Research Economic And Social Impacts Of Globalisation (Research Paper Sample)

ECONOMIC AND SOCIAL IMPACTS OF GLOBALISATION
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Introduction
Globalization can be observed as the establishment of a world state. It brings together various countries that will consequently mutually benefit from each other. Globalization is meant to unite the world, and as a result, various countries gain huge benefits. The economic and social developments are the major benefits accrued from globalization. However, globalization will not only bring enrichment to the world but will also bring some few constraints. A keen scrutiny of globalization has revealed that its benefits outweigh the challenges. It has enabled countries to come together and share their technologies that have facilitated the holistic growth of these countries. Countries with low economic standards are known to benefit from globalization since they are elevated to world-class standards of the economy. This study aims at looking at how globalization has facilitated the economic and social developments across the world alongside with the constraints attributed to globalization. Some theories have been adopted to strengthen the understanding of the impacts of globalization.
Economic impacts of globalization
Globalization helps the economy of the country to grow due to increased trade with other countries. In the olden days when the role of globalization was not appreciated, the economies of several countries remained dormant due to the trade barriers (Hamdi 2013, p. 142). The globalization helps to break up the unnecessary trade barriers that hinder the trade between countries. Simply, the trade barriers are the limitations that a country employs to stop the trade with other countries. The realization of the importance of interdependence between countries is what has led to the elimination of the trade barriers. This interdependence is achieved through globalization which helps to link up several countries across the world. As a result of the globalization, the developing countries are eliminating the tariffs that stop other countries from investing in their countries. The theory of Preferential Trade Agreement (PTA) as explained by Snorrason (2012, p.9) highlights that countries need to cut their tariffs and reduce the import barriers together with their trade partners. The elimination of those barriers facilitates an easy transaction between the partnering countries. This will mean that one country can easily acquire goods and services from the partnering country. Also, it implies that the members of one country can easily invest in the other country. Through globalization, a country can have a choice of whether to produce their goods domestically or from abroad (Barrios 2009, p. 1). When a country establishes a company abroad, the people from those foreign countries benefit in terms of employment. Consequently, each country will get the foreign currency that will strengthen their domestic currency. A strong domestic currency is an indication of the economic growth. Thus, it is clear that globalization leads to increased trade between countries and it ultimately helps to stabilize the economy.
The globalization improves and strengthens the growth of industries in the developed country. It might be seen as if it is only the developing countries’ economy that is backed up by globalization, but this is not the case. The developed countries heavily rely on the developing countries to improve the production of their industries. Most of the raw materials used in the industries of the developed countries are acquired from the developing countries. The developing country in contrasts taps the technology and resources from the developed countries (Hamdi 2013, p. 142). Most of the developing countries are known to have adequate unutilized raw materials due to their limited industrialization. For instance, Nigeria is a developing country that is situated in Africa, and it is widely known due to its production of oil. Nigeria is in the membership of an organization that is widely acknowledged in the sale of oil across the world. The formation of the Organization of Petroleum Exporting Countries (OPEC) enables various countries to provide the petroleum oil. Nigeria is a member of the OPEC where it exports its oil to the outside world. The oil is substantial in industries since it acts as the source of energy which is necessary to run an industry (Odularu 2008, p. 1). It is the establishment of globalization that enables easy exporting and importing of products. Thus, it is clear that globalization creates job both for the developing and the developed countries. In the developing countries, jobs are established through setting up of industries by the developed countries. The developed countries acquire the raw materials to facilitate the ongoing production in their industries. Ultimately, the developed countries will sell their products even to the developing countries through distributors who get jobs due to the output the developed countries produce. Without globalization, it would be hard for countries to depend on each other in developing their economy. As a result, the economic stability would be hard to achieve.
Although the globalization helps in increasing the trade between countries, it is associated with increased interdependence among countries. This is a major constraint of globalization. A country only relies on another to grow economically. This consequently means that the collapse of the economy of one country will make the trading partners as well to experience heavy setbacks in their economy as well. The interdependence of countries can be explained using the theory of interdependence which was originally founded by Thibaut and Kelly in 1959. The theory, however, has been developed by other scholars over the years. This theory interprets the social nature of human beings by highlighting that the actions of an individual member within a group have ultimate effects to the entire group (Paul, Lange & Balliet 2015, p. 65). The theory expounds on how individuals within a group are interrelated and the action of an individual might affect the conduct of the entire group. Take for instance a group of students who seek to further their academic knowledge in that they meet on a periodic basis to discuss some academic questions. If one of the active members fails to attend the meeting consistently, there is a tendency that other members of the group will feel discouraged and their discussion will not be as effective as before. The same phenomenon is applicable in the interdependence of states. Zimbabwe experienced a dangerous economic crisis that was recognized as hyperinflation which forced it to adopt dollarization as a means of calming the situation (Chigome 2015, p. 306). The hyperinflation of Zimbabwe did not affect it only, but it also affected the other trading partners who transacted with Zimbabwe. This explains how the interdependence instituted by the globalization can ultimately affect other countries’ economies adversely if one country experiences a serious economic crisis.
The globalization brings the inequality in development. Although the globalization brings employment to both the developed and the developing countries, it has a way of ensuring that the developing countries hardly reaches the magnitude of development exhibited by the developed countries. The inequality is backed up by the Stolper-Samuelson (SS) theorem. It stipulates that “both trade and FDI should take advantage of the abundance of low-skilled labor in DCs and so imply an increasing demand for domestic low skilled labor and hence decreasing within-country wage dispersion and income inequality” The case of USA and Mexico may be applicable in this cases, where the USA has the upper hand (Lee & Vivarelli 2006, p. 8). The theory tends to show how the developed countries employ the mechanisms that will improve their outputs while lowering the costs of inputs coming from the developing countries. This will be an implication that the developed countries will benefit more from the resources they obtain from the developing countries to produce the finished product. The developed country will tend, to obtain the inputs from the developing countries at the lowest prices, and they will maximize their productivity. This will place them at higher rank since they are the major beneficiary of these transactions. As a result, there will be an inequality resulting from such transactions. The inequality will reflect that the developed countries benefit more than the developing countries. This trade is facilitated by the globalization. It will be a negative impact since it will facilitate the widening of the gap between the developed and the developing countries. Although the developing country will tap new technological knowledge from the developed country, the ultimate results will place the later in a better position in terms of the economic growth.
Social impacts of globalization
Globalization has contributed to the increased health standards in the health sectors. There are renowned doctors across the world, and they can be easily accessed to provide medical services to the chronic diseases in some countries. The globalization ensures the ease of sharing the technology. In hospitals, the technology is inevitable in developing the health standards. The hospitals require diagnostic machines that will provide accurate results pertaining to the diseases of a patient. The advancement in technology has been tapped into the health sectors to ensure the introduction of such machines. Japan is recognized as the best country with the provision of the health services. The quality adopted by Japan in the health sector is hi-tech since they are complex. The US despite being the world superpower borrows the medical technology from Japan (Starfield 2000, p. ...