Globalization has had a huge impact on governance and the world economy. There has been marked increase in cross-border trade and a surge in investment opportunities. This is very vital as it is helping to raise living standards across the world as new technologies spread faster. The competitive environment has also changed significantly with multinational organizations repositioning themselves to reap the benefits of free mobility of labor and capital. Consumers will also benefit from the low prices of commodities and a wider choice of cheap products. It will be possible for organizations to have access to rich-country markets and benefit from increased technical assistance. The World Trade Organization (WTO) and other global institutions like the World Bank will focus on promoting regional and global integrations through policies that enhance economic development.
Globalization
Evidently, Globalization has broken the barriers to international trade. It has enabled governments, organizations and individuals to access resources and share information. One of the key issues that characterize organizations in the 21st century is the increased mobility of resources.
Globalization has benefited both developed and developing countries. It has become increasingly possible for countries and organizations to share resources. The free mobility of resources has brought many benefits. For one, the mobility of labor and expertise is a driving force for developing economies. It is notable that most multinational organizations are constantly utilizing imported skilled work force. There is a huge surge in the number of professionals and experts working in foreign countries. Governments have modified their Training and educational systems to reflect the changing trends. The free movement of skilled labor has helped to build and develop capacities in areas that lack professional expertise. On the other hand, local economies are diversifying and growing tremendously as organizations relocate to emerging markets. This situation has led to optimal use of resources due to enhanced capacity and minimized wastage of resources. One of the major challenges facing international trade has been transport and communication related barriers (Maltby and Richard, 1989). It is evidently clear that with increased globalization, the distribution functions and supply chains of organizations will benefit. Certainly, as governments continue to work closely together, this will enhance free movement of goods and services. This will help organizations to reach the global customer at a minimal cost. The result is lower prices of commodities and improved living standards for people. In addition, globalization will have an effect on the international competitive environment. It is notable that as organizations relocate and expand their business operations, competition for resources and markets will get stiffer. This competition will help to bring prices for commodities down. Organizations will seek for cheaper and efficient business process in order to stay in the business. The free movement of capital is another factor that characterizes the globalization process.
The free flow of capital is one of the main factors driving new and emerging economies. This especially important because despite the huge endowment of natural resources, developing countries lack the human and capital resources to utilize these resources. With globalization, it has become possible for poor and developing countries to tap their natural resources. Experts agree that globalization and the formation of bilateral agreements have enabled African countries to invest in mining, agriculture, transport and communications (Tedlow and Richard, 1990). In addition, the manufacturing sectors in most countries are on a recovery path. It is notable that the industrialization process relies on the efficient flow of labor and capital. The availability of markets and the ability to reach these markets at a minimal cost is another very important factor. Globalization plays a vital role in enhancing the free movement of resources and the creation of new markets. Globalization does not only benefit developing countries, but also developed and industrialized economies. Ideally, the availability of raw materials and other inputs drives the globalization process. These inputs include sources of energy and affordable labor among others. The industrialized nations obtain most of their energy sources from the Middle East and other African countries. International cooperation and globalization has made the trade in oil energy easy and economically viable. Imports from foreign countries power the nuclear energy projects in developed nations. In addition, most industrialized nations obtain raw material from foreign markets. On the other hand, industrialized nations export most of their products to developing economies.
Developing countries are a major importer of products from their developed counterparts. As countries work closely together, it is easier to solve global problems. These problems range from international insecurity to environmental degradation. On its part, insecurity is one of the main challenges to international trade. Organizations are spending more due to the increased insecurity along the Indian Ocean occasioned by piracy. This has affected distribution and supply chain systems leading to higher cost for goods and services. Terrorism is another security concern that is posing a big threat to international trade. A dynamic security issue is gradually affecting how organizations run their business process. In recent years, terrorism has changed face with organized groups coming up. The ability for terrorist groups to mobilize resources is one area that concerns all business people.
Increased globalization will not only present an opportunity for terrorists to strengthen resource mobilization activities but also complicate the fight against it. That is why governments should come up with joint security operations to scuttle terrorism and piracy networks globally. It is easier to eliminate the threat of terrorism and piracy through international security cooperation strategies. The fight against international insecurity should include closer engagement between government agencies like the international police and other intergovernmental surveillance and intelligence systems. There is also the need for governments to enhance capacity development by offering training and assistance in the form of security equipments especially for developing and prone nations. Apart from the enhanced ability to fight crime and insecurity, globalization will enable countries to tackle the thorny issue of environmental pollution. It is very clear that environmental degradation and global warming are a major concern for most governments. Clearly, the war on global warming is going to be effective if governments collaborate in the fight. It is therefore feasible that concerted efforts like the Kyoto protocol and the carbon trading programs will achieve a lot more if all governments step up their efforts to mitigate the effects of green house gas emissions and participate in these global campaigns. However, it is also evident that despite the huge benefits accrued from the globalization process, there are several challenges that this process has brought with it. One of these challenges is increased insecurity and crime. Criminal gangs are taking this opportunity to expand their networks. It has also become easier for organized gangs to mobilize resources and transfer them with ease. It is therefore imperative that governments should come up with efficient security systems to track and prevent any such activities.
