Seminar on the Politics of Globalization and International.pptx

Seminar on the Politics of
Globalization and International
Development
By
Dr. Gizachew Asrat

Understanding Globalization
• Globalization has recently become one of the terms most
frequently used in politics, sociology, culture, and especially in
economy.
• At the same time, growing anti-globalization movements have
often been obstructs conferences on globalization worldwide.
• Generally, globalization is defined as merging of national
economies into a uniform world system.
• It represents a powerful civilization venture as a concept,
because it involves numerous dimensions of life: cultural,
informational, scientific, technological, economic and
political.

Cont...
• It implies the standardization and
homogenization of products, prices, quality
and ecological criteria, the approximation of
income levels and quality of life degrees and
the equalization of many criteria at the world
scale.

Cont...
• Scholars and practitioners use the term ‘globalization’ to
refer to various quantitative and qualitative developments
ranging from a dramatic increase in international
transactions, especially in finance, to the international and
spatial reorganization of production, the global
harmonization of tastes and standards, liberalization,
deregulation, privatization, the arrival of new information
technologies, the global diffusion of information, values,
and ideas, massive population transfers, trends towards a
universal world culture, the spread of a worldwide
preference for democracy, and the erosion of the nation
state.

Basic Terms
• Globalization and Globalism
– Globalization is processes whereby social relations require relatively
distance less and borderless qualities, so that human lives are
increasingly played out in the world as a single place.
– Is the imperialistic ambitions of nation-states, corporations,
organizations, and the like and their desire, indeed need, to impose
themselves on various geographic areas throughout the world.
– Globalism is the ideological or philosophical base of the process-
globalization.
 Shortly, the difference between globalization and globalism is the
former is a process whereas the later is an ideology.

• Globaphilia: is an emphasis on the positive aspects of
globalization, with the expectation that it would result
in greater economic success and the spread of
democracy.
Glob phobia: is an emphasis on the negative aspects of
globalization, especially for the
less well-off portions of the global population.
• Vagabonds: are people who, if they are able to move at
all, are likely to be doing so because they are forced to
(e.g. forced to migrate to escape poverty [and to find
work], by war, because of discrimination).

The Causes of Globalization
• Globalisation is not a new phenomenon. However, today
more than any time world is more interconnected.
• The causes are:-
– Improvement in technology and speedy flow of information
– Capital mobility
– Labour mobility
– Improved transportation
– Lower tariffs and trade barriers
– MNCs
– Global media such as CNN, BBC etc

Aspects of Globalisation
• There are three main aspects of globalisation
– Economic globalisation
– Political globalisation
– Socio-cultural globalisation
Globalisation has encouraged more trades and
increased the flow of capital among nations

Economic Globalisation
• Globalization is very much visible in the area of markets,
trade, goods and services, technology, information and ideas
across national boundaries.
• Globalization has its natural linkage with liberalization,
because capital is flowing and multi-national companies and
corporations are spreading their network across the countries
of the world.
• Foreign direct investment is a world-wide phenomenon.
Race to the bottom is the phenomenon whereby countries are
involved in a downward spiral of competitiveness as a result of
undercutting prices, lowering wages, making working
conditions poorer, lengthening hours of work, and increasing
pressure on and demands of workers.

• A primary core aspect of globalization is the transformation of
global economic activity.
• Technological change and government deregulation have
permitted the establishment of transnational networks in
production, trade and finance.
• The new `production' network describes firms and Multi-
national Enterprises (MNEs) who use advanced means of
communication, and new, flexible techniques of production to
spread their activities across the globe.
• The quantity and speed of goods and services traded across the
globe has increased, and so too the geographical spread of
participants, the strength and depth of institutions which
facilitate trade, and the impact of trade on domestic economic
arrangements.

Political Aspect
• The political dimension of globalization has been affecting the
nation-state system since the Westphalia treaty of 1648.
• It has affected the external aspect of sovereignty and entailed
the end of interests’ state.
• Some argue that a new `global politics' is emerging in which is
characterized by a global political order in which states'
political boundaries become much less important.
• In the new interconnected global political order, political
power and political activity are said to extend across the
boundaries of nation-states.

