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Economic Inequality as a Result of Globalisation Essay

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Updated: May 20th, 2020

The gap between the rich and the poor had its beginning with the initiation of industrialisation. The acceleration of development of rich countries has resulted from the capacity to have imperial states. It is from this state of affairs that England has grown to be a super power while Asia and Africa are now reduced to producers of raw materials and markets of final products.

The economic inequality is as old as globalisation. The historical studies on this aspect of development indicate a relation between globalisation and disparity. This is shown by the lack of trend in economic disparity in the pre-globalisation period and the acceleration of disparity during and after globalisation. Globalisation is synonymous with economic liberalisation. The economic liberalisation that results from globalisation subjects economies to stronger and more intense market forces. It is imperative to note that in a highly competitive global market, weaker economies lose in competition and therefore experience decline of the economic progress.

The negative consequences of globalisation were not anticipated at its inception. Policy makers did not consider the possible inequality that would result from globalisation. The trend of growth of inequality has risen since the late 1800s when globalisation began. The rise in inequality has evidently been a threat to poverty reduction targets. This has necessitated the call for more adept pro-growth policies to help save the falling economies.

There is also the divergence of sources of inequality from usual sources with the new causes being linked more to the globalisation of world economies. The persistent nature of inequality has hampered poverty eradication measures. Causes of inequality being evident in Asia and Africa are identified as products of economic liberalisation. The economic reform policies made by Asian, India and Arab economies are their own undoing and the main course of their debilitated state.

The inequality that results from globalisation is more intense when comparing inter-country inequality with intra-country inequality. I am of the opinion that globalisation has different effects for intra-country inequality, which depends on the dimension of globalisation involved. The impacts also depend on the changes in policy that the countries make in acceptance to globalisation. In Asian and Arab economies, particularly after the Second World War, inequality accelerated because of the non-democracy, inferior education systems, and violent government institutions. The quality of governance varies in systematic ways. The European countries have better governments than Asian countries do. They are therefore more strategically ready to counter the negative effects of globalisation.

Currently, the trend of inequality is on the decline as more financial and commercial integration is endorsed. The stabilising role of governmental innovations has had a positive effect on reversing inequality with continued globalisation. In the case of smaller and lower income economy as most of African states, the threat of inequality is still real. This is mainly caused by natural causes, such as natural calamities, or by poor governance of these states and to a less extent by globalisation.

In conclusion, it is fair to state that globalisation and economic inequality are perceptibly related. Increased globalisation results into increased inequality. Globalisation has resulted in inter-country inequality but its impact on intra-country and income inequality is still questionable. Other causes of inequality are non-democratic governance, poor education policies and violence. Before, during and after globalisation, this difference in economic trend indicates the change in economic patterns of the world.

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IvyPanda. 2020. "Economic Inequality as a Result of Globalisation." May 20, 2020. https://ivypanda.com/essays/economic-inequality-as-a-result-of-globalisation/.

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IvyPanda. (2020) 'Economic Inequality as a Result of Globalisation'. 20 May.

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