Advantages and Disadvantages of Globalization

Advantages and Disadvantages of Globalization

There are different views about the origins and causes of globalization. Regardless of such, it cannot be denied that this process of global integration and interconnection has contributed significantly to the advancement of modern civilization. Aside from its positive contribution to economic progress across the world, it has also resulted in global cooperation that has resulted in better international relations and the further expansion of human knowledge.

However, globalization has its fair share of criticisms due to its purported drawbacks and unintended consequences. These include concerns over alleged exploitation and excessive mediation by more powerful international actors, the disintegration of traditional and localized cultures and traditions, promotion of cross-border conflicts due to differences and power imbalances, and exacerbation of environmental issues.

The Advantages of Globalization: Significance and Contributions

1. Global Economic Progress Through the Expansion of Global Markets and International Trade, Promotion of Comparative Advantage, and Cross-Border Expansion of Businesses

One of the obvious advantages of globalization and by extension, one of its major contributions, centers on its positive contribution to advancing economies across the world. Note that globalization is primarily an economic process that has enabled the integration of different economies through the expansion of global markets and international trade.

The process has been instrumental in accelerating the cross-border movements of goods, services, information or knowledge, technology, and capital. A working paper by Fredrick Erixon of the European Centre for International Political Economy highlighted the specific contributions and benefits of globalization.

For starters, it has boosted output in the Western economy by enabling businesses to specialize while increasing innovativeness and expanding access to capital, allowing new entrants to compete with old incumbents, thereby lowering the barriers to entry, and creating employment both in the export and import trade sectors.

Another advantage of globalization centers on its impact at the microeconomic level. Erixon noted that it is responsible for reducing high inflation rates while increasing real wages by lowering the cost of consumption. It is also instrumental in reducing gender wage discrimination, advancing management capabilities, and improving working conditions.

Businesses have also expanded their operations and market reach outside their local borders due to the policies adopted by numerous countries. Prime examples include the expansion of the American fast-food chains such as McDonald’s, the global availability of products from Apple and non-American companies such as Samsung.

Another benefit of globalization rests on the creation of opportunities to address socio-economic problems in underdeveloped and developing countries through aid and other forms of assistance from government and non-government organizations. These problems range from poverty and hunger to lack of infrastructure and poor access to social services.

2. Social and Political Advantages of Globalization as Evident from the Creation of International Organizations and Intra-Governmental Policies and Standards

The emergence of a global political system is another advantage of globalization. A specific consequence of global integration and tighter international relations is that it has lessened the importance of the nation-state and absolute sovereignty due to the growing interdependence of governments to meet their shared political goals and objectives.

A noteworthy example is the establishment of the United Nations in 1945. The purpose of this intergovernmental organization is to promote international peace and security, develop friendly relations among nations, and foster international cooperation to address social and political problems that are affected or could affect its member states.

The European Union, Association of Southeast Asian Nations, the Organization of Islamic Cooperation, the African Union, Union of South American Nations, and the Arab League are some of the notable intergovernmental organizations with goals and objectives centered on promoting intergovernmental cooperation among its member countries.

Forming coalitions with other governments can have specific benefits. These include access to multilateral cooperation concerning international trade and regional politics, establishing a military alliance to promote national and regional peace and security, and access to resources and knowledge needed to make informed political and economic decisions.

Note that the North Atlantic Treaty Organization or the North Atlantic Alliance is a specific intergovernmental military alliance among European and North American countries. Its establishment demonstrates another specific advantage of globalization: the creation of a powerful military alliance for collective defense.

A specific regional military alliance can promote peace and security within a particular region while also providing an added layer of protection to disadvantaged countries with limited military capabilities. Furthermore, several different alliances can also promote further geopolitical stability through balance of power and deterrence.

Of course, apart from political and military alliances, other intergovernmental organizations have been created to address specific issues or focus on a particular concern. As an example, some of these organizations, such as the Africa Rice Center and the Asia-Pacific Fishery Commission, have been created to tackle policies related to food production.

