The post addresses the pros and cons of globalization from the perspective of a positive impact on poverty and free trade. According to Bergh, Mirkina, and Nilsson (2015), while most researchers suggest such positive outcome of globalization, many of them fail to account for the institutional aspect that may obstruct globalization. The authors argue that such positive results can be achieved even in countries that have weak institutional establishments and those that are subjected to corruption and low social accountability. Based on this evidence, one can argue that globalization can help countries and people by creating equality and transparency.
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Another aspect of these global change affects both business and political environments in countries. Fox (2016) argues that the Internet and e-commerce are the primary drivers of globalization that will help enable free trade between states. Thus, individuals will be able to work remotely and purchase goods from other countries through online platforms, which allows businesses to hire a more diversified and skilled workforce. In addition, this provides an opportunity for online retailers to reach new markets and increase their revenue. However, Fox (2017) states that politicians are pointing out the social impact of globalization.
It is due to the fact that mitigation of sovereignty will result in a lesser effect that governments have on events. Additonally, Stiglitz (2017) states that the concept in question did not get an appropriate evaluation from experts and thus most estimations in regards to economic growth. In general, the issues connected to resource allocation, value taxes that are important for the economies of many countries, and employment of people from developing countries are the problems of globalization that require additional research.
This post emphasizes the fact that globalization as a concept involves a variety of models and approaches that affect different aspects of life. While in theory, the process can prove to be beneficial for all counties with time, it is necessary to review the particular implications of it, especially for the developing countries. Practices applied for resource allocation are significantly affected by globalization.
Erixon (2018) states that this process helped the Western countries develop by controlling inflation and enhancing people’s ability to establish companies. Thus, both businesses and consumers experience the positive effects of globalization. In addition, economically well-developed states can invest in other countries and create jobs there, which is another positive effect. However, there are several adverse impacts of this concept that should be reviewed as well.
Developing countries may be subjected to the adverse outcomes of the globalization process. Bonilla (2016) argues that international non-profit organizations such as the World Bank encourage states to illuminate obstructions for free trade such as tariffs, which should help their economies grow. However, the practice allocating resources and hiring people in economically underdeveloped states affects the gap between the rich and poor people.
This social impact is the primary concern and danger of globalization. Mahawar (2015) argues that this process threatens cultures of developing countries because due to the nature of this concept people aim to incorporate characteristics of well-developed nations in their daily lives. In addition, the author states that despite globalization countries in Africa are still considered to have the highest poverty rates in the world. Therefore, in some cases, nations do not benefit from globalization because of the low wages and quality of life are exploited to produce goods at lower costs.
Bergh, A., Irina Mirkina, I., & Nilsson, T. (2016). Do the poor benefit from globalization regardless of institutional quality? Applied Economics Letters, 23(10), 708-712. Web.
Bonilla, X. M. (2016). The effects of globalization on developing countries. Web.
Erixon, F. (2018). The economic benefits of globalization for business and consumers. Web.
Fox, L. (2016). Don’t blame globalisation for poverty. The Guardian. Web.
Mahawar, M. K. (2015). Social impact of globalization on developing countries. International Journal for Innovation Research in Multidisciplinary Field, 1(3), 127-132.
Stiglitz, J. (2017). The overselling of globalization. Business Economics, 52, 1-9. Web.