The discussion on globalization and education spending as viewed through the Hecock analysis of Mexico seems to become an analysis of democratic qualities and there relation to market forces: the outspoken teacher’s unions responding to low wages or leaders soliciting electoral approval by increasing social spending--the presence of either phenomenon requiring the competition and transparency of democracy. The other variables included economic indicators like GDP growth and FDI per capita, two things related to trade liberalization and economic globalization. In looking for related literature, I tried to focus on “globalization” and “education spending”. The findings seem mostly related to the effect of IGO policy and domestic response; however, looking for neoliberalism and education provides a more dynamic look at the effects discussed in Hecock.
Nooruddin, Irfan; “The Politics of Hard Choices: IMF Programs and Government Spending”, International Organization vol. 60, Fall 2006 pp. 1001-1033
In concluding Hecock says that the left-wing union had a strong positive impact on increasing government investment in education, whereas the presence of a governor ideologically supportive of education spending had a weak positive relationship. Nooruddin looks at the relationship between IMF programs and domestic governance. He shows that IMF loan reduction programs actually cause governments to reduce social spending, and counterintuitively the effect is larger in democratic countries than in nondemocratic ones. He argues that democracies “decrease spending on those programs with the least organized interests”. In the cases of developing countries, social services are often in this category.
(If developing democracies spending less on education and opening markets for international services (i.e. GATS), would that allow international education companies to fill the gap? If so, would private education be filling gaps or making them? )
Hill, Dave; Global Neoliberalism and Education and its Consequences, Routledge New York, NY, 2009.
Hecock’s research did not take into consideration the individual cost of education past the point of government funding. If economic globalization pressures for privatization of education as is argued in Dave Hill’s Global Neoliberalism and Education and its Consequences, then the role of government investment becomes increasingly negligible (or the most important depending on your view). These works link economic globalization wrapped in a political policy of democracy, opening and reform that causes gaps in access to quality, affordable education.
The book goes into great detail about the many aspects of new trends in the privatization of education: the effect of profit motive on higher education; the multifaceted effect of GATS on the developing countries; and the World Bank discourse on education and its implications on education policy.
Lheem, Han Gyu and Sujian Guo. “Political Economy of FDI and Economic Growth in China: A Longitudinal Test at Provincial Level.” Journal of Chinese Political Science. Vol. 9, No. 1, Spring 2004. http://bss.sfsu.edu/sguo/My%20articles/FDI%20in%20China_2004.pdf
Directorate for Financial, Fiscal and Enterprise Affairs. “Main Determinants and Impacts of Foreign Direct Investment on China’s Economy.” Working Papers on International Investment. Number 2000/4. December 2000. http://www.oecd.org/dataoecd/57/23/1922648.pdf
Tang, Sumei; E. A. Selvanathan; and S. Selvanathan. “Foreign Direct Investment, Domestic Investment, and Economic Growth in China: A Time Series Analysis.” UNU-WIDER. February 2008. Research Paper No. 2008/19. http://www.wider.unu.edu/publications/working-papers/research-papers/2008/en_GB/rp2008-19/
This paper looks at data on FDI in China from 1995-2000. It suggests that the positive relationship between FDI and economic growth may not be FDI driven. Instead, it suggests that it may be growth-driven; FDI may be attracted to countries that have high levels of economic growth. The paper sites Malaysia and Thailand as examples of this. It also suggests that China presents and example of a two-way causal relationship between FDI and economic growth. The differences in economic performance related to FDI from region to region are also pointed out. The relatively large amount of growth on China’s coastland is given explanation by the open-door policy, geographic situation, and Special Economic Zones there. The findings of the paper show that human capital did not have influence on the flow of FDI. It also finds that FDI distribution is affected by different factors on the regional and national level. The paper points out that the relationship between FDI and domestic savings has yet to be explained.
Directorate for Financial, Fiscal and Enterprise Affairs. “Main Determinants and Impacts of Foreign Direct Investment on China’s Economy.” Working Papers on International Investment. Number 2000/4. December 2000. http://www.oecd.org/dataoecd/57/23/1922648.pdf
This paper looks at FDI in China between 1979 and 1999. From 1992-1999 FDI was the main source of capital inflows. A vast amount of FDI went to southern and eastern China, though more moved toward central China over time. Most of FDI went gone into manufacturing and real estate. FDI also played a large role in stimulating industrialization in China. The research found that while FDI helped with China’s export market, in 2003 it was more domestic-oriented than export-oriented. It thus played a large role in decreasing China’s need for imports.
Tang, Sumei; E. A. Selvanathan; and S. Selvanathan. “Foreign Direct Investment, Domestic Investment, and Economic Growth in China: A Time Series Analysis.” UNU-WIDER. February 2008. Research Paper No. 2008/19. http://www.wider.unu.edu/publications/working-papers/research-papers/2008/en_GB/rp2008-19/
This paper looks at economic growth in China from 1978-2003. It attempts to determine the relationship that FDI has had with China’s economic growth. The findings suggest that while FDI has certainly played a role in China’s economic growth, the role played by domestic investment has been larger. But it also finds that FDI has complementary effects on domestic investment, while domestic investment and GDP do not seem to have much affect on FDI. FDI, therefore, has been an important means of spurring on the economic growth of the country.
A World of Countries Only?
In his article, Waltz presents the two different views on the motivating and directing forces behind globalization. He argues that instead of being market-driven like Friedman holds, globalization is being led by, and will continue to be led by, states and their politics. While I found Waltz’s argument to be very persuasive, I felt like an important aspect of the current global state of affairs was missing. Waltz seemed to view the world as composed of individual, though interconnected, states and them alone. Not mentioned in his article were international groups, such as terrorist organizations. I would argue that groups like these will play a large part in influencing the direction that globalization will take as they will almost certainly influence both the politics and economics of countries.
