Globalization is the process by which any business or organization develops an international influence or starts operating internationally (Sheppard 20). It is brought about by interdependency of world economies, cultures, and the population. This is achieved by trade (Sheppard 97) in goods, services, and technology. Also, it can be influenced by the flow of investment, people and information. Therefore, economic globalization can be defined as the international spread of goods, capital, technology, services, and information.
Some scholars suggest that economic globalization limits the autonomy of the states while others suggest that the constraining effect of economic globalization on state policy-making autonomy is minimal. This paper will critically evaluate and discuss both claims.
Globalization has had an impact on modern life in every aspect. Economic globalization is beneficial to the world because it provides efficient markets for products, increases the competition, and helps to spread the wealth around the world. However, it has limitations to the autonomy of states in several ways. It leads to the interdependence between nations which can result in regional or global instabilities (Lynch 93). This is likely to happen if the local economy fluctuates which will have an impact on other countries that rely on them. Globalization has had an effect on the national sovereignty of some states. Economic integration has limited the number of policy options that are available to states. Sovereignty has been challenged by negative forces such as global terrorism, climate change, and the power possessed by international organizations have which influence the global market. Some states consider the rise of nation-states, global firms and some international organization as a threat. Another risk of economic globalization is equity distribution which might create inequality and lead to potential conflict both nationally and internationally if the benefits are not fairly distributed.
Economic globalization has a compelling effect on state policy-making autonomy in the world. Most nations benefit from trade and financial openness which provides a healthy competition with one another. The result of globalization has been minimal due to the increased global trade that has bypassed the continent (Lynch 141). This is because economic globalization has widened the existence of inequalities and the developing countries. This has led to action plans being taken at global, regional and national levels. States that are fully integrated within the economy of the world have experienced high growth compared to other states which had slower growth. Nation-states that are advanced in capitalist actively promote economic globalization (Sheppard 68). Such states gain increased power and autonomy on the development of their nations. Any individual state has the ability and capacity to use economic globalization to retain partial control over economic decision-making through collective action.
Globalization has transformed the economy, the social and political landscape in the world. It has not restricted the flexibility of national economic policy-making because it reflects on the priorities and ambitions of different nations. The benefits of trade are embraced in almost every country in the world. It has been driven by the change in technology and financial freedom which is achieved by policy-makers in regards to global economic progress. Every region in the world has experienced growth and they are constantly faced with uncertainty for the world economy. The best response is to take the necessary steps to ensure that our economies are more flexible globally.
Economic globalization benefits the world as well as individual nations on their economies. It achieves this through foreign investments that impact economic growth that results in higher growth rates.
Lynch, Katherine. The Forces of Economic Globalization: Challenges to the Regime of International Commercial Arbitration. The Hague: Kluwer Law Internat, 2003. Print.
Sheppard, Eric S. Limits to Globalization: Disruptive Geographies of Capitalist Development. , 2016. Print.
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