Cont...
• Global issues' have emerged which require states to coordinate
policymaking at levels above the nation-state. These issues include human
rights, environmental degradation, and nuclear safety.
• The same technologies and policies, which make new kinds of economic
activity possible, also facilitate the spread of transnational crime, weapons,
drugs and illegal immigrants.
• All of these issues are such that no one state can effectively regulate on its
own.
• These shifts in decision-making do not necessarily imply an erosion of
existing state power and authority.
• Rather, what has changed is the way in which states use their power and
authority - with states now choosing to participate in regimes in which they
make decisions in coordination or cooperation with other states.

Socio-cultural dimension
• Globalization has its definite impact on the social and cultural
life of the people.
• Traditional institutions are growing weak and new identities
are emerging that do not belong to any community or nation in
particular.
• New developments of information technology transform the
cultural pattern of a people’s life by making them accustomed
to wear American garments, eat Chinese food, and listen
English Pop music and the like.
• It driven by communication technology and the worldwide
marketing of Western cultural industries, was understood at
first as a process of homogenization, as the global domination
of American culture at the expense of traditional diversity.

Cont...
• Globalization is altering the lives of people across
the globe and affecting their culture and values.
• New communications systems mean that media,
music, books, international ideas, and values can
all disseminated in a global and virtually direct
manner.
• This is producing what some describe as a `global
culture.'

Cont...
• The customs and rituals, religious faith and traditions, art
and literature, all find free flow from dominant culture to
economically weaker one.
• The resistance of the native people is chiefly through the
strength of their own religious principles and traditions.
• Militarily the native cannot fight back, but the religion of
the land is capable of keeping its head afloat if its
level of civilization, faith in scriptural tradition, and history
are strong.
E.g. Yoga, Mediation, Catholic religion etc

Major Actors of Globalisation
Global/ Trans-state actor
• WTO: It has four key objectives
– to set and enforce rules for international trade
– to provide a form within which to negotiate and
monitor trade liberalization,
– to improve policy transparency, and
– to resolve trade disputes.

• Private Non-profit and Semi-private Voluntary Associations or
International Non-Governmental Organizations (INGO)
• Multi-National Corporations (MNCs) and Transnational
Corporations (TNCs); For instance: General Motors, Toyota,
Ford Motors and the like.
State Actors (State Level)
Central Governments of Sovereign States: Central
governments are concerned primarily about the welfare of
their own domestic state societies.

• Through their foreign policies, these central governments
affect other central governments, other sovereign state-
societies, and the global system.
Individual Actor
• Ultimately all human societies, including the global system, are
made up of individuals and only individuals act whether as part of a
social grouping, an organized group, or a formal, bureaucratic
organization.
• Former leaders of countries, kings, and very rich persons sometimes
become international actors as single individuals.

• Ordinary citizens may become actors if
abducted by terrorists, trapped in some
natural catastrophe, or accused on crimes in a
country other than their own.
• Tourists, business persons in foreign countries.

State and Sovereignty
• The concept of sovereignty refers to the three-fold
capacity of a state, which is
– absolute supremacy over internal affairs within its
territory,
– absolute right to govern its people, and
– freedom from any external interference .
• Sovereignty is defined as the absolute supremacy
and right of the government in a given state.

Cont...
• Larger number of powerful non-sovereign and at least partly
independent actors, ranging from corporations to non-
government organizations (NGOs), from terrorist groups to
drug cartels, from regional and global institutions to banks
and private equity funds.
• They influence the sovereign state as much
as it is able to influence them. The near monopoly of power
once enjoyed by sovereign entities is being eroded.
• The impact of globalization varies, and one particular
determinant is state strength. All states are affected by
globalization insofar as it alters their possibilities and
opportunities.

Development Theories and
Practices

Concepts and Meanings
Development
• Michael Todaro, describes it as a multidimensional process
involving major changes in social structure, popular attitude,
and national institutions, as well as the acceleration of
economic growth, the reduction of inequality and the
eradication of poverty.
• It is a multidimensional process involving the reorganization
and reorientation of entire economic and social systems.
• It typically involves radical changes in institutional, social
and administrative structures as well as in popular
attitudes and, in many cases, even customs and beliefs.

