GLOBALIZATION OF

ECONOMICS AND
DEVELOPMENT
Prof. Anna Nedyalkova DSc
Eleonora Tankova PhD
 Module 1
From ECONOMICS to
GLOBALIZATION OF ECONOMIS AND
DEVELOPMENT

WHY ?
• Economics - The social science that deals with the production,
distribution, and consumption of goods and services and with the
theory and management of economies or economic systems.
• Macroeconomics - The study of the overall aspects and
workings of a national economy, such as income, output, and the
interrelationship among diverse economic sectors.
• Megaeconomics – It studies the interaction of national
economies through comparative analysis of the economic systems.
• International Economics - A branch of economics that
studies economic interactions among different countries, including
foreign trade (exports and imports), foreign exchange (trading
currency), balance of payments, and balance of trade. The study of
interational economics focusses on two related areas - international
trade and international finance
• Globalization – Interdisciplinary subject
which relates to all branches and fields of
knowledge
• Main objectives of the study of
Globalization of economics and
development:
THINK GLOBALLY AND ACT LOCALLY!
So knowledge about globalization is
important part of your academic
knowledge !
 Changed economic activity of the society

• In our days no one sphere of life, including economic

sphere can act independent and isolated. All processes
and events should be examined and understood in the
broad sense of economic, political, social, ecological and
demographic context, taking into account their
interdependence.

• The area of economic science is already too narrow to

explain all the aspects of the complex and
interdependence world.
 Actuality and Significance of the Subject
Realities:
1. Huge complexity of the
contemporary society;
2. A lot of conflicts and
heterogeneity ;
3. New polarization of humanity
after the end of the Cold War;
4. Global dissemination and
importance of local events and
processes.
Theories:
1. Statements for a going
process of global cohesion;
2. Available concepts for
common standards and
principles of development;
3. A lot of researches and
publications concerning the
problem ;
 Globalization of Economics and Development –
Two Sites of One Process
WHY?

• The main spheres of life are inseparable;

• Economics is one of these spheres of life;
• The technological development fosters the development
of all other spheres;
• Simultaneousness development of communication
technologies, culture, education and etc.;
• Trends for universality of development;
• Economic activity of the society has changed;
• The universal and national development are tightly
bounded
Our choice is to examine globalization of economics in
the broad context of development !
 The Nature of Globalization
• Till 19th century “global” meant “spherical”;
• At the end of 19th century “global” meant “the whole
world”;
• 20th century “global” meant “definition of capacity and
dissemination of events and processes”
 Main key words
About the process: About the main key
• Universality players/agents:
• Internationalization • Global companies
• Integration • International
• Generality economic
organizations
• Worldwide
• Global markets
• The state
• Communication
technologies
 Some special features of globalization in
present days
• Growing interdependence of all processes
• Establishing of a global financial-economic
area
• Information technologies - WWW
• Change in the state’s functions –
vanishing of the national boarders
• Universality of the world – dissemination
of the democratic system and socio –
cultural values
 Some conclusions
• “Global” – a new scientific category, which treats
the processes and events on a global scale
• “Globalization” – an approach which expands
and deepens the economic theory as well as
other scientific fields
• Subject of globalizations are:
- global companies;
- regional structures;
- the state;
- international economic organizations
 Evidences
• Civilizations – they have originated
independently from one another and have had
common standards and rules of life;
• Religions – they have monotheistic character,
universality of values and trends towards
expansion of ideas;
• Colonizational processes – they have similarity
of reasons, forms and consequences: creation of
one-sided economic relations;
• From the great migration of peoples till now –
there is a tendency for decreasing the
uncertainty
 Theoretical discussion about Globalization