Because terrorist groups are often multi-national, they could not truly be considered to be part of individual nation-states. They must therefore be seen as international, or global, groups. This is why I think that they should be considered in the discussion of globalization. While some terrorist groups have links to certain state and national governments, many (like Al Qaeda) do not. These groups may work with governments at certain points, but they remain separate entities. The goals of these terrorist groups are usually driven by ideologies, though they may have some political and economic goals as well. They do not fit nicely into the scheme that Waltz presents in his article. They lie outside the realm of nation-states and yet have a large effect on them.
Globalization in the past has paved the way for terrorists to be able to have the global influence that they do now. As transport costs have decreased, they have been able to travel easier and cheaper. The decrease in communication costs and the increase in communication technologies have made it easier for them to get in contact with each other and plan globally. The opening of national borders has allowed for them to travel internationally with less effort.
Terrorist groups’ aims are often ideological. Their enemies may be certain political groups, or they may be racial groups or religious groups. They may target the governments of countries in order to attack, symbolically or literally, the groups that they are against. The attacks that they carry out will certainly affect the countries in which they occur. They will have physical, emotional, political, and economic impact on these countries. Because of the interconnectedness of countries as a result of recent globalization, this will impact other countries as well. Economic systems around the world can be affected by an attack in one country. Countries’ relations with one another can also be affected. The existence of members of a terrorist group in one country can affect not only that individual country’s domestic policies, but also other countries’ policies towards that country. This will can affect global relations.
For example, the 9/11 terrorist attacks on the United States had a global impact. The United States’ economy suffered afterwards. This was felt to some extent by other countries that do business with the United States. The United States government felt the need to go after the terrorist group behind the attacks. This led to the war in Afghanistan and was also influential in leading to the war in Iraq. Obviously, Al Qaeda’s terrorist attack in the United States caused an international political issue. The United States also took measures to improve security and tighten its national borders in the wake of attacks. This also had an impact on international politics. I feel it can therefore be argued that groups like Al Qaeda at least have the potential to be international and global forces and influence the future of globalization.
I think that by not mentioning international terrorist groups in his article, Waltz missed an important component in the process of globalization. He did not take into account groups that are outside the borders of countries and yet have an impact on them, both politically and economically.
Because terrorist groups are often multi-national, they could not truly be considered to be part of individual nation-states. They must therefore be seen as international, or global, groups. This is why I think that they should be considered in the discussion of globalization. While some terrorist groups have links to certain state and national governments, many (like Al Qaeda) do not. These groups may work with governments at certain points, but they remain separate entities. The goals of these terrorist groups are usually driven by ideologies, though they may have some political and economic goals as well. They do not fit nicely into the scheme that Waltz presents in his article. They lie outside the realm of nation-states and yet have a large effect on them.
Globalization in the past has paved the way for terrorists to be able to have the global influence that they do now. As transport costs have decreased, they have been able to travel easier and cheaper. The decrease in communication costs and the increase in communication technologies have made it easier for them to get in contact with each other and plan globally. The opening of national borders has allowed for them to travel internationally with less effort.
Terrorist groups’ aims are often ideological. Their enemies may be certain political groups, or they may be racial groups or religious groups. They may target the governments of countries in order to attack, symbolically or literally, the groups that they are against. The attacks that they carry out will certainly affect the countries in which they occur. They will have physical, emotional, political, and economic impact on these countries. Because of the interconnectedness of countries as a result of recent globalization, this will impact other countries as well. Economic systems around the world can be affected by an attack in one country. Countries’ relations with one another can also be affected. The existence of members of a terrorist group in one country can affect not only that individual country’s domestic policies, but also other countries’ policies towards that country. This will can affect global relations.
For example, the 9/11 terrorist attacks on the United States had a global impact. The United States’ economy suffered afterwards. This was felt to some extent by other countries that do business with the United States. The United States government felt the need to go after the terrorist group behind the attacks. This led to the war in Afghanistan and was also influential in leading to the war in Iraq. Obviously, Al Qaeda’s terrorist attack in the United States caused an international political issue. The United States also took measures to improve security and tighten its national borders in the wake of attacks. This also had an impact on international politics. I feel it can therefore be argued that groups like Al Qaeda at least have the potential to be international and global forces and influence the future of globalization.
I think that by not mentioning international terrorist groups in his article, Waltz missed an important component in the process of globalization. He did not take into account groups that are outside the borders of countries and yet have an impact on them, both politically and economically.
Fleshing Out Bhagwati or Taming the Dreaded Annotated Bibliography
Despite its length of 27 pages, Bhagwati’s rant against anti-globalizationers did little to convince me that the arguments hurled against the modern wave of globalization are indeed, as Bhagwati said, “little more than rubbish.” (Bhagwati, 5) Bhagwati frequently referred to the other chapters in his book. I am sure he more fully and seriously deals with the allegations made against globalization in those subsequent chapters. However, his general introduction on the sentiments and possible reasoning of globalization opponents did not convert me to a hard-core globalization proponent. His near-derogatory language in fact made me all the more curious as to what opponents of globalization had to say. So, I located a few articles from both sides of the globalization debate that went into a little more detail on a few of the issues Bhagwati brought up.
After reading the articles I can see some of Bhagwati’s points more clearly. However, at least two of the articles I found bring up a very interesting point that Bhagwati failed to deal with in his anti-anti-globalization rant.