Cont...
• Development implies an overall positive change in the
physical quality of life.
• It implies growth with justice. It means an improvement in
quality of life through better health, education, housing
and overall material and social welfare.
• For Amartya Sen, the status of poor and non poor person
determined by the capability to function

Cont...
• Paul P. Streeten, it is an attack on the chief evils
of the society: malnutrition, disease, illiteracy,
slums, unemployment, and inequality.
• Uma Kothari, it is the process of societal,
economic, political and cultural changes.
• According to Esman, development connotes
steady progress to wards improvement in human
condition. It means reduction and eventually
elimination of poverty, ignorance, and disease,
and expansion of well being for all.

Development and Growth
• Economic growth means an increase in the value of all
goods and services produced in an economy. The sum total
of all goods and services in an economy is termed as the
Gross Domestic Product (GDP).
• Development, on the other hand is a sustained improvement
in material welfare, particularly for those who are poor and
afflicted by poverty, illiteracy and poor health conditions.
• It is a qualitative concept involving a qualitative
improvement in the general standard of living in a country
or economy
– economic development = growth + change

Developing countries are characterized
by
• Mass poverty
• Low levels of income and concentration of
incomes in a few hands
• Low levels of productivity and backward
technology
• High levels of unemployment and
underemployment
• Poor health, nutrition, illiteracy and poor
housing
• Lower status of women

Theories of Development and
Underdevelopment
*What is Theory?
*Theory is a specific claim or argument that
leads to empirical predictions
• Modernization
• Dependency
• World System
• Institutional

Modernisation theorists aimed to:
a) Explain why poorer countries failed to evolve into modern
societies
b) Reduce the spread of communism by presenting capitalist values
as the solution to poverty
• Modernization theories roots in North- South relations
• It focused on the concept of linear paths of development from
traditional and agrarian = modern and industrial societies
• It argued that economic growth, institutions and political changes
are the challenges for economic backwardness of the south
• The way out from this is the capitalist model
Modernisation theory has become
increasingly influential, especially since post
collapse of USSR

Cont...
• They viewed the process of development as a
series of successive stages of economic growth
through which all countries must pass
• Proponents argued that the third world countries
in order to develop they have to follow the paths
of the advanced countries.

Cont...
• The theory insisted that societies of the South should
create and acquire modern cultural values and modern
political and economical institutions
• Development in developing countries would come about
and would be engineered through the diffusion of
innovations, capital, technology, modern ideas,
entrepreneurial ship, democratic institutions, and values
from the developed western societies

W.W Rostow’s
• Walter W. Rostow subscribes some form of evolution.
All societies go through the same stages of economic
development
• His theory was that all nations pass through the same
five stages of economic development: the traditional
society, preconditions for take-off, take-off, the drive to
maturity, and the stage of mass consumption

Rostow’s evolutionary ladder of development
(economic factors)
1 Traditional society: poverty,
primary production and
traditional values
2 Pre-conditions for take-off:
the West assists development
through aid and industrial
investment
3 Take-off: high economic growth
and investment in infrastructure
begins
4 The drive to maturity: economic and
cultural factors lead to increasing
prosperity for all
5 The age of high Mass
consumption

Rostow –Five Stages of Growth
Traditional Society
Characterized by
• Subsistence economy-
output not traded or
recorded
• Hunting & gathering
• High level of agriculture &
labour intensive agri
• No technology
• Rigid society, no individual
economic mobility
Conditions
• Transfer resources from
agriculture to
manufacturing
• Shift from regional to
national/international
focus
• Must shift away from
having children
• People must be rewarded
not for their connections
but their economic
abilities

Cont...
Pre-conditions (Started economies)
• External demand for raw materials initiates
economic change
• Changing social structure
• Individual social mobility begins
• Development of mining industries
• Increase in capital use in agriculture
• Necessity of external funding
• Some growth in savings and investment

Cont...
Take off (Growing Economies)
• Urbanization & industrialisation Increasing
• Further growth in savings and investment
• The secondary sector expands and the ratio
of secondary vs primary sectors in the
economy shifts quickly towards secondary
• Some regional growth
• Number employed in agriculture declines

Cont...
Drive to Maturity (Developed
Economies)
 Growth becomes self-
sustaining-wealth generation
enables further investment in
value adding industry and
development
 Industry more diversified
 Increase in levels of
technology utilised
 Large scale investment in
social infrastructure ( School,
Universities, Hospital etc)
High Mass Consumption ( Global
Economies)
• High output levels
• The industrial base dominates
the economy
• Mass consumption of
consumer durables ( e.g.
Automobiles)
• High proportion of
employment in service sector
• Mass production in service,
industries, Welfare and
recreation