• Second half of 20th century – the global idea

emerged in philosophy and political science.
Then it was transferred to communications
theory and finally conquered economic thinking;
• The 90-ties – active discussion on the nature
and essence of globality and globalization as a
new stage of economics and world development.
• The Roman Club – the report “Limits of growth”
provoked the first serious discussion about
globalization and raised the necessity to
coordinate activities of all countries.
Influence of Globalization on different spheres
of life
• Economic – the trade roads were built; global
companies started their functions; global economy and
finance system have been created.
• Political – tribes transformed to peoples, nations and
states formed, after that regional unions and finally
international authorities of governance.
• Geographical – the great migration of peoples started,
new lands were founded, empires created.
• Ideological – unified social ideas spread on huge
territories
• Informational – the speech and writing were created,
after that literature, finally massmedia and Internet
 Common Characteristics of the Globalization
Process
• The dynamic development of the globalization
process follows the development of the society.
• As a phenomenon it has two levels – general
civilization and formative ones
• Contradictory process which has its positive and
negative sides
• It is pursued by anti-social phenomena
 Examples from reality
• Attendance of new country to NATO:
- it could be considered as a local event, but the reality
is…

Military production

Weapon trading

Change of the Change of the

infrastructure and Economic structure of
the labor market and of
other related the budget
productions
 Definitions of globalization
• Globalization is a very high level of
development of the globality of
economics and life in the
conditions and content of life
activity expanding with a tendency
for planetarism.

• Globalization is a compression of
time and space.
 Module 2
The role of the state
Different statements:
I. Against the State
• Some scholars predict the “end” of national state
power.
• Some argue that the state may only adjust to
globalization, without having an active role in it.
• Some believe that the state will disappear.
Michael Sandel;
Charles Maynes;
Zygmunt Bauman
 The role of the state
Which structures will replace the State?
The answer of the scholars, who share
these statements is:
• The global companies or
• The International organizations, such as
UN, which has instruments for realizing
global governance.
 The role of the state
II. In defense of the State

The facts of practice show that the role of

the state is increasing in all aspects of
social life, including economics. Economic
globalization does not remove the
necessity for functioning of the state.
 The role of the state
Some arguments in defense of the state
• The state has guaranteed internal and external
security;
• The state has underpinned the law;
• The state has funded national welfare systems;
• The state has provided the structures for popular
representation
• The state has built the framework for economic
and social activities.
So the state plays fundamental role in creating of
institutional forms and strategies of globalization
processes and supporting the process of capital
concentration.
Two realities co-exist:
1. The so called borderless virtual world where
geography does not count, and communication
and business transactions can occur in a
matter of seconds.
2. The other world is that of the everyday life of
people in which borders still count, local
realities are still complex and very different
among themselves, and most fundamentally
where social and economic problems still need
to be addressed.
Why have not all countries benefited to the same
extent from globalization?
• Countries that do not have strong
institutional framework, as well as solid
social policies and networks to cope with
negative externalities most suffer the
negative effects of globalization.
• External factors, such as the global trading
environment, are crucial in creating
greater opportunities or in posing
constraints on a country’s economic
growth.
 Module 3
REGIONALISM
Regionalism originated along with globalization
and approximately at the same time.
Factors leading to the formation of regional
structures during ages:
• Political;
• Geographical;
• Religious;
• Military and defense;
• Economical.
 REGIONALISM
• 40-ties and 50-ties of XX century – new wave of regional
structures in Europe:
1948 – Organization for European economic Cooperation;
1950 – European Coal and steel Community;
1957 – European Economic Community;
1959 – European Free Trade Association
1949 – 1991 – Council for Mutual Economic Assistance
(socialist countries)
New factor for regional integration appears:
according to the social system- the world was divided into
two social systems.