The Upside to Resisting Globalization, The New York Times, Feb. 6, 2009, Floyd Norris
Bhagwati makes a point to say that globalization does not equal complete economic liberalization. He says, “Indeed, (globalization opponents) assume that if one is for free trade, one must be for free direct investment, for free capital flows, for free immigration, for free love, for free everything else!” (Bhagwati, 8) Bhagwati claims, though, that this assumption is wholly incorrect. Globalization does not necessarily mean no restrictions or boundaries. In fact, Bhagwati says that globalization requires a balance, which implies regulation.
Floyd Norris takes the sentiment that globalization requires a largely open market and uses the open market allegation against globalization. Norris writes, “(The current, global economic) crisis has shown the Achilles' heel of a globalized financial system to be a lack of high-quality, and consistent, regulation to prevent overconfident bankers from taking irresponsible risks.”
Bhagwati would claim that Norris is jumping to conclusions and unfairly equating globalization with a completely unrestricted market. In actuality, Bhagwati and Norris are claiming the same things, yet from different angles. Norris would claim India as a more closed, less globalized economy, while Bhagwati, I would venture to claim, would merely claim that India had done globalization the right way by balancing trade and capital flows enough to grow its economy and interact with the world but also to protect itself from the whims of the international market. They both see the same economic situation in India, but they both have different names for it – correctly practiced globalization and correctly practiced anti-globalization.
Terrorism and Globalization, The Nation, Nov. 21, 2001, Doug Henwood
Henwood brings up what I see as the most interesting claim against globalization. Henwood states that many opponents of globalization draw a pretty direct connection between globalization and its effects and the growth in frequency and severity in terrorism around the world. Although Henwood questions the direct correlation between globalization and terrorism, the article brings out the claim of anti-globalizationers that globalization has a big hand in the promulgation of growing terrorist networks.
Globalization, Foreign Policy, March/April 2009 Issue 171, Moises Naim
Bhagwati does not address the terrorism allegation as a claim of globalization’s opponents at all in his introduction. However, as brought up in Henwood’s article in The Nation, and also as addressed in Naim’s pro-globalization article in Foreign Policy, proponents and opponents of globalization must deal with the recent growth of international terrorism. Naim says, “But we now live in an age where a large and growing number of actors empowered by globalization have the potential to cause large scale damage and substantial loss of human life.” (Naim, 4)
Aside from the terrorism issue, Naim fleshes out several points made by Bhagwati. He explicitly deals with the claim that globalization is merely a continuing relic from the past. In agreement with Bhagwait, Naim says, “…the current wave of globalization has many unprecedented characteristics.” (Naim, 2) On pages 3 and 4, Naim also backs up Bhagwati by explaining how globalization does not necessarily favor the rich or the American. He brings up many good examples of countries who have latched onto the wave, such as China and India, and have benefited greatly, just as America has, from globalization.
Redoing Globalization, The Nation, Jan. 12, 2009, Sherle Schwenninger
One of Bhagwati’s first points was that globalization does not equate a completely free international market. When he wrote on the East Asian financial crisis in 1998, he did not attribute the crisis to a failed globalized economy, but rather to an “asymmetry between free trade and free capital flows.” (Bhagwati, 8) Schwenninger keeps the globalization faith and advocates that President Barack Obama, in dealing with the current economic crisis, devise an international, cooperative plan for recovery.
Schwenninger differs with Bhagwati, though, in that he openly calls the failures that led to the current crisis, a failure of globalization. He says, “…the economic crisis is not just the result of unscrupulous mortgage lenders and unregulated investment bankers on Wall Street but of the globalization of finance and trade…” (Schwenninger, 1)
In order to fix the global financial crisis, the Obama presidency must attend to the global balance of trade between nations.
“Because the incoming Obama administration faces a crisis of global proportions, a recovery program will have to be global in scope and it will have to correct the huge imbalances globalization created,” he said. (Schwenninger, 2)
Sources:
The Upside to Resisting Globalization
http://0-www.lexisnexis.com.umiss.lib.olemiss.edu/us/lnacademic/search/homesubmitForm.do
Terrorism and Globalization
http://www.thenation.com/doc/20011203/henwood20011121
Globalization
Search “Globalization” on Ole Miss Library’s database for Articles and Databases
Redoing Globalization
Search “Redoing Globalization” on Ole Miss Library’s database for Articles and Databases
After reading the articles I can see some of Bhagwati’s points more clearly. However, at least two of the articles I found bring up a very interesting point that Bhagwati failed to deal with in his anti-anti-globalization rant.
The Upside to Resisting Globalization, The New York Times, Feb. 6, 2009, Floyd Norris
Bhagwati makes a point to say that globalization does not equal complete economic liberalization. He says, “Indeed, (globalization opponents) assume that if one is for free trade, one must be for free direct investment, for free capital flows, for free immigration, for free love, for free everything else!” (Bhagwati, 8) Bhagwati claims, though, that this assumption is wholly incorrect. Globalization does not necessarily mean no restrictions or boundaries. In fact, Bhagwati says that globalization requires a balance, which implies regulation.
Floyd Norris takes the sentiment that globalization requires a largely open market and uses the open market allegation against globalization. Norris writes, “(The current, global economic) crisis has shown the Achilles' heel of a globalized financial system to be a lack of high-quality, and consistent, regulation to prevent overconfident bankers from taking irresponsible risks.”
