Globalisation

Globalisation

1. The ever-increasing integration of the world's economies, through increased flows of trade, knowledge and people across borders

2. Causes

   • Growth of trading blocs e.g. EU, NAFTA
   • Reduction in global tariffs post-WW2, encouraging trade
     • World Trade Organisation
       • World Trade Organisation
   • Improved communication e.g. the internet
   • Faster, cheaper transport of goods
   • Growth of multinational companies
   • Collapse of communism and emergence of BRIC nations
   • The relaxation of visa regulations e.g. freedom of movement in EU
   • Reduction and removal of controls on the flow of capital

3. Pros

   • Lower prices and increased consumer choice
   • Expansion in the productive capicity of the global economy
   • Greater freedoms
   • Free movement of labour helps to fill skills gaps
   • More cultural diversity and greater tolerance
   • 'Trickle down effect' and foreign direct investment (FDI) in LEDCs
     • Creates employment
     • Raises living standards

4. Cons

   • Exploitation of workers in less developed countries e.g. Foxconn
   • Developing countries not benefitting as much?
     • Growth of MNCs monopolising markets
     • EU CAP discriminates againsts producers in LEDCs
     • WTO dominated by richer nations
   • 'Brain drain' from developing countries
   • Environmental exploitation by MNCs in developing countries
   • Free movement of capital has led to MNCs avoiding tax liabilities
   • Risk of rapid transmission of shocks e.g. credit crunch
   • Has imposed adjustment costs e.g. imposition of capitalist values on traditional cultures, loss of manufacturing in developed nations

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