Assignment 4 Society and Business
Globalization
Globalization refers to “the growing interdependence of countries resulting from the increasing integration of trade, finance, people, and ideas in one global marketplace” (WebFinance, Inc, 2013). The main reasons for this integration come from international trade and cross-border investment.
After World War II, globalization has accelerated considerably, and there are two factors that are the main reason for this. The first involves the lowering of the costs of transportation, communication, and computation in different countries due to technological advances. This often makes it more feasible economically for a firm to have different phases of production in those countries. The other factor has to do with the increasing liberalization of trade and capital markets. More and more governments are refusing to protect their economies from foreign competition or influence through import tariffs and nontariff barriers such as import quotas, export restraints, and legal prohibitions (Rodrik, 1998).
A number of international institutions established in the wake of World War II, including the World Bank, International Monetary Fund (IMF), and World Trade Organization (WTO) have played an important role in globalization and the promotion of free trade. Each one had a different impact on aiding developing countries and in promoting a more balanced world.
The World Bank was started to “provide economic development loans to its member nations” (McGraw-Hill, 2013. P 153). Mostly the loans are used to finance developmental projects such as building roads, power plants, schools, dams, bridges, and other important missions. There are very strict conditions that are connected with the loans that are borrowed by countries, such as spending cuts by the government and increasing the amount of exports they provide. Some of these restrictions cause tension and a feeling of burdening on less developed countries, and it is argued that they should be eliminated from the
Globalization refers to “the growing interdependence of countries resulting from the increasing integration of trade, finance, people, and ideas in one global marketplace” (WebFinance, Inc, 2013). The main reasons for this integration come from international trade and cross-border investment.
After World War II, globalization has accelerated considerably, and there are two factors that are the main reason for this. The first involves the lowering of the costs of transportation, communication, and computation in different countries due to technological advances. This often makes it more feasible economically for a firm to have different phases of production in those countries. The other factor has to do with the increasing liberalization of trade and capital markets. More and more governments are refusing to protect their economies from foreign competition or influence through import tariffs and nontariff barriers such as import quotas, export restraints, and legal prohibitions (Rodrik, 1998).
A number of international institutions established in the wake of World War II, including the World Bank, International Monetary Fund (IMF), and World Trade Organization (WTO) have played an important role in globalization and the promotion of free trade. Each one had a different impact on aiding developing countries and in promoting a more balanced world.
The World Bank was started to “provide economic development loans to its member nations” (McGraw-Hill, 2013. P 153). Mostly the loans are used to finance developmental projects such as building roads, power plants, schools, dams, bridges, and other important missions. There are very strict conditions that are connected with the loans that are borrowed by countries, such as spending cuts by the government and increasing the amount of exports they provide. Some of these restrictions cause tension and a feeling of burdening on less developed countries, and it is argued that they should be eliminated from the
References: Investopedia, Inc. (2013). Definition of World Trade Organization (WTO). Retrieved from: www.investopedia.com/terms/w/wto.asp McGraw-Hill Create. (2013). Business and Society. McGraw-Hill Companies. United States. p. 152-154. Rodrik,R. (1998). Has Globalization Gone Too Far? Washington D.C. Institute for International Studies. WebFinance, Inc. (2013). Definition of Globalization. Retrieved from: www.businessdictionary.com/definition/globalization.html