Bhagwati would claim that Norris is jumping to conclusions and unfairly equating globalization with a completely unrestricted market. In actuality, Bhagwati and Norris are claiming the same things, yet from different angles. Norris would claim India as a more closed, less globalized economy, while Bhagwati, I would venture to claim, would merely claim that India had done globalization the right way by balancing trade and capital flows enough to grow its economy and interact with the world but also to protect itself from the whims of the international market. They both see the same economic situation in India, but they both have different names for it – correctly practiced globalization and correctly practiced anti-globalization.
Terrorism and Globalization, The Nation, Nov. 21, 2001, Doug Henwood
Henwood brings up what I see as the most interesting claim against globalization. Henwood states that many opponents of globalization draw a pretty direct connection between globalization and its effects and the growth in frequency and severity in terrorism around the world. Although Henwood questions the direct correlation between globalization and terrorism, the article brings out the claim of anti-globalizationers that globalization has a big hand in the promulgation of growing terrorist networks.
Globalization, Foreign Policy, March/April 2009 Issue 171, Moises Naim
Bhagwati does not address the terrorism allegation as a claim of globalization’s opponents at all in his introduction. However, as brought up in Henwood’s article in The Nation, and also as addressed in Naim’s pro-globalization article in Foreign Policy, proponents and opponents of globalization must deal with the recent growth of international terrorism. Naim says, “But we now live in an age where a large and growing number of actors empowered by globalization have the potential to cause large scale damage and substantial loss of human life.” (Naim, 4)
Aside from the terrorism issue, Naim fleshes out several points made by Bhagwati. He explicitly deals with the claim that globalization is merely a continuing relic from the past. In agreement with Bhagwait, Naim says, “…the current wave of globalization has many unprecedented characteristics.” (Naim, 2) On pages 3 and 4, Naim also backs up Bhagwati by explaining how globalization does not necessarily favor the rich or the American. He brings up many good examples of countries who have latched onto the wave, such as China and India, and have benefited greatly, just as America has, from globalization.
Redoing Globalization, The Nation, Jan. 12, 2009, Sherle Schwenninger
One of Bhagwati’s first points was that globalization does not equate a completely free international market. When he wrote on the East Asian financial crisis in 1998, he did not attribute the crisis to a failed globalized economy, but rather to an “asymmetry between free trade and free capital flows.” (Bhagwati, 8) Schwenninger keeps the globalization faith and advocates that President Barack Obama, in dealing with the current economic crisis, devise an international, cooperative plan for recovery.
Schwenninger differs with Bhagwati, though, in that he openly calls the failures that led to the current crisis, a failure of globalization. He says, “…the economic crisis is not just the result of unscrupulous mortgage lenders and unregulated investment bankers on Wall Street but of the globalization of finance and trade…” (Schwenninger, 1)
In order to fix the global financial crisis, the Obama presidency must attend to the global balance of trade between nations.
“Because the incoming Obama administration faces a crisis of global proportions, a recovery program will have to be global in scope and it will have to correct the huge imbalances globalization created,” he said. (Schwenninger, 2)
Sources:
The Upside to Resisting Globalization
http://0-www.lexisnexis.com.umiss.lib.olemiss.edu/us/lnacademic/search/homesubmitForm.do
Terrorism and Globalization
http://www.thenation.com/doc/20011203/henwood20011121
Globalization
Search “Globalization” on Ole Miss Library’s database for Articles and Databases
Redoing Globalization
Search “Redoing Globalization” on Ole Miss Library’s database for Articles and Databases
Midterm
Economic globalization has occurred in different stages over time, integrating trans-ecological and trans-national markets through various advances in communication and manufacturing technology, the use of energy and transportation methods. Even changes in public policy can effect the speed, depth, or even stability of economic integration. Economic globalization in East Asia at the most basic level has improved the standard of living in those countries wishing to integrate and compete in global markets. More importantly, economic globalization has increased both regional and global political participation and also decreased the likelihood of political disagreements becoming physical conflicts.
The first phase of economic globalization is the integration of markets by reducing barriers to allow a freer flow of labor, goods, and capital. Many East Asian countries pursued the “Japanese Model of Development” by focusing on export-driven, state-led growth with relatively high amounts of foreign direct investment or loans. This basic model was used and adapted by South Korea, Taiwan, Singapore, and later China all with their own successes and setbacks; however, the general trend is obvious. “In 1960, Japan and the rest of Asia accounted for about 5 percent of world GNP compared with 37 percent for North America. By the early 1990s, they accounted for roughly 30 percent of world GNP, about the same share as North America and Western Europe.” (Pempel, 31) It is undisputed that East Asia has provided some of the most dynamic markets for investment in the last few decades. This growth has spurred investments in social capital, specifically developments in education and healthcare, to be more competitive in a global market. In addition, East Asian countries are increasingly more connected through the Internet and other forms of telecommunication, because of infrastructure investments and business friendly political environments.
Because East Asian countries have acquired a larger share of world economic output through regional and international economic integration, there has become a need for regional and international political integration to dispute trade issues. The creation of international government organizations, such as the Association of South East Asian Nations (ASEAN) or Asia-Pacific Economic Cooperation (APEC), has helped to increase economic integration as well as regional political participation and debate on issues like the environment, corporate governance, and terrorism (APEC, 2007). Not only does this economic integration help to resolve trade issues, but also often helps to smooth political relations between governments. Sino-Japanese relations have improved as the two have provided each other with healthy markets for trade and investment. The same can be seen in the case of China and Taiwan. Taiwan, Hong Kong, Macao invested billions in mainland China during its economic reforms (Huang, 2003). Although political threats between China and Taiwan were heated during the 1990s, in the last year Beijing and Taipai have agreed to open direct flights between the mainland and China to convenience business travelers-- a major regional, political development with an economic connection.
