Economic Globalization: Causes, Consequences, and Global Impact

Posted on Mar 15, 2025 in Geography

Economic Globalization

Globalization of the economy is involved in the operation of global production, consumption, and exchanges.

The progress of telecommunications allows receiving real-time information, reducing the distance factor. Businesses can expand their areas of production and market.
Improving transport facilitates the transfer of goods and people worldwide.
Generalization of the capitalist system, based on private property, free competition between companies, and the desire to obtain maximum benefits, is favored by the disappearance of communist economies.
The extension of neoliberal ideology is based on full freedom of markets and the demise of trade barriers.
International economic organizations, such as the WTO or G-8, promote a working demo of the economy.

Production tends to be organized on a global scale as new technologies allow splitting the manufacturing process into phases.
Consumption tends to unify tastes before the massive diffusion transmitted in publications.
Exchange of goods, capital, information, and services acquired a global dimension.
Multinational corporations are a powerful agent of economic globalization and act with an overall strategy.

Geopolitical: Triumph in a new international order directed by the three main foci of the capitalist economy.
Social: Globalized job market through international migration.
Cultural: Models are imposed on a universal scale.

Economic: Favors specialization in each area for the best activities. Accentuates imbalances between countries.
Political: Can assist in the diffusion of limited autonomy, but the countries are conditioned by the decisions of supranational institutions.
Social: Promotes employment globalization but also its flexibility and falling wages, facilitating the mobility of the population but stimulating migration movements between rich and poor countries. Spreads advances such as medical advances but also problems such as AIDS.
Cultural: Facilitates the diffusion of science, technology, and culture, however, it may cause the loss of cultural identity.
Environmental: Favors making awareness of certain environmental problems but produces a large negative ecological impact that should promote an economic model.

Economic wealth is manifested in a high GDP per capita due to the development of advanced activities.
The population shows stable growth and is aging due to low birth rates and high life expectancy.
Social welfare is high. The population has their basic needs met and enjoys a high level of consumption.
Territorial contrasts are moderate. Although economic growth is concentrated in certain areas, inequalities are reduced.
Political systems with democratic traditions are stable.
The geography of wealth often includes a small number of countries located mainly in the temperate zone.

Economic poverty is manifested in a low GDP per capita due to the scarce agricultural development and industry activity.
The population shows high growth due to lower mortality, although birth rates are reducing. The majority of the population is rural, and this promotes the formation of unemployed and shacks.
The level of social welfare is low; the population has not met their most basic needs, and there are food shortages.
Territorial agreements are charged. Economic activities concentrate on certain areas.
Political systems are unstable and authoritarian. They are usually located south of the rich countries.

Internal Causes: Specific to each territory. Natural terms and conditions, the majority or minority of resources, and the relation of population have been identified. This type of cause does not fully explain the degree of development.
External Causes: Differences in development are attributed to the relationships established between the different territories. Underdeveloped countries are former colonies of developed countries.