1. It is ethnocentric because
(a) it devalues traditional values and social
institutions e.g. extended families
(b) it ignores increasing inequality within and
between countries
(c) it is not a neutral theory as it suggests (it
promotes western capitalist values)
Criticism of modernisation theory

2 Education in developing
world mainly benefits
small, local elites (those
at the top)
3 It assumes unlimited
natural resources for
industrial expansion.
(ignores ecological
issues)

4 There is no, one single way to advancement and
historical context is also important.
5 The cultures of developing countries is not
always a cause for economic insecurity and
poverty

Cont...
• Dependence - a situation in which the economy of
certain countries is conditioned by the
development and expansion of another economy
to which the former is subjected.
• The relation of interdependence between two or
more economies, and between these and world
trade, assumes the form of dependence when
some countries (the dominant ones) can expand
and can be self-sustaining, while other countries
(dependent ones) can do this only as a reflection
of that expansion.

• Started around the 1960s
• Answer to the Modernization school
• Took hold in the 1960s and 1970s partly
because of the revolutionary atmosphere of the
period

Center
Periphery
High value-added goods
(industrial products)
Low value-added products
(primaries: raw materials
and food)

Characteristics of Countries in the
Periphery
• Provide raw materials, cheap labor for core
• Concentrate on few primary commodities (commodity
concentration)
E.g coffee, banana
• Vulnerable to volatility of raw material prices
Example: oil
• Dependent on one core country (trade partner concentration)
• Depend on core for capital, technology, technical skills etc.

World-System Theory
By
Gizachew A. (PhD)

World-System Theory (WST)
• World-System theory tried to explain the failure of many countries
to develop
• Scholars: Andre Gunder Frank; Immanuel Wallerstein
• Claim: Underdeveloped/peripheral countries are not just like
Europe, but at an earlier stage of development
• They have a very different history: colonization
• And, they must compete with highly developed countries
– Europe was undeveloped and became developed
• Other countries were undeveloped, and now trapped in a state
of “underdevelopment”.

• World-System Theory: We need to study the
entire global economy as a world system
• We can’t understand the fate of a single country, without
understanding how it fits into the overall system
• Countries aren’t poor because of their own specific history
or internal characteristics
• Rather, they are poor because of their position relative to
others in the global capitalist system.

• Key concepts:
• Core: the rich, developed countries
• Also: west; metropolitan countries; developed world
• Periphery: poor, dependent nations
• Also: underdeveloped countries; satellites; dependencies
• Semi-periphery: semi-industrialized countries
• Dependency: The vulnerable state of being
exploited by core countries
• They depend on the core for trade, investment, loans,
technology, etc.

• Classical economic theory (Ricardo) predicts that
specialization & trade is beneficial for all
• Countries that can produce high-tech goods most
efficiently should concentrate on that
• Countries that can produce bananas or coffee efficiently
should concentrate on that
• Specialization leads to a “win/win” situation… everyone is
more efficient; countries become more wealthy
• World-System theorists criticize this view…

• Criticism #1: Specialization in low-tech
production (e.g., bananas) may produce profits
in the short term…
• But, there is a cost: countries fail to develop industry and
sophisticated technology that could lead to greater profits
in the future
– Argument: In the long run, countries would be better
off developing high-tech industry, rather than just
producing coffee…

• Criticism #2: trade is asymmetrical
• Rich countries don’t need coffee/bananas badly
– And, they can buy them from many sources
• But, poor countries critically depend on trade to get
technology, machinery to develop their economies
• Thus: Poor countries are dependent on rich ones
• They need manufactured goods… and are forced to pay
with high prices
• And, they must sell their raw materials and agricultural
products very cheaply.

• Economists argue that foreign investment is good
for peripheral countries
• World system theorists criticize this, too:
• 1. “Core” capitalist countries tend to extract
profits from the periphery
• This outweighs benefits of foreign investment
• 2. Foreign investment doesn’t really help a society
industrialize
– Foreigners build plantations and mines to extract resources
– They build roads & ports to extract; not to benefit the country
• In sum: They don’t build useful industrial infrastructure.