The economic and political integration of East Asia is an asset in that it not only helps to improve the living standard and economic wealth of people the region but also increases their political cooperation and participation in world affairs. It also reduces the likelihood that East Asian countries will result to physical conflict to resolve political or economic disputes. With the existence of various regional and international organizations for economic cooperation, East Asian countries have a way to unite over similar political, economic or social issues and discuss them internally and with other regional powers such as the European Union or North America.
The first phase of economic globalization is the integration of markets by reducing barriers to allow a freer flow of labor, goods, and capital. Many East Asian countries pursued the “Japanese Model of Development” by focusing on export-driven, state-led growth with relatively high amounts of foreign direct investment or loans. This basic model was used and adapted by South Korea, Taiwan, Singapore, and later China all with their own successes and setbacks; however, the general trend is obvious. “In 1960, Japan and the rest of Asia accounted for about 5 percent of world GNP compared with 37 percent for North America. By the early 1990s, they accounted for roughly 30 percent of world GNP, about the same share as North America and Western Europe.” (Pempel, 31) It is undisputed that East Asia has provided some of the most dynamic markets for investment in the last few decades. This growth has spurred investments in social capital, specifically developments in education and healthcare, to be more competitive in a global market. In addition, East Asian countries are increasingly more connected through the Internet and other forms of telecommunication, because of infrastructure investments and business friendly political environments.
Because East Asian countries have acquired a larger share of world economic output through regional and international economic integration, there has become a need for regional and international political integration to dispute trade issues. The creation of international government organizations, such as the Association of South East Asian Nations (ASEAN) or Asia-Pacific Economic Cooperation (APEC), has helped to increase economic integration as well as regional political participation and debate on issues like the environment, corporate governance, and terrorism (APEC, 2007). Not only does this economic integration help to resolve trade issues, but also often helps to smooth political relations between governments. Sino-Japanese relations have improved as the two have provided each other with healthy markets for trade and investment. The same can be seen in the case of China and Taiwan. Taiwan, Hong Kong, Macao invested billions in mainland China during its economic reforms (Huang, 2003). Although political threats between China and Taiwan were heated during the 1990s, in the last year Beijing and Taipai have agreed to open direct flights between the mainland and China to convenience business travelers-- a major regional, political development with an economic connection.
The economic and political integration of East Asia is an asset in that it not only helps to improve the living standard and economic wealth of people the region but also increases their political cooperation and participation in world affairs. It also reduces the likelihood that East Asian countries will result to physical conflict to resolve political or economic disputes. With the existence of various regional and international organizations for economic cooperation, East Asian countries have a way to unite over similar political, economic or social issues and discuss them internally and with other regional powers such as the European Union or North America.
Mid-term
East Asia, as with most other regions of the world, has greatly benefited from the transformations brought on by globalization. As summarized in the World Bank’s report on Transport Costs and Specialization, there have been two main waves of globalization. “The first wave of globalization was characterized by ‘conventional,’ inter-industry trade that exploited differences in natural endowments, the second by a ‘new international trade’ driven by economies of scale and product differentiation.” Because of their location and resources, countries in East Asia have been able to capitalize on both waves of globalization. Countries in East Asia are now legitimate players on the world’s market and economic stage. However, because East Asia has ridden the waves of globalization thus far, East Asia will soon have to navigate through the rocks that come with an ever-changing global market.
One of the biggest globalization benefits for East Asia has been transportation, or as Thomas Friedman might put it, a flattening of the world. East Asia originally was quite isolated from the rest of the globe. One reason was simply because East Asia refused to open up to trade, but another was that East Asia was just so far removed from other possible traders. With breakthroughs in transportation, though, the foreign goods and extra services of East Asia became feasible products for international trade. The World Bank states, “In East Asia, as the costs of transporting goods by sea and air fell, the production of manufactured goods spread from Japan to neighboring economies such as Hong Kong, China; the Republic of Korea; and Taiwan, China.” As noted in Phillip Hookon Park’s analysis of the South Korean and Taiwanese economies, newly industrialized economies in East Asia all shared the common characteristic of being export-driven markets. East Asia offered many goods that were not available elsewhere on the globe. And because of the East Asian NIE’s focus on exports, the East Asian countries reaped huge benefits from the globalization of transportation.
Another aspect closely related to the globalization of transportation is the globalization of communication. Just as innovation for transportation helped break down barriers of distance, communication helped break down a whole other set of barriers. Traders did not have to worry about wasting time on communication with countries on the opposite side of the globe. Also, innovations such as the Internet made it much easier for firms and companies separated by large distances to find and coordinate with each other. Furthermore, because companies could more easily find each other and work together, the trade of intermediate goods, rather than primary or final goods, became economically feasible and efficient.
The city of Dongguan in China is a prime example of a city that takes advantage of the global market for intermediate goods. The World Bank report for Scale Economies and Agglomeration states that Dongguan manufactures about 95 percent of the parts needed to make a personal computer. The report also states that Dongguan’s factories produce as much as 40 percent of the world’s supply for some products. Without the flattening of global transportation or communication, no company would be able to tap into the resources available in East Asia.
The example of Dongguan leads into an aspect of the second wave of globalization that East Asia has particularly benefited from. The World Bank report on Transport Costs and Specialization states that the second wave of globalization is driven by economies of scale. Because of East Asia’s, particularly China’s huge resources in the area of huge and cheap labor resources, East Asia has been able to develop economies of scale and offer more goods at lower rates. Dongguan, once again, is a prime example of an economy of scale.