3. Cross-Cultural Benefits Through the Cross-Border Movement of People and International Scientific Revolution Through Knowledge and Technological Exchanges

Globalization has also been instrumental in spreading cultural items such as ideas, values, styles, religions, technologies, and languages, among others. A prime example is music. Music from North America and Europe has dominated the global pop music scene. However, music from Asian countries such as South Korea has also taken center stage.

Sports is another example The process of global integration has advanced different fields through the internationalization of competitions. These include the Olympics Games, which is participated by athletes from more than 200 countries, as well as regional competitions such as the SEA Games, and special sports events such as the Paralympics.

Phenomena such as cross-border movement of people and digital communication technologies have contributed to the spread of culture. Some individuals have earned multiple citizenship while others have more freedom to move from one country to another due to the developments in modern transportation and policies related to migration.

The internet has been attributed to the increase of cultural values while challenging the status quo in several communities. These include the emergence of global movements and advocacies aimed at promoting civil rights, including the causes of women and members of the LGBTQ+ community, as well as democratic principles.

Modern developments in the different fields of science are attributed to globalization. The process of global integration has made it easier for individual scholars and researchers, as well as educational institutions, research organizations, and business organizations, to collaborate in research pursuits and exchange knowledge and technical expertise.

The positive impacts of globalization in science and technology have been evident from the global COVID-19 pandemic. The global medical and scientific community was quick to sequence the SARS-CoV-2 and provide a sufficient level of understanding as regards the characteristics of the disease in less than three months.

Furthermore, the global pandemic due to SARS-CoV-2 demonstrated the capabilities of governments, specific governmental organizations, intragovernmental organizations, research institutions, and business organizations to develop and deploy standardized therapies, vaccines, and other relevant antiviral medications.

The Disadvantages of Globalization: Consequences and Criticisms

1. Limited Economic Benefits of Globalization As Evident From the Prevalence of Wealth Poverty and Pervasiveness of Exploitation in Other Regions of the World

While it is true that economic globalization has positive impacts on localized economies, the benefit seems to be limited. A 2014 empirical study by P. Samimi and H. S. Jenatabadi that investigated economic growth in the Organization of Islamic Cooperation countries showed that the economic benefit of globalization depends on income level.

Specifics of the findings further revealed that high-income and middle-income benefited the most while low-income countries did not experience significant gains. It is interesting to note that these low-income countries must first attain a particular income level before they can receive the assumed economic gains from globalization.

The integration of economies into a single global economic system has also increased the risks to exposure from localized economic crises. This is another notable disadvantage of globalization. A prime example is the 2008 Financial Crisis that started in the United States as a housing problem that evolved into a localized subprime mortgage crisis.

Financial institutions and other business organizations in other countries with significant exposure to American banks eventually succumbed to the banking crisis in the United States, thereby triggering a chain of events that resulted in a global financial crisis. The Eurozone Debt Crisis is also another noteworthy downside of economic integration.

From a business perspective, although several businesses have indeed benefitted from global expansion, for local and smaller businesses, the arrival of deep-pocketed multinational companies increases the intensity of competition. These local businesses will be competing not only for customers but also for suppliers, talents, and other resources.

A 1999 Harvard Business Review article by Niraj Dawar and Tony Frost noted that multinational companies have inherent competitive advantages over local businesses. These include substantial financial resources, advanced technology and operational efficiency, superior products and powerful brands, and seasoned marketing and management skills.

The arrival of multinational companies can result in either of the two: either acquire local businesses at an attractive price to obtain their existing customer bases and secure their market share or completely kill a local industry. Of course, it is worth mentioning that in some industries or sectors in specific regions, homegrown businesses have strived and survived.

