Globalization, Inequality, and Development

1
Chapter 8

• Globalization, Inequality, and Development

2
Chapter Outline

• Introduction
• Globalization
• Global Inequality
• Theories of Development and Underdevelopment
• Neoliberal versus Democratic Globalization

3
Globalization

• In 1980 just 3.5 of the worlds population
  traveled internationally.
• By 2001 that figure had more than tripled to
  11.3.
• In 1980 about 14,000 international organizations
  existed in the world.
• By 1999, there were three-and-a-half times as
  many.

4
Indicators of Globalization, Early 1980s Circa
2003
198081 19982003 Change
Foreign direct investment as of GDP 4.61 8.85 91.3
International tourist arrivals as of world population 3.51 11.36 222.9
Air passengers (millions) 748 1,656 121.4
5
Indicators of Globalization, Early 1980s Circa
2003
198081 19982003 Change
Air freight and mail (billions of ton km) 33 124 275.8
Internet hosts (millions) 0 165 undefined
Number of international organizations 14,2732 50,3734 252.9
6
Foreign Visitors per100 Population
7
The Sources of Globalization

• Technology - commercial jets, telephone, fax, and
  email
• Politics -countries that are politically isolated
  have less integration with the rest of the world.
• Economics- industrial capitalism is always
  seeking new markets, higher profits, and lower
  labor costs.

8
Transnational corporations

• Depend increasingly on foreign labor and foreign
  production.
• Emphasize skills and advances in design,
  technology, and management.
• Depend increasingly on world markets.
• Depend increasingly on massive advertising
  campaigns.
• Are increasingly autonomous from national
  governments.

9
(No Transcript)
10
McDonaldization

• The spread of the principles of fast-food
  restaurants, such as efficiency, predictability,
  and calculability, to all spheres of life.
• McDonalds now does most of its business outside
  the United States.
• McDonaldization has come to stand for the global
  spread of values associated with the United
  States and its business culture.

11
Regionalization

• The division of the world into different and
  often competing economic, political, and cultural
  areas.
• World trade is not evenly distributed around the
  planet or dominated by just one country.

12
Regionalization

• Three main trading blocs existan Asian bloc
  dominated by Japan, a North American bloc
  dominated by the United States, and a Western
  European bloc dominated by Germany.
• Each bloc competes against the others for a
  larger share of world trade.

13
Levels and Trends in Global Inequality

• The total worth of the worlds 358 billionaires
  equals that of the worlds 2.3 billion poorest
  people.
• The 3 richest people in the world own more than
  the combined GDP of the 48 least-developed
  countries.
• The richest 1 of the worlds population earns as
  much as the bottom 57.

14
Levels and Trends in Global Inequality

• According to the UN
• 800 million people in the world are malnourished.
• 4 billion people lack the ability to obtain
  adequate food, clothing, shelter, and basic
  needs.
• 1/5 of the developing worlds population goes
  hungry every night.

15
Global Priorities Annual Cost of Various Goods
and Services
Good/Service Annual Cost (U.S. billion)
Education for everyone in the world 6
Cosmetics in the U.S. 8
Water and sanitation for everyone in the world 9
Ice cream in Europe 11
16
Global Priorities Annual Cost of Various Goods
and Services
Good/Service Annual Cost (U.S. billion)
Reproductive health for all women in the world 12
Perfumes in Europe and U.S. 12
Health and nutrition for everyone in the world 13
Pet foods in Europe and U.S. 17
17
Number Living on Less Than 1 a Day
Percent Percent Millions Millions
Region 1990 1999 1990 1999
Sub-Saharan Africa 47.7 46.7 242 300
East Asia (excluding China) 27.6 14.2 452 260
South Asia 44.0 36.9 495 490
18
Number Living on Less Than 1 a Day
Percent Percent Millions Millions
Region 1990 1999 1990 1999
Latin America 16.8 15.1 74 77
East Europe and Central Asia 1.6 3.6 7 17
Middle East and North Africa 2.4 2.3 6 7
19
Theories of Global Inequality

• Modernization theory
• Global inequality results from dysfunctional
  characteristics of poor societies.
• Dependency Theory
• Economic underdevelopment is the result of
  exploitative relations between rich and poor
  countries.

20
Core, Periphery, and Semiperiphery

• Immanuel Wallerstein argues that capitalist
  development resulted in a world system composed
  of three tiers
• core capitalist countries - major sources of
  capital and technology
• peripheral countries - major sources of raw
  materials and cheap labor
• semiperipheral countries - former colonies that
  are becoming prosperous

21
Characteristics of Countries That Emerged From
Poverty

• Have a colonial past that left them with
  industrial infrastructures.
• Enjoy a favorable geopolitical position.
• Implement strong, growth-oriented economic
  policies and have socially cohesive populations.