However, problems have arisen alongside some of these benefits. Although there are several, several factors that contributed to the East Asian financial crisis of 1997, many reports seems to indicate that because the East Asian countries focused far too much on exports and catering to a world market, rather than their own domestic markets, many East Asian markets were so vulnerable to the shifts in the global economic climate and policy changes towards East Asia that when those global factors did change, the East Asia economy crumbled.
Here is where East Asia can yet again benefit from the effects of globalization, though. The first wave of globalization broke down distance barriers, but the second wave no longer has to deal with distance. Distance has become negligible, but innovation, face-to-face communication, agglomeration and intra-industry trade have all become sorely important. The World Bank report on Scale Economies and Agglomeration details the evolution of developing cities in a country. When a city becomes large, it is noted for its diversification of firms and companies, mostly in the service area. The most notable thing about this is that all these firms, and likewise all the people needed to work for them, must all live within that city, within that country. When the firms and companies and workers are within the city, they contribute to the city’s and the country’s domestic market. Phillip Hookon Park pointed out that one of the differences between the economies of South Korea and Taiwan, was that Taiwan was very much concerned with the stability of its own monetary system and economy.
So East Asia has benefited greatly from globalization in the past, and although the global market is changing, East Asia can still find ways to take advantage of globalization. Indeed, East Asia will have to face a changing world market since transportation costs are no longer as low as before. But this should be done easily if East Asia continues to take advantage of the broken-down barriers and continues to fortify and strengthen their own domestic markets.
One of the biggest globalization benefits for East Asia has been transportation, or as Thomas Friedman might put it, a flattening of the world. East Asia originally was quite isolated from the rest of the globe. One reason was simply because East Asia refused to open up to trade, but another was that East Asia was just so far removed from other possible traders. With breakthroughs in transportation, though, the foreign goods and extra services of East Asia became feasible products for international trade. The World Bank states, “In East Asia, as the costs of transporting goods by sea and air fell, the production of manufactured goods spread from Japan to neighboring economies such as Hong Kong, China; the Republic of Korea; and Taiwan, China.” As noted in Phillip Hookon Park’s analysis of the South Korean and Taiwanese economies, newly industrialized economies in East Asia all shared the common characteristic of being export-driven markets. East Asia offered many goods that were not available elsewhere on the globe. And because of the East Asian NIE’s focus on exports, the East Asian countries reaped huge benefits from the globalization of transportation.
Another aspect closely related to the globalization of transportation is the globalization of communication. Just as innovation for transportation helped break down barriers of distance, communication helped break down a whole other set of barriers. Traders did not have to worry about wasting time on communication with countries on the opposite side of the globe. Also, innovations such as the Internet made it much easier for firms and companies separated by large distances to find and coordinate with each other. Furthermore, because companies could more easily find each other and work together, the trade of intermediate goods, rather than primary or final goods, became economically feasible and efficient.
The city of Dongguan in China is a prime example of a city that takes advantage of the global market for intermediate goods. The World Bank report for Scale Economies and Agglomeration states that Dongguan manufactures about 95 percent of the parts needed to make a personal computer. The report also states that Dongguan’s factories produce as much as 40 percent of the world’s supply for some products. Without the flattening of global transportation or communication, no company would be able to tap into the resources available in East Asia.
The example of Dongguan leads into an aspect of the second wave of globalization that East Asia has particularly benefited from. The World Bank report on Transport Costs and Specialization states that the second wave of globalization is driven by economies of scale. Because of East Asia’s, particularly China’s huge resources in the area of huge and cheap labor resources, East Asia has been able to develop economies of scale and offer more goods at lower rates. Dongguan, once again, is a prime example of an economy of scale.
However, problems have arisen alongside some of these benefits. Although there are several, several factors that contributed to the East Asian financial crisis of 1997, many reports seems to indicate that because the East Asian countries focused far too much on exports and catering to a world market, rather than their own domestic markets, many East Asian markets were so vulnerable to the shifts in the global economic climate and policy changes towards East Asia that when those global factors did change, the East Asia economy crumbled.
Here is where East Asia can yet again benefit from the effects of globalization, though. The first wave of globalization broke down distance barriers, but the second wave no longer has to deal with distance. Distance has become negligible, but innovation, face-to-face communication, agglomeration and intra-industry trade have all become sorely important. The World Bank report on Scale Economies and Agglomeration details the evolution of developing cities in a country. When a city becomes large, it is noted for its diversification of firms and companies, mostly in the service area. The most notable thing about this is that all these firms, and likewise all the people needed to work for them, must all live within that city, within that country. When the firms and companies and workers are within the city, they contribute to the city’s and the country’s domestic market. Phillip Hookon Park pointed out that one of the differences between the economies of South Korea and Taiwan, was that Taiwan was very much concerned with the stability of its own monetary system and economy.
So East Asia has benefited greatly from globalization in the past, and although the global market is changing, East Asia can still find ways to take advantage of globalization. Indeed, East Asia will have to face a changing world market since transportation costs are no longer as low as before. But this should be done easily if East Asia continues to take advantage of the broken-down barriers and continues to fortify and strengthen their own domestic markets.
Mid-term
East Asia, as with most other regions of the world, has greatly benefited from the transformations brought on by globalization. As summarized in the World Bank’s report on Transport Costs and Specialization, there have been two main waves of globalization. “The first wave of globalization was characterized by ‘conventional,’ inter-industry trade that exploited differences in natural endowments, the second by a ‘new international trade’ driven by economies of scale and product differentiation.” Because of their location and resources, countries in East Asia have been able to capitalize on both waves of globalization. Countries in East Asia are now legitimate players on the world’s market and economic stage. However, because East Asia has ridden the waves of globalization thus far, East Asia will soon have to navigate through the rocks that come with an ever-changing global market.