40-ties and 50-ties - Economic stabilization was the

leading idea
 REGIONALISM
• 80-ties – economic regional structures with
mutual political, social or military and strategic
goals:
- EU;
- ASEAN
- NAFTA
• 90-ties – the regional structures became even
more closed with very clear mutual economic,
social, cultural, educational etc. relations.
They form the new structure of the world
 REGIONALISM
Economical aspects:
• Similar economic development;
• Common priorities;
• Forming common economic model;
• Regional competitiveness and comparative advantages in a global arena;
• Common reaction to the risks of the environment
 REGIONALISM
Some conclusions:
Objective, real, social and historical
movement in which economic reasons
dominate. They reflect and influence on
political, cultural and educational activities.
New international relations appear.
Regionalism does not question the state
and its future role.
 REGIONALISM
Some conclusions:
• The new major integration processes of
the epoch – globalization and regionalism
– established themselves in the 90-ties.
• Regionalism is an instrument of the state
for attaining the further goals of
globalization.
• In present days globalization is realizing
through regional structures.
 Module 4
Civilization basis of Globalization
The analysis of the globalization should be
made at two levels:
• General civilization level
• Formative level (social system)
There is a clear dependence of globalization
from the civilization model and from the
dominated social system.
 Civilization
• Civilization is a complex society or culture group
developed upon common or similar principles,
with common or similar characteristics and
marks.
• Civilization is a system of nations and states
which have had their own specific historic
destiny in a long period of time.
• Culture is a subsystem of civilization. In one
civilization can develop and exist a lot of similar
cultures with their national specifics.
The engines of the civilization progress are:
• The permanent fight between man and
nature for surviving and satisfying man’s
needs.
• Factors of progress – science,
technologies, labor etc.
• Factors of social conflicts – properties,
capitals, territories.
 Three mechanisms for society’s
integration
In each society the three mechanisms exist, but one of them
dominates!

Culture Ideology
Religion System of ideas,
An integrated
which serve the
System of pattern of human
politics, recommend
values, practices knowledge, belief
public and political
and norms, and behavior that
structure of the
related to the idea depends upon the
society and the
of God. capacity for
type of relations
A composition of symbolic thought
between mad and
attitudes between and social
authorities
God and man. learning
 These three mechanisms have four main
functions in different societies:
1. Unite the individuals;
2. Create social capital, which makes easier
the achievement of common aims;
3. Establish the authority’s functions and
inequality;
4. Create life aims and ambitions.
When some of the three mechanisms does
not work effectively, the society is in a
condition of DESINTEGRATION!
• Lack of trust;
• Growing criminal activities;
• A lot of anomalies;
• The social processes are not managed;
• The private interests dominate over the
common values
Formative basis of Globalization
Main features of the capitalistic system:
• Intensified and strong competition between
corporations and leading countries;
• Technological contest – new form of competition;
• The corporate secret and informational isolation;
• The market economy and the state set different
conditions for going off the globalization process;
• Models of development – for each country they
determine the aim and the character of the
economic growth
 Conclusions

• Globalization manifests in different way at

civilization and formative level.
• At civilization level it should develop and
enrich the humanity without breaking its
diversity.
• According to the social system of the
country, different social and economic
consequences are shown.
 Module 5
Globalization- contradictions,
tendencies and prospects
 factors

globalization

contradictions tendencies

GLOBALIZATION EFFECT

Global shaping of
regionalism
economics

Conclusions for Europe

• Globalization is one of the forces of
development putting the other factors of
development and growth on a new basis
and in new relations.

• Globalization effect – the systematic

result of the influence of the globalization
on the other factors and forces of
development
 Systematic result of the influence of
the globalization on the other factors
Globalization
and forces of development
Effect

To consider the effect of other

development factors
Research
approach To consider the accumulated result

economic General historical

Factors Manifest on
two levels
non economic Formative level
(social system)
• On the general historical level
globalization is effected by several main
factors:
- technical and technological progress;
- quality and content of interaction
between man and nature;
- culture, media and communication;
- organization of public production.
• Within the frames of the social system, in
our case the capitalist system,
globalization takes place under the
influence of the following factors:
- market environment, market mechanisms
- competition;
- state;
- international financial system;
- surrounding natural environment
 Economics

Media and
Technologies
communication

Globalization

Democracy and
Culture
politics
 The role of technological factor
• Technologies are a product of science.
• Technologies are materialized reality of science.
• Technologies are socially neutral and all the
conflicts that occur in society does not relate to
technologies.

