Lesson 3

The Global
Economy
Abad | Dosohan | Jamili | Sacapano
 Definition of Terms
Economic globalization: is the expansion of national economies, the global market driven by modern
technologies and institutional set ups that promote faster and easier flow of goods and capital. it helps
people buy and sell things from different countries

Global economy: denotes that the economies of various countries are more interconnected from
extraction, production, distribution, consumption, to disposal of goods and services.

Internal financial institutions: are global financial institutions that support a country’s economic growth
support to governments and now other private sectors.

International Monetary Fund: is an international organization with 183 member countrie that promotes
international monetary cooperation and exchange stability to foster economic growth and high
employment and to provide short-term financial assistance to countries to help ease balance of
payments adjustments.
 Definition of Terms
Global civil society: is a system of nongovernment institutions that operate across geographical borders
and organize and mobilize for a common issue or cause. These groups are not controlled by
governments or businesses but focus on making the world a better place.

Global corporation: is an enterprise that engages in activities which add value in more than one country.

World system: is based on the theory of Wallerstein (1974) that recognizes that social and economic
change is not only endogenous to a country, but is affected by its interaction to exogenous institutions.
it explain how the world is divided into three groups:

Economic integration: is a process of combining or increasing the interconnectivity of national

economies to the regional or global economies. It helps nations grow by increasing trade, investment,
and cooperation.
Economic Globalization
As discussed in the earlier section, central to the discussion
about globalization is its economic dimension. The
phenomenon of economic globalization includes greater
integration of economic activities, products, and systems
across the world. As Szentes (2003) argues, globalization in
economic terms extends economic projects and relations
transnationally and promotes economic interdependencies
among different countries.
It is important to note that economic globalization goes
beyond internationalization. Economic globalization involves
the integration of functions and processes of economic
activities (Dicken, 2004).
 Economic Globalization
Economic globalization is driven by the "growing scale of cross-border trade
of commodities and services" (Shangquan, 2000). Critical to economic
globalization is global economic integration. Economic integration means
that separate production operations are functionally related to each other
and form a unified product or service. Economic globalization refers to the
increasing economic interconnections among countries, driven by neoliberal
principles that emphasize market forces with minimal government
intervention (Steger, 2010; Al-Rodhan et al., 2006; Shangquan, 2000). Gills
and Thompson (2006) argue that globalization has been ongoing since
human migration began. While early trade focused on high-value
commodities like spices and gold, modern globalization is distinguished by
its scale, economic system restructuring, and the dominant influence of the
private sector (Shangquan, 2000).
Who are the Actors that Facilitate
Economic Globalization?
Globalization has opened the doors for other non-state authority and
actors in driving economic globalization.

International Economic Organizations

International Monetary Fund (IMF)
World Bank
Organization for Economic Cooperation and Development
(OECD)
Regional Organizations: Association of Southeast Asian
Nations (ASEAN), North American Free Trade Agreement
(NAFTA)
Who are the Actors that Facilitate
Economic Globalization?
Multinational Companies (MNCs)
Dutch and British East India
Muscovy Company
Royal African Company
Hudson Bay Company
Central Banks
Global Civil Society
Transnational Advocacy Networks (TAN)
International Monetary
Fund (IMF)
An international organization of 183 member countries
Promote international monetary cooperation and
exchange stability; to foster economic growth and high
employment; and to provide short-term financial
assistance to countries to help ease balance of
payments adjustments
International Financial
Institutions (IFIs)
The generic name given to all financial institutions
operating on an international level
Includes development banks and monetary authorities
Transnational Corporations
Enterprise that engages in activities which add value
(manufacturing, extraction, services, marketing, etc.) in
more than one country.
Lesson 4

The Global
Interstate
System
 Definition of Terms
Global Interstate System:
Institutional arrangement of governance
Addresses regional or globalized issues beyond a nation-
state’s scope (Chase-Dunn, 1981)
Internationalism:
Emphasizes diversity and celebrates multiculturalism
Globalism focuses on the economic aspect of exchanges
between countries and societies
 Introduction to Globalization
and the State System