To ensure security, it is important for the government to work together with non-governmental organizations, private institutions and local communities to strengthen security and judicial systems. Secondly, the increased interdependency of world economies presents another threat. Take for instance the recent economic recession. The major economies felt the impact of the economic down turn. Small economies were not spared either they were affected by the credit crunch, which led to decreased disposable incomes as organizations closed their business and people lost their incomes. The increased economic interdependency means that the business environment will get unstable due to the impact of changes in the financial front.
Governance and authority in the world economy, change and continuity
Governance and authority in the world economy is one of the key issues that shape the globalization process and international trade. Globally, governments are forming regional trade and economic blocks to enhance trade among partner states. It is notable that multinational and bilateral engagements have increased in the recent past. The major objective is to encourage the free movement of people and resources in the world economy. However, as governments come up with legislative structures and regulatory frame works, it is expected that several issues will surface. These include governance, capacity building, human rights and investment flows. Governance issues have a huge impact on trade regimes, a critical component of world economies. Trade regimes help developing countries to grow in trade and investment as well as shape governance, human rights and capacity building for manufacturers, suppliers, exporters and importers. Globalization will enable governments to take stock and to identify the major challenges and opportunities for strengthening international trade and investment relationship. Experts are increasingly convinced that increased trade via government intervention will strengthen the world economy (Oldroyd, 2006).
Governance is critical in addressing supply and demand side constraints that hinder international trade. The supply constraints include inadequate financing for suppliers in developing countries and inefficient manufacturing techniques. On the other hand, demand constraints include stringent government procedures for certification of standards and a poor and ineffective transport and communication network. Notably, governance has a huge impact on international trade. Take for instance the Africa Growth and Opportunity Act (AGOA). This is a unilateral offer of duty free and quota free market access to the United States market under the generalized system of preference.AGOA has catalyzed trade between the United States and African countries. It has helped to attract new investments to Africa especially in the apparel industry. It is clear that governance shapes the business and investment environments. It is vital to strengthen investor confidence to boost investments. There are several constraints on business and investment environment including poor communications, transport, energy and power services (Williamson, 2004).
In Britain, governance has a huge impact on the performance of the private sector. The attention should focus on how to address all factors that hinder private sector growth and competitiveness. The UK government should come up with private sector development strategies to address outstanding obstacles. This will ultimately lead to increased domestic and foreign direct investment.
In order to strengthen the world economy, it is imperative that economic powers like the US, European Nations and emerging economies like china, Korea and Japan, should fulfill their commitments towards trade promotions, technical assistance for trade capacity building and help developing countries to integrate into the world economy. It is also important to work with international financial institutions and export credit facilities to ensure that there is adequate trade financing especially for small and medium enterprises. In any case, market access alone is not sufficient to drive the world economy. There is need to enhance capacity and competitive ability especially in developing countries. There is need to build capacity in the agricultural sector particularly in the areas of research, infrastructure and technology transfer to combat the rising prices for foodstuffs in the global economy. Major economies like Britain and the US need to help build institutional capacity to enable countries meet specific market requirements. This is especially important to implement systems of mutual recognition of standards. It is imperative that leading economies need to institute targeted tax incentives for companies to attract foreign direct investments. Most importantly there is need to strengthen regional integration initiatives and regional projects to eliminate supply constraints.
Governance has a huge impact on the role of women entrepreneurs in global economy. It is therefore clear that governments and organizations should put in place systems that address the constraints affecting women entrepreneurs including dedicating certain percentage of trading finance and donor funds to women.
Globalization and challenges to national structures the German and Swedish social market economy under pressure.
Globalization has a huge positive impact on the social market economy. However, the process has posed a challenge to national structures. For instance, the German and Swedish social economy is under pressure due to globalization. On the other side, the idea of globalization is very welcome in Britain. Capitalism and globalization have influenced national structures in many ways. It is very clear that the competitive environment is stiffer as multinational organizations expand their business operations to cater for new markets. The result is a huge challenge for nations to have in place structures that ensure fair business practice.
