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A critical evaluation of the transformationalist perspective and other perspectives on globalization and the economy.
Harvard Business Review (701048-PDF-ENG)
November 14, 2000
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Perspectives on Globalization Case Answers
A critical evaluation of the transformationalist perspectives on globalization and the economy.
Over the past thirty years, the intensity of and perspectives on globalization has advanced leading to a transformed business world. Globalization is described as a multi-dimensional phenomenon where all economics, social, cultural, and political activities operate at an international level. As explained by Beck (2015), globalization can be understood through different changes, extinction of boundaries resulting from political, social and economic behaviors, the second characteristic entails the development of links between trade and culture investment and flows.
The globalization concept has triggered many discussions and disagreements about its conceptualizations and benefits which has led to the emergence of different theoretical perspectives (Beck, 2015). The paper objective is to analyze the transformationalist perspective on globalization and the economy critically. It will aim to answer the questions of what impact does globalization has on the local and international economy, what globalization means to the transformationalist and factors that have contributed to globalization. Economy growth across the globe has been accelerated through globalization activities.
Definition of key terms
The key terms used in the paper are the economy, globalization, and transformationalist.
- The economy is the resources and wealth of nations regarding the supply of money, consumption, and production of goods.
- Transformationalist is a theory that explains the long-term views of globalization
Globalization and economy
Globalization is a phenomenon that excluded the barriers to economic growth in both developed and developing nations (Beck, 2015).
After World War II, countries began to form regional trade unions to help strengthen international relationships. These unions implemented regulations and rules to improve trading activities between member states. According to Mahutga and Smith (2011), the technical changes introduced in the 19th century played a significant role. It was these changes that facilitated the rapid expansion of countries real income and global trade. Therefore, trade barriers between nations were eliminated resulting in international activities such as exportation and importation of products and services. Bishop et al. (2011) strongly agree with the argument that the integration of global markets offers benefits to economic aspects of production. For that reason, the effect of globalization on universal trade boosts trade openness and foreign direct investment.
As explained by Lin and Rosenblatt (2012), a larger market base and consumers of products/services from different Multinational Corporations have been provided by the increasingly interdependent between countries leading to gross domestic product growth hence curbing poverty levels.
Mahutga and Smith (2011) studies emphasize that integration will reduce unemployment rates in developing countries because the employment of skills and low-skill labor will increase. The argument that international market integration provides developing countries with opportunities to improve the living standards of their citizens and promotes economic development due to the infusion of technology and foreign capital has been echoed by many scholars (Bishop et al., 2011).
Globalization entails expanding the political, economic, and social activities which have essential geographical impacts on other nation. The distribution effect is an excellent example of how growth, power, and wealth amongst countries are changed through globalization. Various studies give several examples of how globalization has increased economic growth and reduced poverty in the BRICS nation (Brazil, India, South Africa, China, and Russia) because they embraced open macroeconomic policies (Lin & Rosenblatt, 2012).
Globalization has its advantages and disadvantages. Economists agree that it…
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