Globalization leads to increased flow of

capital, goods, services, and people
Modernization in transport,
communication, and financial systems
contributes to interconnectedness
Traditional state systems are limited in
addressing globalized issues
Internationalist thinkers emphasize
cooperation over state sovereignty
The Interstate System
(Chase-Dunn’s Definition)
A system of unequal and competing states
No single state can impose full control over others
Shifting alliances and conflicts affect global
balance of power
An interstate system governs globalization
(Chase-Dunn, 1981)
Effects of Globalization on
Governments (Positive Impact)
Governments adjust national policies to align
with global realities
Example: Montreal Protocol (1987)
International treaty to phase out ozone-
depleting substances
46 countries signed, showing global
cooperation
NASA projects ozone levels to return to
1980 levels by 2032 (Watts, 2018)
Global treaties help address borderless
environmental and political challenges
Effects of Globalization on
Governments (Negative Impact)
Local governments attract global investors for
economic growth
Leads to industrialization but also negative
consequences:
Displacement of farmers and conversion of
agricultural land
Global corporations demand lower taxes and
wages
Conflict between economic performance and
local well-being
Governments are heavily influenced by
corporate entities
To Sum It All Up !
Globalization reshapes governance
and policy-making
The Global Interstate System plays a
crucial role in managing international
relations
Governments must balance economic
growth and local sustainability
Internationalism vs. Globalism: A key
debate in understanding globalization
INSTITUTIONS THAT GOVERN GLOBALIZATION
THE ROLE OF STATE AND NON-STATE ACTORS
IN GLOBAL GOVERNANCE
INTRODUCTION

LEARNING
•- globalization governance
-The system of institutions, rules, norms,
OBJECTIVE
and procedures that enable international
cooperation on issues that cross national
Conduct a short research project to answer a
borders.
question, drawing on several sources and
generating additional related, focused questions
that allow for multiple avenues of exploration.
KEY GLOBAL INSTITUTIONS

•- United Nations (UN)

•- Regional Commissions
•- World Bank (WB)
UNITED NATIONS
(UN)
•- 192 member
•- Addresses peace, security, human
rights, and development.
•- Works with state and non-state actors.
REGIONAL
COMMISSIONS
•- Groups of officials
developing policies for EXAMPLE
• • Economic Commission for Africa (ECA)
economic and social
• • Economic Commission for Europe (ECE)
progress.
• • Economic Commission for Latin America and
the Caribbean (ECLAC)
THE WORLD
2
BANK (WB)
KEY BRANCHES

• • International Bank for

Reconstruction and Development
•- Established in 1944 at the Bretton (IBRD)
Woods Conference. • • International Development
•- Provides loans for development Association (IDA)
• • International Finance Corporation
projects.
(IFC)
OTHER MAJOR INTERNATIONAL
ORGANIZATIONS
•- International Monetary Fund (IMF): Monitors
global economy, provides loans.
•- World Trade Organization (WTO): Regulates
global trade.
•- World Health Organization (WHO): Conducts
global health research.
•- ILO: Labor standards and worker rights.
•- FAO: Food security and agriculture.
•- UNESCO: Promotes peace through education
and science.
SPECIALIZED INTERNATIONAL
ORGANIZATIONS

•- ICAO: Regulates air transport.

•- IMO: Oversees shipping regulations.
•- ITU: Develops communication standards.
•- WIPO: Intellectual property rights.
CONCLUSION
LEARNING
•- Global governance involves international

OBJECTIVE
organizations & non-state actors.
•- Institutions like UN, IMF, WTO, and
World Bank play crucial roles.
Conduct a short research project to answer a
•- Collaboration
question, drawing on is key sources
several to solving
and global
challenges.
generating additional related, focused questions
that allow for multiple avenues of exploration.