• More key concepts:
• Trade concentration: When a peripheral country
trades with just a few core countries (or only
one)
• Investment concentration: When investment
comes from just a few core countries (or one)
• High concentration may make peripheral
countries vulnerable
• If the core country decides to halt trade or investment,
economic disaster would follow
• Peripheral countries must please core trading partners
• They lose political autonomy to do what is best for its
people.

• Scholars such as A. G. Frank found evidence in
studies of Latin America
• Key observation: Latin American economies and
trade was unusual:
• They mainly produced “cash crops” and raw materials
• Trade was almost entirely with the U.S.
– High “Trade Concentration”
• Foreign investment resulted in foreign-owned plantations,
not expanded industry & “development”.

• Interpretation of Latin American situation:
• Global capitalism forced countries into a state of
under-development
– 1. They can’t compete with industries from high-tech
economies
• They do not develop high-profit industries: cars, etc.
– 2. Instead, they trade commodities (coffee)
• They must compete with other poor countries for sales… so
they don’t make much profit
– So, they remain underdeveloped…

• Research literature on WST… Examines:
• Do countries with more trade, investment, and
concentration fare worse in terms of:
• Economic growth
• Poverty
• Health and environmental well being
• Democracy
• Results: Mixed

• Issue: Why don’t all the peripheral countries
band together and overthrow the core?
• Example: In 1970s, Oil-producing countries created
“OPEC”, and restricted the flow of oil to the core
• Result: High gas prices; OPEC countries got rich
– Though eventually the West made friends with Saudi Arabia and
others… who lowered prices.
• Why doesn’t this happen all the time?

• Wallerstein’s explanation:
• for stability of the world system
• 1. Military dominance of the West
• Ex: US overthrew any Latin American governments that tried
to oppose the US
• 2. Ideological commitment to the system
• People believe capitalism is “fair”, just
• 3. The existence of the semi-periphery
• Most important, according to Wallerstein
• Semi-periphery is doing OK, so they support the core
• Prevents everyone from ganging up on the core…

• Question: How does WST differ from other
analysis of economic globalization?
• Both agree that economics = important
– But, economists often view the world economy
positively (or neutrally)
• Ex: Ricardo thought trade was overall beneficial
• Ex: Many economists think globalization reduces poverty
compared to a world without trade

• In contrast, WST argues that the global economic
system is inherently unfair
• They argues that globalization perpetuates inequality.
• Economic power of core countries and MNCs is so great
that the periphery will always be exploited
• The idea that governments and international institutions
can make the system “fair” is an illusion
– Governments and international institutions (e.g., the WTO) will
always reflect interests of capitalists
– Therefore, WST scholars are pessimistic about the role of global
governance in solving social problems…
– Consequently, the system must be substantially
reorganized… or overthrown.

• What should peripheral nations do?
– According to WST scholars?
• 1. Peripheral countries must avoid exploitive
economic relations with the core
• Beware of trade and foreign investment, which can lead to
exploitation and foreign control
• 2. Try to nurture domestic industries
• Don’t sell coffee and rely on core for high-tech
• Try to develop advanced industries locally
• “Import substitution” – developing local industries to avoid
importing products.

3. Band together with other poor nations to fight
against the power of the Core…
• Trade with each other
– Perhaps create cartels to bargain with the Core
• And some argue: start a global anti-capitalist revolution.

• How does WST view international organizations?
• Answer: They do not affect the fundamental
economic positions of core and periphery
• Claim: Most IGOs and INGOs are created by core countries,
and will never fundamentally undermine the dominance of
the core
– IGOs and INGOs tend to perpetuate core dominance
– Example: WTO has not given big concessions to periphery
• The only thing that could help would be organizations
representing the peripheral countries against the core!

• Criticisms of WST:
• 1. Research findings are mixed at best
• The specific WST predictions about sources of global
inequality/poverty have often been wrong
• It is true that there is horrible poverty in the world…
– But: Are people worse off than if there was no global economy?
That is less clear.

• 2. WST doesn’t make clear predictions
• After the fact, almost any action can be interpreted as
“serving the interests of global capitalists”
– Example: The Montreal Protocol on CFC emissions
• First, the core didn’t sign it… WST scholars said: “See, the
core is using its power to avoid the treaty!”
• Later, when the core signed it, WST scholars said: “See, the
core has ensnared the peripheral countries in a treaty that
will keep them in poverty”
– A theory that can fit any evidence is not so useful.

