Globalization

POLS 184

Globalization has caused uneven effects throughout the world. The wealthier countries are getting richer and the less developed countries are becoming poorer. Economic integration and trade liberalization have produced an unstoppable movement toward economic globalization, resulting on the modernization and growing wealth of the industrialized countries. But many less developed countries (LDCs) have been left out or have been harmed by globalization.

The principal trend that has made globalization so popular after World War Two has been international trade. Growing trade has increased the variety of goods, services, direct investment and finance in the world. However, many countries from South Asia, Sub-Saharan Africa and Latin America have been left out in the process. The benefits of expanding trade have been concentrated in the United States, Europe and Japan. Usually lesser developed countries do not have enough purchasing power and have to increase their international debts to be able to participate in this so called globalization. As a result industrialized countries become more powerful, and is easier for them to influence the developing world. Also goods are being unequally distributed between economically developed countries (ELCs) and LDCs, while stores in the United States for example have to trough away food in order to maintain the prices and prevent inflation, countries in Africa have starvation problems.

Globalization has also increased inequality in the international distribution of income. Between 1960 and 1994 the share of developed countries in the global distribution of wealth declines. This can partly be explained by the growing impact of multinational corporations that funnel profits to the parent country and allocate the highest wages to highly trained managers