GLOBALISATION CASE
STUDIES
IGOs – WTO, IMF, World Bank
IMF – International Monetary Fund
Loans money from rich nations to countries that apply for help. In return, the recipients must agree
to run free market economies that are open to investment, allowing TNCs to enter more easily.
World Bank
Lends money on a global scale, headquartered in Washington DC. Gives direct grants to developing
countries, e.g., the Democratic Republic of Congo’s mega-dam project
WTO – World Trade Organisation
Advocates for trade liberalisation, especially for manufactured goods. Asks countries to abandon
protectionist attitudes in favour of untaxed trade.
Trade blocs – EU and ASEAN
EU: The European Union
Formed in 1993, the EU is a 27 member single market trade bloc, with a single currency (the Euro)
adopted by 19 members.
- It guarantees the free movement of goods, capital and people
- The only group of nations to grant all citizens of member states freedom of movement
ASEAN: The Association of South East Asian Nations
Established in 1967, ASEAN has 10 member states and a combined population of 660 million
- A uniform low tariff is applied between members for specified goods
- The ASEAN agreement also promotes peace and stability: its members have pledged to not
have nuclear weapons
China’s 1978 Open Door Policy
In 1978, China was a poor and politically isolated country that was ‘switched off’ due to communist
leadership.
Deng Xiaoping’s 1978 Open Door Policy allowed China to embrace globalisation while remaining
under one party authoritarian rule. This policy transformed China into an urban, industrialised nation
– today it is the world’s largest economy.
- Open Door Policy – this slowly introduced economic liberalisation by allowing foreign TNCs
into the country as well as FDI, whilst the country remained under a strict one party political
system.
, - SEZs were created on the coast – Shanghai etc – mega region of 120 million people in Pearl
River Delta. 400 million people escaped poverty in the country.
Open door approaches to globalisation:
FDI from China’s TNCs expected to total US $1.25 trillion between 2015-25
Joined WTO in 2001
Foreign TNCs are now allowed to invest in some sectors of China’s domestic markets
Closed door approaches to globalisation:
Google and Facebook have little or no access to China’s market
Government only allows 34 foreign films to be screened annually
Strict controls on some foreign TNCs
Indices of globalisation (AT Kearney and KOF
Index)
AT Kearney
12 indicators spread across 4 categories - political engagement, technological connectivity,
personal contact, economic integration - complex points and weighting system.
Uses more holistic indicators than KOF
Cons - Only includes 62 countries, heavy weighting given to ICT allows USA to gain high index score
despite low political engagement.
KOF Index
24 indicators spread over 3 categories - political, economic and social globalisation
Each indicator converted to index value, then data is analysed before comparing the new
scores with previous ones dating back to 1970
Cons - Only measures international interactions (not internal) and does not include recent
technological developments. Some cultural bias.
Switched off places – Sahel and North Korea
North Korea:
Ruled as an autocracy by a single family, North Korea has chosen deliberately to remain politically
isolated from the rest of the world.
Ordinary citizens have no internet/social media access and there are no undersea data
cables connecting North Korea with anywhere else
As a result, North Korea has a relatively low GDP and development, especially as it only
trades with China
The Sahel Region
A semi-arid area that extends along the Sahara Desert’s southern rim.
Economically isolated – Low income levels means it lacks the market size to attract FDI, low
literacy rates makes it unattractive for offshoring
STUDIES
IGOs – WTO, IMF, World Bank
IMF – International Monetary Fund
Loans money from rich nations to countries that apply for help. In return, the recipients must agree
to run free market economies that are open to investment, allowing TNCs to enter more easily.
World Bank
Lends money on a global scale, headquartered in Washington DC. Gives direct grants to developing
countries, e.g., the Democratic Republic of Congo’s mega-dam project
WTO – World Trade Organisation
Advocates for trade liberalisation, especially for manufactured goods. Asks countries to abandon
protectionist attitudes in favour of untaxed trade.
Trade blocs – EU and ASEAN
EU: The European Union
Formed in 1993, the EU is a 27 member single market trade bloc, with a single currency (the Euro)
adopted by 19 members.
- It guarantees the free movement of goods, capital and people
- The only group of nations to grant all citizens of member states freedom of movement
ASEAN: The Association of South East Asian Nations
Established in 1967, ASEAN has 10 member states and a combined population of 660 million
- A uniform low tariff is applied between members for specified goods
- The ASEAN agreement also promotes peace and stability: its members have pledged to not
have nuclear weapons
China’s 1978 Open Door Policy
In 1978, China was a poor and politically isolated country that was ‘switched off’ due to communist
leadership.
Deng Xiaoping’s 1978 Open Door Policy allowed China to embrace globalisation while remaining
under one party authoritarian rule. This policy transformed China into an urban, industrialised nation
– today it is the world’s largest economy.
- Open Door Policy – this slowly introduced economic liberalisation by allowing foreign TNCs
into the country as well as FDI, whilst the country remained under a strict one party political
system.
, - SEZs were created on the coast – Shanghai etc – mega region of 120 million people in Pearl
River Delta. 400 million people escaped poverty in the country.
Open door approaches to globalisation:
FDI from China’s TNCs expected to total US $1.25 trillion between 2015-25
Joined WTO in 2001
Foreign TNCs are now allowed to invest in some sectors of China’s domestic markets
Closed door approaches to globalisation:
Google and Facebook have little or no access to China’s market
Government only allows 34 foreign films to be screened annually
Strict controls on some foreign TNCs
Indices of globalisation (AT Kearney and KOF
Index)
AT Kearney
12 indicators spread across 4 categories - political engagement, technological connectivity,
personal contact, economic integration - complex points and weighting system.
Uses more holistic indicators than KOF
Cons - Only includes 62 countries, heavy weighting given to ICT allows USA to gain high index score
despite low political engagement.
KOF Index
24 indicators spread over 3 categories - political, economic and social globalisation
Each indicator converted to index value, then data is analysed before comparing the new
scores with previous ones dating back to 1970
Cons - Only measures international interactions (not internal) and does not include recent
technological developments. Some cultural bias.
Switched off places – Sahel and North Korea
North Korea:
Ruled as an autocracy by a single family, North Korea has chosen deliberately to remain politically
isolated from the rest of the world.
Ordinary citizens have no internet/social media access and there are no undersea data
cables connecting North Korea with anywhere else
As a result, North Korea has a relatively low GDP and development, especially as it only
trades with China
The Sahel Region
A semi-arid area that extends along the Sahara Desert’s southern rim.
Economically isolated – Low income levels means it lacks the market size to attract FDI, low
literacy rates makes it unattractive for offshoring