• 3. Reverse causality
– WST argues: Countries that are dependent on the
core of the world capitalist system will be trapped
into a state of underdevelopment
– BUT, maybe it works the other way around
• Poverty produced “dependent” relations in the first place
• Poor countries can’t produce high-tech goods, so they
trade commodities (e.g., bananas)
• But, this doesn’t necessarily mean that trading bananas
made those countries poorer or “trapped” them into
poverty.

• Generally, WST is a useful theory that has some
predictive power
• BUT: don’t become a conspiracy theorist
– Don’t assume that the entire global economy is
conspiring to “keep the little guy down”
– The real answer, as always, is that the world is
complex…
• Some aspects of the global economy have been beneficial,
others not

Institutions
• Douglass North, defines institutions
* ‘as the preventing rules of the game in society’
• They are designed by human being to shape human
interaction.
• Acc to him, institutions are composed of formal rules
created by human beings such as statute law, common
law and regulations, informal constraints conventions,
norms of behaviour and the enforcement.
• Culture inherited in different societies may also
significantly explain why same formal rules have made
diverse outcomes in various circumstances.

• The three fundamental elements of institutions
– Formal or written rules- political system, laws
governing contracts, crime, imposition of taxes, tariffs,
regulation of banks etc.
– Informal or unwritten rules – culture, norms of
behaviour, customs, values, religions etc. They are
generated from socially transmitted information and
imposed by people upon themselves in order to
structure their relationships with each other.
– The enforcement- institutions are ineffective when
they are not enforced.

Institutions of Developed and LDC are different
• Institutions of developed countries are high
quality and induce economic growth
• Institutions are formal with legal rules
• They are enforced following the legal
procedure

Cont...
• LDC institutions are:
• They are not conducive to economic development
• Peoples are fatalist (Pessimist) and they influenced by
more traditional customs and placed high values for
ceremonies and participation in festivals
• Joint family which challenges of independent decision
making
• People are influenced by ethnicity, cast and clan at social
level
* So social institutions should be changed or modified for
economic development to take place.

Cont...
• All social changes should be selective and
through stages
• The process of change should be evolutionary
than revolutionary
• Popular education plays a significant role in
enlighten and open for knowledge

Discussion
• What is the role of institutions?
• How institutions affect the performance of the
economy and political system?

• 1: “Economic globalization and State Sovereignty” In this seminar, you will
debate whether economic globalization reduces state capacity or not, and
whether this is good or not. You have to discuss the potential effects of
trade and capital globalization on State policies, people and world regions.
Do they limit State capacity and autonomy? What can the state do? If so,
is it necessarily bad?
• 2: “The distribution of foreign aid to the poorest countries” In this seminar
you will evaluate the advantages and disadvantages of foreign aid and, in
case of giving it, discuss if it should be conditional on some (political or
economic) reforms. Does aid promote development and reduce poverty?
Is aid helping authoritarian governments retain power? Should rich
countries give aid? If yes, what type of aid and how should it be
distributed?
• 3: “Sanctions and military intervention against a Sovereign State” In this
seminar you will discuss a potential military intervention and the adoption
of sanctions against one repressive dictatorship. You will discuss the
strategies to put pressure and even coerce dictatorships and their
potential impact. Are military pro-democratic and humanitarian
interventions legal and/or legitimate? Do they help target States? Do they
really promote democracy or help peace-building? Are economic
sanctions effective in making regimes concede?

• 4. What are the factors contributing for globalization? Is
globalization created asymmetrical trade between poor and
developing countries? If yes? How poor countries overcome
the challenges? If not try to show how symmetry is
international trade?
• 5. Is underdevelopment a domestic or external induced
phenomenon? Please explain your idea using one of main
development theories?
• 6. What is globalization? How do you see its impact in
Africa and in Ethiopia? please try to explain it from all
aspects of globalisation?
• 7. Violent Non-State Actors and Its Challenge for Security in
Africa. What conditions/factors favour the emergency of
violent or armed non-state actors in Africa? What are the
implications/effects of ANSA on national security? What
strategies can the African countries governments use to
contain these groups to improve national security and
other issues?

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