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Drivers Of Globalization Ppt

How can the developing countries, especially the poorest, be helped to catch up? Doesglobalization exacerbate inequality or can it help to reduce poverty? And are countries thatintegrate with the global economy inevitably vulnerable to instability? These are some of thequestions covered in the following sections.

Drivers Of Globalization Ppt

Economic "globalization" is a historical process, the result of human innovationand technological progress. It refers to the increasing integration of economies around the world,particularly through trade and financial flows. The term sometimes also refers to the movement ofpeople (labor) and knowledge (technology) across international borders. There are also broadercultural, political and environmental dimensions of globalization that are not covered here.

Anxiety about globalization also exists in advanced economies. How real is the perceivedthreat that competition from "low-wage economies" displaces workers fromhigh-wage jobs and decreases the demand for less skilled workers? Are the changes taking placein these economies and societies a direct result of globalization?

What is the appropriate policy response? Should governments try to protect particulargroups, like low-paid workers or old industries, by restricting trade or capital flows? Such anapproach might help some in the short-term, but ultimately it is at the expense of the livingstandards of the population at large. Rather, governments should pursue policies that encourageintegration into the global economy while putting in place measures to help those adverselyaffected by the changes. The economy as a whole will prosper more from policies that embraceglobalization by promoting an open economy, and, at the same time, squarely address the need toensure the benefits are widely shared. Government policy should focus on two important areas:

In short, globalization does not reduce national sovereignty. It does create a strong incentivefor governments to pursue sound economic policies. It should create incentives for the privatesector to undertake careful analysis of risk. However, short-term investment flows may beexcessively volatile.

National and international institutions, inevitably influenced by differences in culture, play animportant role in the process of globalization. It may be best to leave an outside commentator toreflect on the role of i