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Unit 14: Globalization

• The political aspect of globalisation has an importance of its own, because it affects the nation- Notes
state system that has had its long history since the Westphalia treaty of 1648. It has affected the
external aspect of sovereignty and entailed the end of the welfare state. It is creating a new
model of state that acts in collaboration with a number of non-state actors.
• For our purpose, the political dimension of globalisation is particularly important. ‘It has affected
the nature and working of the nation-state system and is creating conditions for global
governance. Its implications have their own significance in the domain of comparative politics.
• Globalisation is a world-vide process which “is unfolding in different parts of the world with
different meanings and different connotations. It is neither a singular condition nor a linear
process.
• The citizens of a member-state may freely move in the territory of another member-state, may
join educational institutions of their choice, and may also do some business or work without
any hindrance there.
• The state is not the exclusive locus of power within its own territorial boundaries. Its powers
are limited, and so the powers of the Union in relation to individual member-states are limited.
• A trans-national state is known for having a divided sovereignty, for it is not the sole centre of
power within its own territorial boundaries. It does not possess ‘coercive powers’ of its own in
the form of army, police and courts. It exists on the ‘willing surrender of the aspects of
sovereignty’.
• The less developed countries experience a more skewed income distribution, which is attributed
largely to the shift in labour demand. If has also led to greater polarization across countries
because technology—the prime factor responsible for the current wave of economic globalization-
still remains concentrated in a small body of already industrially advanced countries.
• The less developed countries feel that the current globalization process has led to the worsening
of the structural poverty in many countries. At the same time, under the pressure of economic
globalization many of them have to resort to external debt, which have further contributed to
the deceleration of the growth in real terms.
• In the Uruguay Round, what was finally agreed upon was that the service sector will have to be
liberalized but based on multilaterally agreed and legally enforceable rules to govern trade and
services such as most favoured nation (MFN) treatment, transparency of laws and regulations,
recognition of operating licences and arrangement for dispute settlement.
• Two main distinctive features of WTO are: (1) nations seeking admission to WTO must accept
all decisions from around as a package which includes agreements on trade in services,
intellectual property rights and trade related investment measures; and (2) nations acceding to
WTO are required to be bound by the new integrated dispute settlement mechanism
encompassing the three areas of goods, services and technology.
• At the domestic level, the policy responses are based on the rationale that at all odds they will
have to insert themselves into the global economy with a view to benefit by it and at the same
time make an effort to minimize the adverse and deleterious consequences. Towards this effort,
while the less developed countries are, to the extent possible making efforts to come up with a
policy package-be it in terms of structural adjustments or trade liberalization-their concern
justifiably is to work in concert at the multilateral level and under the WTO regime to reshape
the globalization process.
• Globalization compels business to adapt to different strategies based on new ideological trends
that try to balance rights and interests of both the individual and the community as a whole.
This change enables businesses to compete worldwide and also signifies a dramatic change for
business leaders, labor and management by legitimately accepting the participation of workers
and government in developing and implementing company policies and strategies.
• In a global economy, power is the ability of a company to command both tangible and intangible
assets that create customer loyalty, regardless of location. Independent of size or geographic
location, a company can meet global standards and tap into global networks, thrive and act as

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