The effect of and role of technologies in life

depend on the way of application and the goals
pursued.
 Technologies – the main source for
development
• 17th century – scientific revolution –
scientific knowledge was applied and
machines were invented.
• 18th century – the beginning of the
industrial revolution.
• 19th century - intensive application of
science in the material production.
• 20th century – inventing the computer and
its using, replacing some functions of the
machines
 Technologies – the main source for
development
• 21th century – expansion and
development of the functions of
technology. Technology acquires also
some social characteristics - new
technologies can reproduce biological and
mental functions.
 The effects of technologies are:
• A possibility and necessity for public production
to go out of the national-state frames;
• A possibility and necessity for the management
of the society to be performed by means of
information technologies and communication
networks;
• Acceleration of the synthesis between the
results of R/D and the transfer of technologies;
• Formation of a new type of consumer demand
which can not be shut off within the frames of
national markets
 Industrial revolution
created the global market

Technological revolution
created the global society
and the global economy
 Negative tendencies
• Technological competition;
• Technological dictate;
• Technological determinism;
• Technological imperialism;
• There is no free movement of technology
 Global media and communication
• Modern communications and their basic form –
media are a product of the new technologies and
major circumstances which have given rise to
globalization.
• They ate total global structure with universal
effects.
• They have organizational transformation on a
company level:
– At first a process of uniting in communication and
media complexes began;
– Then their merger into huge industrial and financial
corporations.
• The main economic force of media and
communications is global capital, which
through them turns into a universal force
of society
• Media have become a sub-system of
global corporations and a means of
realizing their global strategies
• Media in itself have turned into a global
and universal factor of development.
 Culture
• In the past years culture and economics
were treated as separated and
independent spheres.
• The importance of culture in the overall
development of society is evidently
increasing, showing itself in economics
too.
 Economics - Culture
• The common feature between them is that both
follow the overall development of the society;
• The development of culture is not always
following the development cycle of economics;
• The cultural specifics of a nation, state or region
is much more clear then their economic or
political specifics;
• Cultural processes are determined by the
national and state differences.
 Culture - Globalization
• The cultural processes gain the importance of
major conditions of life and effect each human
activity;
• Culture is turning into one of the basic factors of
economic growth, while cultural product is
among the new strategic resources of society;
• Culture became a specific sphere of
entrepreneurship;
• Culture, education and science form “new
economy” - knowledge economy
 Is their Global Culture?
• The early 70-ties the French Ministry of
Culture introduced in the scientific space
the concept “cultural imperialism”;
• 80-ties and 90-ties the theses of “war of
cultures”, “conflict of civilizations” were
very popular;
• Later appear the concept of
“Americanization of world culture”
 Some conclusions
• The very globalization of economics,
science and technologies requires a very
high degree of development of cultures.
• The concept of “glocalization”, introduced
in Japan in 1996 a combination of “global”
and “local”, expressing the need for
globalization to be carried out in
compliance with the specifics of the
individual countries.
• The main contradictions of culture in the
global world is between its economic form
of realization and its esthetic and artistic
nature.
 Democracy and politics
• Democracy means that peoples and their
parliaments should be sovereign judges in their
own countries. They should choose the national
model of development and solve the main
problems of organization and functioning of the
national economics.
• In practice – the decisions are taken at the head
offices of the global corporations and are
implemented in the individual countries. This is
how the issues of the structure of production, of
investment and technological policy, of strategic
marketing are solved.
• After 11th September 2001 the world is not the
same:
• Unstable political relations and political systems;
• New “paradoxes of democracy” appear:
– New wave of religion expansion;
– Terrorism;
– Using weapons to solve problems and conflicts
“Economics of war” opposes the humanism and
subordinates the world order to corporative interests.
• Globalization comes in contradiction with
human rights and with the very principle
of individualism, which along with
competition, is the fundament of capitalist
system.
Globalization in contemporary conditions is
an asymmetry
• Deepening gap between the economies of
the developed and developing countries;
• Intensified struggle for additional access to
resources and markets;
• Ecological asymmetry;
• Poverty and polarization of men;
• Uneven location of people;
• Continuing international debt crisis
THANK YOU !!!