. A1. Globalization, driven by advanced technological innovation, is the process that results in the rapid growth of interconnectivity of the world; this inevitably prompts increasing interdependence between economies, political system, and societies.
The phenomenon of globalisation is characterized by openness of economies and their respective boundaries as a consequence of the increase in international trade of goods, the movement of capital and persons, spread information and development of transport and communication. There is no consensus to know exactly when the phenomenon of globalisation began. Some historians believe that this event emerged with the advent of the great navigations, where there was an exchange of goods among continents, land occupation and expanding of trade between different parts of the globe. Others, consider that this episode started in the mid-twentieth century at the end of World War II. Whereas, in this period occurred a technological revolution, a significant advance in the areas of communications and the establishment of diplomatic and trade mechanisms among nations.
Globalization involves the increasing interconnection of local and nationalistic economies across the world. It increases border movement of goods, people, technologies, ideas and services throughout the world. It lets other countries to join the rest of the world and become part of worldwide interrelatedness. As the biggest companies are no longer national firms but universal partnership. In my opinion, globalization is an important issue, as it allows countries to collaborate politically, socially and economically.
But what is concretely internationalization? Internationalization is a wide concept with many interpretations. The common feature of all these definitions is the interdependence between different countries, caused by the increasing openness of their market. For this reason, the internal politics of a country, for example, can affect directly the global market and the countries part of it. In this context politics play a fundamental role and are increasingly tied to the economy.
Rapid advancements in technology, transportation and communication has increased the number of multinational enterprises (MNE) which have the flexibility and ability to place their enterprises and activities anywhere in the world. The fact is that a large volume of global trade today consists of international transfers of goods and services, capital and intangibles within an MNE group; such transfers are called “intra‐group” transactions. In such a situation, it becomes significant to establish the right price, called the “transfer price”, for intra‐group, cross‐border transfer of goods, capital, intangibles and services. Transfer pricing is the general term for the pricing of cross‐border intra‐firm transactions between related or associated
International trade is also knows as a globe trade which give the country opportunity to expands their markets for both good and services that otherwise may not have been available in other countries. This type of trade also give advantages for world to rise the economy in term of prices, supply and customer demands, affect and are affected by global events. All of the good and services can be found on international market. International trade will involve two types of process which be export and import. Export is a function of international trade in which the goods produced in a country will be sent to another country for future sale or trade.
Although worldly philosophy is still relevant to the captalist world of globilizaton, (Pikkety & Goldhammer, 2014) argue that the ratio of wealth to income is rising in all global north (developed) countries. This may be credted to entities like the IMF and WTO. The international monetary and trade regimes are taken as international regimes and defined by (Aggrwal & Dupont, 2009, pp. 80-81) as “sets of…principles, norms, rules and decision making procedures around which actors’ expecations converge”. This makes these international regimes essential in supporting a globilizing capitalist economy.
Not only products and finances, but also ideas and cultures have breached the national boundaries. Laws, economies and social movements have become international in nature and not only the Globalization of the Economy but also the Globalization of politics, Culture and Law is the order of the day. The formation of General Agreement on Tariffs and Trade (GATT), International Monetary Fund and the concept of free trade has boosted
In the contemporary society, there are an increasing number of people involved in the globalisation. I choose the topic of international trade. And in the following paragraphs, I am going to introduce what is international trade, other possible benefits of trading globally and the bottom line. (Heakal 2015) Thanks to the international trade that allows us to expand the market for goods and services. And also, as a result of international trade, the market contains greater competition with more competitive price and cheaper products.
Financial globalization is the extent to which a country is linked to others through cross-border financial holdings. According to IMF (2007), it is the sum of a country’s gross external assets and liabilities relative to its GDP, while financial integration is the inter-linkage between a country’s financial systems with those of others. However, both financial globalization and financial integration can be used interchangeably. On the other hand, economic developed is economic growth, accompanied by transformations in citizens’ livelihoods. Financial globalization has been growing a fast rate due to advancements in Information, Communication and Technology (ICT) and the liberalization of national, financial and capital markets (IMF, 2007).