THE
GLOBAL
ECONOM
Economic
Globalization
• Economic globalization refers to the
increasing interdependence of world
economies as a result of the growing
scale of cross-border trade of
commodities and services, flow of
international capital and wide and
• Economic globalization is
driven by the “growing scale of
cross border trade of
commodities and services”
(Shangquan, 2000:1)
Economic
Integration
- means that separate
production or service. This
requires efficient management of
economic operations from
different areas of the world. In
current times, this is made
possible by innovations in
transport logistics,
modernization of communication
and transport systems, policies
supporting integration of
Various Definitions of
the Economic
Globalization
Focus on increasing economic trade interrelations among
countries (Steger, 2010; Al-Rodhan, et al., 2006; Shangquan,
2000). This is governed by neoliberal principles with the role
of the market as a central driver of economic activities, with
less government interventions (Martin, Schumann, and
Camiller, 1997). Economic globalization entails global
industrial restructuring and readjustments where developed
countries play a dominant role (Shangquan, 2000:3).
Who are the Actors
that Facilitate
Economic
Globalization?
• International Monetary Fund (IMF),
World Bank, and Organization for
Economic Cooperation and
Development (OECD).
These organizations are critical in developing
and pushing for neolibereal policies among
different countries. They also help facilitate
trade and development discussions among
various states.
• Another example are regional
organizations such as the Association
of Southeast Asian Nations (ASEAN)
and North American Free Trade
Agreement (NAFTA).
These organizations promote regional
agreements and standards that facilitate better
trade and exchange of knowledge, human
resources, and regional cooperation.
• Group of 8 (G8) and G20
Advisory organizations that discuss current
economic and political problems and transfer
the ideas from the groups’ forum to national
legislative regulations (Shangquan, 2000:280)
• Multinational Companies
(MNCs)
Considered to be the main carriers of economic globalization
(Shangquan, 2000:2). In 1996, there were 44,000 MNCs in the
world with 280,000 overseas subsidiaries and branch offices
(ibid). In 2006, there were 88,000 MNCs identified (UNCTAD,
2007). In earlier times, trade companies such as the Dutch and
British East India, Muscovy Company, Royal African Company,
and Hudson Bay Company were precursors of the modern day
MNCs (Hirst & Thompson, 2002). MNCs started to emerge during
World War II when US industrial production increased by 44
percent (Strange, 1996).
• Central Banks
They are considered one of the most
powerful institutions in the world economy
since they can lead economic development,
and some authors contend that central bank
governors are more influential in their own
national economy than some politicians
(Shangquan, 2000: 280).
• Global Civil Society
Major driver of economic globalization. The global civil society has
made its mark in global development arena particularly during the
UN Conference on Environment and Development in 1992
(Keane,2003). Global civil society seen as either composed of
individuals or groups of individuals disadvantaged by the effects of
globalization of the world economy, they protest and seek
alternatives while on the other hand, global social movement
constituting a basis for an alternative to a new world order
(Gherghel, n.d). Part of the global civil society are Transnational
Advocacy Networks (TAN), networks which are “organized to promote
causes, principled ideas, and norms, and they often involve
individuals advocating policy changes that cannot be easily linked to
• International Monetary
Fund ( IMF )
The IMF is an international
organization of 183 member
countries to promote international
monetary cooperation and exchange
stability; to foster economic growth
and high employment; and to provide
short-term financial assistance to
countries to help ease balance of
payments adjustments (IMF, 2019).
• International Financial Institutions (IFAs)
The generic name given to all financial
institutions operating on an international
level, ranging from development banks,
such as the World Bank and the European
Bank for Reconstruction and Development
(EDB), and monetary authorities, such as
the International Monetary Fund. These
organizations give loans to governments for
large-scale large-scale projects, p
restructuring and balance of payments on
condition that they make specific changes
• Transnational Corporations
"Enterprise that
engages in activities
which add value
(manufacturing,
extraction, services,
marketing, etc.) in
more than one
• G8 and G20
Group of nations that
serve as an advisory
organization that
discuss current
economic and political
problems and transfer
the ideas from the
• Global Civil Society
Either composed of individuals or
groups of individuals disadvantaged by
the effects of the globalization of the
world economy, they protest and seek
alternatives while on the other hand,
global social movement constituting a
basis for an alternative to a new world
What is the Modern World
System?
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