OECD Insights

English
ISSN: 
1993-6753 (online)
ISSN: 
1993-6745 (print)
DOI: 
10.1787/19936753
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OECD Insights are a series of reader-friendly books that use OECD analysis and data to introduce some of today’s most pressing social and economic issues. They are written for the non-specialist reader, including interested laypeople, older high-school students and university freshmen. The books use straightforward language, avoid technical terms, and illustrate theory with real-world examples. They also feature statistics drawn from the OECD’s unique collection of internationally comparable data. Online, you can find a number of special features to enhance each book’s educational potential.

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Economic Globalisation

Economic Globalisation

Origins and consequences You or your institution have access to this content

English
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    http://oecd.metastore.ingenta.com/content/0111111e.pdf
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Author(s):
Jean-Yves Huwart, Loïc Verdier
11 Apr 2013
Pages:
156
ISBN:
9789264111905 (PDF) ;9789264111899(print)
DOI: 
10.1787/9789264111905-en

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Few subjects are as controversial – and poorly understood – as globalisation. While in its broadest sense, economic globalisation is as old as trade itself, the recent financial crisis has amplified the complexity associated with the global interconnectedness of the world’s economies and its ramifications on our livelihoods.

This publication reviews the major turning points in the history of economic integration, and in particular the pace at which it has accelerated since the 1990s. It also considers its impact in four crucial areas, namely employment, development, the environment and financial stability: does globalisation foster development or create inequality? Does it promote or destroy jobs? Is it damaging to the environment or compatible with its preservation? Are we heading towards de-globalisation or can globalisation in fact enable recovery?

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  • Foreword

    International trade, migration and globalised finance are the ingredients of a cocktail named globalisation, the recipe of which we haven’t yet mastered and the taste of which we may, if we’re not careful, find bitter.

  • Introduction

    Economic globalisation is highly controversial – even more so since the recent global economic crisis. "Pro-globalists" and "anti-globalists" (also known as "alter-globalists") have hotly debated the issue for a good twenty years. Most of this planet’s inhabitants experience some of the considerable benefits and also the tragic downside of globalisation in their daily lives. It is essential to trace the history of this complex phenomenon and the various forms it takes if we want to tackle the challenges it brings in its wake.

  • The merchant, the inventor and the sovereign (from the Neolithic period to the Second World War)

    Economic globalisation in the broadest sense is as ancient as commercial trade. It resulted from a combination of dynamic merchants seeking new markets outside their own borders, improved transportation and communication techniques, and political desire to foster foreign trade – all of which occurred to different degrees at different points in time over the centuries.

  • Growing economic integration in a divided world (from 1945 to the 1990s)

    Despite rivalries between ideological blocs, international trade recovered spectacularly in the post-war era. Western trade liberalisation occurred in a multilateral context which, combined with advances in transportation and communication modes, created an ecosystem favourable to increasingly intertwoven economies. This ecosystem allowed companies to develop their activities beyond borders. Multinationals were very important in helping to shape the face of globalisation.

  • A global or semi-global village? (1990s to today)

    There was an unprecedented integration of world economies in the 1990s under the combined infl uence of the opening of Communist Bloc countries to the market economy and the ICT revolution. Goods and capital, with a few exceptions, underwent massive globalisation. Services and workers experienced more limited globalisation, despite growth in some areas.

  • Does globalisation promote development?

    Globalisation first promoted the development of industrialised countries, then, in the past 20 years, that of emerging countries. While some developing countries are following in their footsteps, others have become marginalised or weakened by opening to international markets. Extreme global poverty has diminished, but is still ingrained in certain regions. In many countries, inequalities have deepened. Globalisation can only promote development if certain political conditions are combined.

  • Does globalisation promote employment?

    Even though competition from low-wage countries has some negative effects on employment in OECD countries, the link between globalisation and job losses is less obvious than it first appears. In times of economic shock such as the recent recession, globalisation seems to create more jobs overall than it destroys. Likewise, the total increase in wage inequality of the past two decades seems more linked to technology and legislation than globalisation – which does nevertheless undeniably contribute to increased job insecurity in some cases. The challenge is to help the losers of globalisation stay in the race and seize the new opportunities offered by openness to international trade.

  • What is the impact of globalisation on the environment?

    Globalisation helped accentuate the major environmental damages we’re experiencing today, even though it’s only indirectly responsible. Some national, regional and international policies have attenuated the negative effects of globalisation on the environment. Some solutions can also be found in the mechanisms of globalisation itself. But while vital, political regulations and incentives are still lacking compared to the breadth and urgency of the challenges ahead.

  • The 2008 financial crisis – A crisis of globalisation?

    The 2007-08 financial crisis affected many countries simultaneously and led to a global economic crisis unseen since the Great Depression. It was triggered by a proliferation of financial products linked to risky mortgage loans. The crisis seriously called into question financial globalisation, which to a certain extent amplified risks linked to banking activities and financial markets and brought about financial imbalances among leading economic powers. The question of what rules should apply to global financial activity is crucial in channelling the risks inherent to globalisation.

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