Due to liberalization of international markets, it has become necessary for countries to develop systems to monitor local market trends. This is especially important to prevent dumping of sub-standard products. It is also vital for European governments to have in place systems that ensure safety as well as prevent exploitation of the local consumer. Most countries focus on industrial protectionism and consumer protection strategies. The idea is to implement stringent import and export requirements and standards. To do this, it is important to be careful not to subject international trade to factors that will crumble it.
Experts say that globalization is the biggest issue that dogs the European Union in recent years. Some people claim that European integration will be affected by global forces with experts warning that if unchecked globalization could lead to more poverty and loss of national and regional values and identity. It is evident that globalization affects the social, economic and political structures in Europe.
This will have a big impact on cultural identity and peoples values and traditions. Globalization has the ability to create wealth disparity and that is why German and Sweden are going to be affected.
In German, experts claim that the countries economy is declining due to the effects of globalization. There are also calls to boycott goods manufactured from foreign countries. This is especially targeting goods from countries that have not put clear efforts to fight child labor. There is increased competition from emerging markets like china and the Korea. This situation has made most European countries to look inwards to find ways and means to cushion local industries. A special case is the effects of globalization to the British social, political and economic systems.
Britain social, political and economic systems
It is notable that the globalization process complicates the future of the British social market economy. The inter-linkage between British structures like industry, finance and local authorities is one of the greatest governance challenges. With globalization, the British economy will experience shifts in sectors. The UK will be disadvantaged in that developing economies will have access to affordable labor hence leading to temporary structural unemployment in Europe. It is clear that there are deliberate efforts to protect domestic industries and jobs through a well-orchestrated system that restricts trade and free movement of resources through the British economy and the European Union in general. However, it is also evident that Britain is keen to embrace globalization while insulating its economy from any detrimental outcomes. The European commission says that about a sixth of Europes wealth is earned from global markets. It may not be feasible for the European Union to agitate for deglobalization. It is therefore imperative that Britain can only mitigate the negative effects while maximizing on the benefits.
Over all, there are arguments that globalization has been beneficial to the UK economy. These arguments are focusing on positive trends like sustained economic growth, lower inflation, inward investment and productivity. On the other side, there are claims that globalization has contributed to loss of jobs, wealth inequality, environmental degradation and a worsening balance of payments deficit.
The effects of the globalization process on German and Swedish labor market are also very complex. That is why the European Commission has proposed a globalization adjustment program to help employees in large corporations who will be affected by relocations. One of the challenges affecting globalization process in German and Sweden is due to the reluctance to venture their economies to the services sector. Most European countries are keen to continue focusing on traditional economic activities like manufacturing (Jan, 2003).It is therefore understandable that these countries are privy of the effects of opening their markets.
In German, many people are concerned that globalization threatens the European model of capitalism. Experts say that globalization forces European governments to be directly competing with each other. Some claim that the European social market is also under threat from globalization. There are arguments that the World Trade Organization (WTO) is going to influence the trends in the European social markets by calling for dismantling of its structures to adopt a new model.
In Sweden, people are concerned about the effects of globalization on social health care and unemployment benefits. However, studies have shown that an efficient health system is likely to compete well in the global economy. On the other hand, economic integration and liberalization will boost trade and economic growth this will also create well paying jobs hence better living standards. People will have access to health care, education, good housing and adequate pension scheme.
There is no doubt that globalization and economic interdependency makes economies and local communities more vulnerable to global forces. However, on the other side British, German and Swedish workers and shareholders are benefiting form the American economic expansion. Clearly, globalization has increased peoples choices and freedom to choose.
Some critics claim that Italy is one of the biggest losers of the global forces. They point out that Italys mainstream sectors are now under threat from competition from emerging economies. Notably, the countrys fashion industry is under threat from imports. However, there is a debate in Italy over the effects of globalization in the local economy.
Governmental structuralism and market development
There is no doubt that governmental structures and market development have huge impact on the world economy. Capitalism led to market liberalization, which has further fueled globalization. The search for raw materials and the need to find markets for local products has made the UK government to push the EU to adopt market liberalization strategies. Due to liberalization, British based organizations have changed their business models to cope with increased competition for limited resources. In effect, the government is keen to ensure that local economies are not adversely affected. Market development is another issue that the UK government is concerned with in recent years.
Economic liberalization has created the necessity for the government to develop structures that ensure harmony, protect local consumers as well as strengthening local organizations to compete with other large companies (Robert, 2008).
