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What is Globalization? Globalization refers to the fairly recent trend that has resulted in the integration of the economies, societies and cultures of the world through trade and advances in communication. It may also describe the incorporation of domestic economies into the international economy via the means of direct foreign investment, migration, the dissemination of technology and trade. In general, the main factors that will foster globalization are technological, political, biological and economical. It may also describe the increased circulation of information related to language, ideas and popular culture throughout different nations across the globe.

It is said that the rise of globalization was in part a response to World War II. Politicians believed that by integrating the global communities, the chance for prosperity would increase, by fair trade and the potential to destroy barriers. This idealism prompted the Bretton Woods conference, where politicians began creating the framework for international trade and finance. It also lead to the establishment of numerous international institutions that would direct this process.

What is Globalization

The institutions that were then formulated include:  International Bank for Reconstruction and Development better known as the World Bank and the International Monetary Fund or IMF. The process of globalization has been enhanced by the development of certain technologies that have allowed the reduction in the cost of trade and trade negotiations rounds. Under the General Agreement on Tariffs Trade or GATT many previous trade regulations were removed to open up free trade.

The agreements that were drafted have since prompted a decrease in the barriers that were originally enforced in international trade. GATT and the WTO have been responsible for certain other developments including:

  • Promoting free trade by eliminating tariffs, the development of free trade zones that use little to no tariffs.
  • Decreasing transport costs, specifically by implementing the use of containerization for shipping via sea.
  • Decrease or total elimination of capital controls
  • Decrease, total elimination of subsidies normally awarded to local businesses.
  • The development of subsidies used for global corporations
  • Consistently used intellectual property laws in most states with greater limitations.
  • Recognizing the intellectual property rights of external territories.

Globalization also occurs in cultures which have been promoted by the development of specific technologies. In general it is agreed that this led to the wide acceptance of western ideals and culture. While this at first appeared to be a way of bridging the gap, many people soon complained that their own unique cultures were being slowly erased.

Since globalization became prominent, the total world exports have rose from 8.5% in 1970 to 16.2% in 2001, meaning it almost doubled in the past 30 odd years.

What is Globalization

Now you know the answer to your question, "What is globalization?"