One of the biggest globalization benefits for East Asia has been transportation, or as Thomas Friedman might put it, a flattening of the world. East Asia originally was quite isolated from the rest of the globe. One reason was simply because East Asia refused to open up to trade, but another was that East Asia was just so far removed from other possible traders. With breakthroughs in transportation, though, the foreign goods and extra services of East Asia became feasible products for international trade. The World Bank states, “In East Asia, as the costs of transporting goods by sea and air fell, the production of manufactured goods spread from Japan to neighboring economies such as Hong Kong, China; the Republic of Korea; and Taiwan, China.” As noted in Phillip Hookon Park’s analysis of the South Korean and Taiwanese economies, newly industrialized economies in East Asia all shared the common characteristic of being export-driven markets. East Asia offered many goods that were not available elsewhere on the globe. And because of the East Asian NIE’s focus on exports, the East Asian countries reaped huge benefits from the globalization of transportation.
Another aspect closely related to the globalization of transportation is the globalization of communication. Just as innovation for transportation helped break down barriers of distance, communication helped break down a whole other set of barriers. Traders did not have to worry about wasting time on communication with countries on the opposite side of the globe. Also, innovations such as the Internet made it much easier for firms and companies separated by large distances to find and coordinate with each other. Furthermore, because companies could more easily find each other and work together, the trade of intermediate goods, rather than primary or final goods, became economically feasible and efficient.
The city of Dongguan in China is a prime example of a city that takes advantage of the global market for intermediate goods. The World Bank report for Scale Economies and Agglomeration states that Dongguan manufactures about 95 percent of the parts needed to make a personal computer. The report also states that Dongguan’s factories produce as much as 40 percent of the world’s supply for some products. Without the flattening of global transportation or communication, no company would be able to tap into the resources available in East Asia.
The example of Dongguan leads into an aspect of the second wave of globalization that East Asia has particularly benefited from. The World Bank report on Transport Costs and Specialization states that the second wave of globalization is driven by economies of scale. Because of East Asia’s, particularly China’s huge resources in the area of huge and cheap labor resources, East Asia has been able to develop economies of scale and offer more goods at lower rates. Dongguan, once again, is a prime example of an economy of scale.
However, problems have arisen alongside some of these benefits. Although there are several, several factors that contributed to the East Asian financial crisis of 1997, many reports seems to indicate that because the East Asian countries focused far too much on exports and catering to a world market, rather than their own domestic markets, many East Asian markets were so vulnerable to the shifts in the global economic climate and policy changes towards East Asia that when those global factors did change, the East Asia economy crumbled.
Here is where East Asia can yet again benefit from the effects of globalization, though. The first wave of globalization broke down distance barriers, but the second wave no longer has to deal with distance. Distance has become negligible, but innovation, face-to-face communication, agglomeration and intra-industry trade have all become sorely important. The World Bank report on Scale Economies and Agglomeration details the evolution of developing cities in a country. When a city becomes large, it is noted for its diversification of firms and companies, mostly in the service area. The most notable thing about this is that all these firms, and likewise all the people needed to work for them, must all live within that city, within that country. When the firms and companies and workers are within the city, they contribute to the city’s and the country’s domestic market. Phillip Hookon Park pointed out that one of the differences between the economies of South Korea and Taiwan, was that Taiwan was very much concerned with the stability of its own monetary system and economy.
So East Asia has benefited greatly from globalization in the past, and although the global market is changing, East Asia can still find ways to take advantage of globalization. Indeed, East Asia will have to face a changing world market since transportation costs are no longer as low as before. But this should be done easily if East Asia continues to take advantage of the broken-down barriers and continues to fortify and strengthen their own domestic markets.
One of the biggest globalization benefits for East Asia has been transportation, or as Thomas Friedman might put it, a flattening of the world. East Asia originally was quite isolated from the rest of the globe. One reason was simply because East Asia refused to open up to trade, but another was that East Asia was just so far removed from other possible traders. With breakthroughs in transportation, though, the foreign goods and extra services of East Asia became feasible products for international trade. The World Bank states, “In East Asia, as the costs of transporting goods by sea and air fell, the production of manufactured goods spread from Japan to neighboring economies such as Hong Kong, China; the Republic of Korea; and Taiwan, China.” As noted in Phillip Hookon Park’s analysis of the South Korean and Taiwanese economies, newly industrialized economies in East Asia all shared the common characteristic of being export-driven markets. East Asia offered many goods that were not available elsewhere on the globe. And because of the East Asian NIE’s focus on exports, the East Asian countries reaped huge benefits from the globalization of transportation.
Another aspect closely related to the globalization of transportation is the globalization of communication. Just as innovation for transportation helped break down barriers of distance, communication helped break down a whole other set of barriers. Traders did not have to worry about wasting time on communication with countries on the opposite side of the globe. Also, innovations such as the Internet made it much easier for firms and companies separated by large distances to find and coordinate with each other. Furthermore, because companies could more easily find each other and work together, the trade of intermediate goods, rather than primary or final goods, became economically feasible and efficient.
The city of Dongguan in China is a prime example of a city that takes advantage of the global market for intermediate goods. The World Bank report for Scale Economies and Agglomeration states that Dongguan manufactures about 95 percent of the parts needed to make a personal computer. The report also states that Dongguan’s factories produce as much as 40 percent of the world’s supply for some products. Without the flattening of global transportation or communication, no company would be able to tap into the resources available in East Asia.