Capitalism and its proliferating affect on governance
With the increased pace in globalization, one thing that is very clear is that capitalism will continue to have huge impact on governance. We should also not forget that capitalism is a political and economic model that is deeply integrated in the globalization process. This explains the rapid rise in popularity for economic and political liberalization. Notably, powerful capitalistic nations like the UK and the US are embracing economic policies that to a certain extent fuel globalization. Some of these practices include privatization of public companies. It is vital for countries to adopt economic and political systems that capitalize on the opportunities presented by the globalization process.
Economists agree that privatization of organizations and liberalization of economies will give capitalistic economies an edge over the others. Most importantly, liberalized economies are usually stronger, responsive to externalities and more stable than controlled economies. This means that liberalization enhances competitiveness for scarce resources. Evidently, the need for countries to tap the benefits of a global market fuels the rapid spread in capitalistic ideologies. Thus, capitalism influences social, political and economic environments with deep ramifications on the governance of countries.
Human behavioralism, market activity and governance
Human behavior has a huge impact on market activity and governance. Human behavior influences consumption patterns, purchasing trends and the demand and supply forces. In addition, human behavior influences trade and choice for products. Globalization will not only lead to free mobility of labor and capital but also closer interaction of people. In essence, this means that there is increased interaction of cultures, religions, values and lifestyles. As people acquire new cultures and better ways of doing things, the market activity will change to adjust to these dynamics (Salvador Mahmoud, 2000). This will have an effect on economic activities practiced by local communities.
Several studies have identified globalization as one of the key factors determining market activity in Britain. These studies have also revealed that human behavior is a main driver of European market trends. It is therefore imperative that globalization has helped to shape market activity through changes in human behavior occasioned by cultural interactions between communities around the world.
Secondly, human behavior has a profound effect on governance. Apparently, human behavior shapes governance. The public has the power to develop governance structures that resonates with its social, economic and political characteristics. It is clear that governance has to address key societal problems. This can be possible without looking at the cultural aspects, social values, religious inclinations and lifestyle. Better still experts argue that public support is a vital element in determining how governments are structured and how they operate. Where there is no public support, the political regime will always be shaky. A strong and stable leadership derives its power and legitimacy from the people. It is also notable that the same force drives peoples voting patterns (Simon, 2008).
Erosion of democracy
The effects of globalization on the democratic process are one issue that creates a huge debate. Some critics argue that globalization will have a huge impact on the stability of democratic regimes. They claim that globalization will lead to economic and political interdependency. As a result, it will not be easy for governments to make unilaterally independent economic and political decisions. Moreover, globalization will not only lead to free movement of capital and labor, but also a closer interaction of social cultures, lifestyles, values and religion. As people interact with each other, they learn new ways of doing things and better ways of governance. In addition, these interactions between governments will ultimately influence governance. Regional governments will continue to adjust to the global forces. This involves the formulation and implementation of joint regulatory framework. The joint regulatory requirements will entice governments to stick to clear social and political values and hence restrict the democratic process. However, it is vital to recognize the significance of public support for sustaining democracy. Some studies have reported that public support for democracy can deter the manifestation of undemocratic processes. Some of the challenges to democracy include lack of trust in key political parties, the rise of undemocratic leaders and the influence of foreign governments.
Governance and the future
The future of governance will depend on several factors. These forces include the pace and trends in the globalization process and the social, political and economic environments. According to studies by North and Olson in 1990, it is very clear that a government with sufficient power to enforce contracts and determine the management of property rights is a very unsecure government (Colin and Wolfgang, 1997).However, it is also important to note that human behavior and capitalism will continue to influence the nature of governance in the future. I envisage an increased adoption of governance structures whose design taps the benefits of the globalization, integration and liberalization processes. These future governance structures will also seek to address the uncertainties arising from the negative effects of globalization in the world economy. It is therefore notable that the globally, governance issues will reflect the changing economic, social and political environments. It will also be interesting to find out how governments will deal with the challenges arising. Some studies claim that governments need to have in place systems to check unemployment, economic instability, financial instability as well as increased competition from products manufactured in foreign countries (Stephen, 2003).
Conclusion
Globalization will continue to have a huge impact on governance and the world economy. It is notable that as countries position themselves to benefit from the free movement of labor and capital they should also put in place systems to address any arising challenges. In addition, governments need to adopt social, political and economic strategies that are in line with the global trends. There is no doubt whatsoever, that governance is a key issue that will determine the success of countries and regional blocks in the near future. However, this will only be possible if governments appreciate the contribution of governance in improving the living standards of the people.
