ECONOMIC GLOBALIZATION
•it is also referred to as world economy. It
refers to the international exchange of
goods and services that is expressed in
monetary units of money.
Cross-border flows of good Capital
and services
People Ideas
DEFINITION OF
ECONOMIC
GLOBALIZATION
•The International Monetary Fund (IMF)
-as a historical process representing the result of
human innovation and technological progress.
❑ There are various changes and improvements that
characterize economic globalization past and present.
Two Major Driving Forces for Economic
Globalization:
1. The rapid growing of information in all
types of productive activities.
2. Marketization
Dimensions of Economic
Globalization
1. The globalization of trade of goods and
services
2. The globalization of financial and capital
markets
3. The globalization of technology and
Difference between Economic Globalization from
Internationalization:
• Economic Globalization – a functional integration
between internationally dispersed activities which means
that it is a qualitative transformation rather than a
quantitative.
• Internationalization – an extension of economic
activities between internationally dispersed activities.
Origin of Economic Globalization
• In the 16thcentury world system analysts identify the
origin of modernity and globalization through long
distance trade.
• In the 17th and 18th century global economy exists only
in trade and exchange rather than production as the
world export to World GDP did not reached 1 to 2
percent.
• In the 19thcentury the advent of globalization
approaching its modern form is witnessed.
• Global economy in the 19th and 20th centuries grew
by an average of nearly 4 percent per annum.
THE MODERN WORLD
SYSTEM
• Immanuel Wallerstein researched on the
modern world system. His analysis focused on
the broad economic entity with a division of
labor that is not circumscribed by political or
cultural boundaries.
• His idea of the world system is larger than workers, classes, or even
states. Through the global economic activity, countries around the
world have been divided according to their economic power in the
global arena.
• The modern world-system is also known as
the modern capitalist world economy . It is a
system which relies on economic
domination.
THE THREE LEVEL HIERARCHY OF THE
MODERN CAPITALIST WORLD-ECONOMY
• Based on the Wallerstein’s World System Theory
Model, the world is now divided into three categories
and These are:
• CORE
• PERIPHERY
• SEMI-PERIPHERY
CORE
•These are areas that dominate the capitalist
world-economy and exploit the rest of the
system.
• United States of America
• Canada
• Germany
• Australia
• Japan
• New Zealand
PERIPHERY
• These are areas that provide raw materials to the core
and are heavily exploited.
• Malaysia
• African Region
• Latin America
• Philippines
• Cambodia
• Bangladesh
• Poland & Eastern Europe
SEMI-PERIPHERY
•It is a residual category that encompasses a set of regions
somewhere between exploiting and the exploited.
•They often also served as buffers between the core and
the peripheries.
•India
•Indonesia
•China
•Brazil
•Iran
•Mexico
•The international division of exploitation is
defined not by state borders but by the economic
division of the world.
•geographical expansion
• worldwide division of labor
• In maintaining a good balance between maintaining
state powers and being part of the modern
world-system, the states must be strong enough to
protect their own economies from external threats.
• However, this strength of theirs which comes from,
perhaps, their external sovereignty should not be too
much for them to be able to stand on their own and
refuse to act in accord with the demands of the
capitalist world economy.