The example of Dongguan leads into an aspect of the second wave of globalization that East Asia has particularly benefited from. The World Bank report on Transport Costs and Specialization states that the second wave of globalization is driven by economies of scale. Because of East Asia’s, particularly China’s huge resources in the area of huge and cheap labor resources, East Asia has been able to develop economies of scale and offer more goods at lower rates. Dongguan, once again, is a prime example of an economy of scale.
However, problems have arisen alongside some of these benefits. Although there are several, several factors that contributed to the East Asian financial crisis of 1997, many reports seems to indicate that because the East Asian countries focused far too much on exports and catering to a world market, rather than their own domestic markets, many East Asian markets were so vulnerable to the shifts in the global economic climate and policy changes towards East Asia that when those global factors did change, the East Asia economy crumbled.
Here is where East Asia can yet again benefit from the effects of globalization, though. The first wave of globalization broke down distance barriers, but the second wave no longer has to deal with distance. Distance has become negligible, but innovation, face-to-face communication, agglomeration and intra-industry trade have all become sorely important. The World Bank report on Scale Economies and Agglomeration details the evolution of developing cities in a country. When a city becomes large, it is noted for its diversification of firms and companies, mostly in the service area. The most notable thing about this is that all these firms, and likewise all the people needed to work for them, must all live within that city, within that country. When the firms and companies and workers are within the city, they contribute to the city’s and the country’s domestic market. Phillip Hookon Park pointed out that one of the differences between the economies of South Korea and Taiwan, was that Taiwan was very much concerned with the stability of its own monetary system and economy.
So East Asia has benefited greatly from globalization in the past, and although the global market is changing, East Asia can still find ways to take advantage of globalization. Indeed, East Asia will have to face a changing world market since transportation costs are no longer as low as before. But this should be done easily if East Asia continues to take advantage of the broken-down barriers and continues to fortify and strengthen their own domestic markets.
Economic Globalization and East Asia
Midterm Essay I
Jessica Moeller
In what ways has East Asia benefited from economic globalization?
Jessica Moeller
In what ways has East Asia benefited from economic globalization?
East Asia has benefited in a large way from economic globalization. East Asia has received large amounts of FDI that have provided capital for their own countries. Its foreign trade has increased because of the decrease in transport costs. East Asia has also been able to fill manufacturing needs with the relatively large population size that it has and has been able to take advantage of the scale economies and agglomerations that developed.
One of the major driving forces in East Asia’s economic development has been the FDI that East Asian countries have received. Because many East Asian countries (such as Japan, Korea, and China) have had governments that strongly control their countries’ economies, they have been able to make sure that the FDI that they receive goes toward areas of their economies that need the extra help. They have been able to protect the domestic sectors that are doing well from outside competition while allowing the influence of economic globalization to benefit areas where they have lagged behind. This has allowed for Japan’s zaibatsu and Korea’s chaebol to increase and prosper. Another source of capital for East Asian countries comes from their respective diasporas. East Asians who have moved to work abroad are more likely than people from most other areas of the world to send remittances back to their home countries. Economic globalization has opened up international jobs that provide the opportunity for East Asians to make a higher salary working abroad and to be able to contribute even more to their home countries.
Another one of the major factors of economic globalization that has benefited East Asia is the decrease in transport costs. The decrease in the cost of transportation has made it more feasible and practical for other countries to engage in international business with East Asia. This was especially true when transport costs first began to decrease. At that point in time, Western countries were more likely to trade with East Asia since they were further apart and had different resource endowments. This was especially beneficial to East Asia as Western countries were largely the best-developed countries. This was an essential step in East Asia’s development since so many East Asian countries’ geography makes them relatively inaccessible. Japan, Singapore, and Taiwan are all islands that depend solely on water and air transport – which had been very expensive. Korea and China are also fairly isolated geographically and benefited from the decrease in transport costs.
Other countries not only began to trade more with East Asian countries, but also outsourced more work to East Asia as well. The relatively high population size of most East Asian countries has been suitable for the development of manufacturing industries. After these industries had begun developing, they generally became scale economies that developed into agglomerations as similar industries clustered together. These areas then became attractive not only to workers, but also to investors. By moving to these areas to look for jobs, workers were more likely to be able to find work and would also have a higher degree of job security, as it would be easier for them to find a job in the same area if they should lose theirs for some reason. Investors were also more likely to invest in these areas because of the large amount of low-cost labor already established there. China’s Dongguan is a good example of this phenomenon. The city’s development originally began with small to medium-sized enterprises that later benefited from the agglomeration that occurred there. Dongguan is now sometimes known as the “factory of the world” as it produces a large percentage of electronics sold worldwide. This type of agglomeration has also led to knowledge spillovers and allowed for the differentiation of goods, both of which have also helped East Asia to develop economically.
Economic globalization has certainly benefited East Asia. Foreign investment helped to support East Asian economies as their funds were often directed towards sectors in which East Asian countries’ domestic companies lacked. East Asia also received remittances from others abroad. Decreasing transport costs encouraged foreign countries to do more business with East Asia. This was important for the geographically isolated East Asian countries. Other countries also began to outsource work to East Asia. Scale economies and agglomerations began to develop which were also of great economic benefit.
INST 310 Section 2 Midterm Exam I
Write a two- or three-page essay on the following question*. Use some examples from the first five weeks of this course to illustrate your points. Post your essay on the course blog by 16:15. Late essays will be penalized by one letter grade per hour late.
* In what ways has East Asia benefited from economic globalization?
* In what ways has East Asia benefited from economic globalization?
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