2. Increased Tendency Toward Conflicts Due to Cross-Cultural Interaction and Power Imbalance Between Larger International Actors and Local Communities

There are several reasons why globalization can also result in conflicts. Researchers N. S. Chaudhary and R. Yadav, in their position paper about multicultural organizations, explained that cultural diversity may result in conflict between individuals or social groups separated by cultural boundaries. This is called cross-cultural conflict.

Furthermore, because the process of global integration includes the process of migration and in some instances, involuntary emigration, it can also result in racism and fears toward immigrants due to a misplaced sense of nationalism. Conflicts occur between different cultural groups because when two of them meet, they tend to fight for dominance.

The exploratory report by P. O. Sijuwade mentioned that globalization should transcend beyond simply physically linking the world together. For it to become advantageous, there is a need to develop and promote a culture that can address diverse economic, ethnic, political, racial, and religious backgrounds, thereby creating a shared cultural understanding.

Some critics have also noted that forces of economic globalization cause armed conflicts. B. M. Pollins explained that global integration has a pacifying effect in global politics but has also resulted in an increase in the costs of using armed force due to the resulting tensions and the creation of factions born from increasing global interconnection.

An article from the International Herald Tribune and republished by the New York Times by economist Daniel Altman, that apart from extinguishing local cultures and enabling transnational crimes, the globally integrated economy could lead to modern armed conflicts. Globalization has created scarcity, and scarcity has been considered a cause of conflicts.

Globalization could also be responsible for the emergence of a new class of wars. Conflicts might arise between the cosmopolitan citizens of the world and those left out by economic and social integration. Communities or groups that are unable to benefit from global integration may develop resentment that could be manifested through violence.

The Trilemma of the Global Economy Theory developed and proposed by Turkish economist Dani Rodrick in his 2000 paper can also explain how globalization can fuel conflicts. The theory argues that a country can have two of the three options available: international economic integration, democracy, and the nation-state.

If it chooses to participate in the global economy, it would need to comply with the policies set by supranational organizations, thereby making it impossible for it to maintain either its democratic status or its sovereignty as a nation-state. Pursuing nation-state and global economic integration would result in its citizens losing decision-making capacity.

The absence of absolute sovereignty and decision-making capacity would not sit well in some groups within the greater community of a particular country. It is important to highlight the fact that the emergence of radicalism in the Near East and the Middle East has been attributed to the encroaching influence of Western countries such as the United States.

3. Undesirable Implications to Public Health Due to Transmissible Diseases and Negative Impacts to the Environment Due to Resource Exploitation

Another striking disadvantage of globalization is that it increases public health risks. The COVID-19 pandemic is a testament to this fact. Note that the disease originated in Wuhan City in the Hubei Province in China in late 2019. The disease quickly spread outside mainland China in a matter of months due to the cross-border movements of people.

Remember that the COVID-19 pandemic has affected the entire world and has resulted in millions of deaths. Furthermore, the severity of the global public health crisis resulted in lockdown measures, restriction of movements, and severe economic downturns that affected businesses, industries, and different financial markets across the world.

Of course, apart from the risks of pandemics due to novel diseases, another disadvantage of globalization centers on its negative environmental impacts. Several environmental activists and critics have blamed the process of global integration as one of the major causes of the most pressing environmental problems that are endangering the future of the world.

Researchers M. Bu, C. T. Lin, and B. Zhang used the KOF Globalization Index in a panel data sample of 166 countries over a period spanning from 1990 to 2009. Findings from their study showed that overall carbon emissions rise with higher levels of economic, social, and political globalization, especially among countries that are part of OECD.

The negative environmental impacts of globalization also affect public health. M. Ashrafuzzaman and G. L. Furini noted that vector-borne diseases affecting the human population have been linked with changing weather patterns. A prime example is the rise of dengue and malaria cases in underdeveloped and developing countries.

Furthermore, because global economic integration has intensified international trade and has driven consumerism that resulted further in hyperconsumerism, it has resulted in the exploitation of natural resources and the generation of wastes. These phenomena are prevalent in the modern linear economic model of most developed and developing countries.


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