22
Polling Question

• The citizens of poorer nations are more likely to
  be lazy when compared to the citizens of richer
  nations.
• Strongly agree
• Agree somewhat
• Unsure
• Disagree somewhat
• Strongly disagree

23
National Priorities, U. S. 2000 ()

• We are faced with many problems in this country,
  none of which can be solved easily or
  inexpensively.
• Im going to name some of these problems, and for
  each one tell me whether you think were spending
  too much money on it, too little money, or about
  the right amount.
• First, are we spending too much, too little, or
  about the right amount on . . .

24
National Priorities, U. S. 2000 ()
Priority Too Little
1. Improving and protecting the nations health. 73.2
2. Improving the nations education system. 72.0
3. Assistance for child care. 65.1
4. Improving and protecting the environment. 63.3
5. Dealing with drug addiction. 61.8
25
National Priorities, U. S. 2000 ()
Priority Too Little
6. Social Security. 61.3
7. Halting the rising crime rate. 60.9
8. Solving problems of the big cities. 51.7
9. Mass transportation 39.6
10. Improving the conditions of blacks, 37.9
26
National Priorities, U. S. 2000 ()
Priority Too Little
11. Parks and recreation 36.8
12. Highways and bridges 35.7
13. Military, armaments, and defense 24.7
14. Welfare 21.2
15. Space exploration program 15.0
16. Foreign aid 8.7
27
Polling Question

• Global environment problems can be solved without
  any international agreements to handle them.
• Strongly agree
• Agree somewhat
• Unsure
• Disagree somewhat
• Strongly disagree

28
Democratic Globalization

• Four reforms could change neoliberal
  globalization and turn it into democratic
  globalization
• Stronger support for democracy in the developing
  world.
• More and better foreign aid.
• Forgiving debt owed by developing countries to
  rich countries.
• Eliminating tariffs that restrict exports from
  developing countries.

29
Democratic Globalization

• Research shows democracy lowers inequality and
  promotes economic growth
• Makes it more difficult for elite groups to
  misuse their power.
• Increases political stability and provides a
  better investment climate.
• Encourages broad political participation.

30
Quick Quiz
31

• Which of the following are indicators of
  globalization?
• the growth in tourism
• the increasing number of international
  organizations and agreements
• the increase in international trade and
  investment
• all of these choices
• the increasing number of international
  organizations and agreements, and the increase in
  international trade and investment

32
Answer d

• The growth in tourism, the increasing number of
  international organizations and agreements, the
  increase in international trade and investment
  and, the increasing number of international
  organizations and agreements, and the increase in
  international trade and investment are indicators
  of globalization.

33

• 2. Transnational corporations
• rely on domestic labor and domestic production
• sell to domestic markets
• are increasingly autonomous from national
  governments
• all of these choices
• rely on domestic labor and domestic production,
  and sell to domestic markets

34
Answer c

• Transnational corporations are increasingly
  autonomous from national governments.

35

• 3. George Ritzer coined the term
  "McDonaldization" to describe
• a worldwide network of labor and production
  processes whose end result is a finished
  commodity
• the economic domination of one country by another
• a form of rationalization involving efficiency,
  predictability, and calculability
• the homogenization of many aspects of life
  worldwide

36
Answer c

• George Ritzer coined the term "McDonaldization"
  to describe a form of rationalization involving
  efficiency, predictability, and calculability.

37

• 4. Regionalization is
• a worldwide network of labor and production
  processes whose end result is a finished
  commodity
• a form of rationalization involving efficiency,
  predictability, and calculability
• the division of the world into often competing
  economic, political, and cultural areas
• the homogenization of many aspects of life
  worldwide

38
Answer c

• Regionalization is the division of the world into
  often competing economic, political, and cultural
  areas.

39

• 5. According to dependency theorists, rich
  nations now rely on which of the following to
  exercise domination and control over poor
  nations
• military occupation
• support for authoritarian governments
• substantial foreign investment
• all of these choices
• military occupation and support for authoritarian
  governments

40
Answer d

• According to dependency theorists, rich nations
  now rely on military occupation, support for
  authoritarian governments and substantial foreign
  investment to exercise domination and control
  over poor nations.

41

• 6. According to ______________, global inequality
  results from various dysfunctional
  characteristics of poor societies themselves.

42
Answer modernization theory

• According to modernization theory, global
  inequality results from various dysfunctional
  characteristics of poor societies themselves.

43

• 7. Peripheral countries are
• capitalist countries that are the major sources
  of capital and technology in the world
• former colonies that are major sources of raw
  materials and cheap labor
• former colonies that are making considerable
  headway in their attempts to industrialize
• colonies that have not yet gained independence
  and are therefore subject to exploitation

44
Answer b

• Peripheral countries are former colonies that are
  major sources of raw materials and cheap labor.

45

• 8. In a survey conducted in 2000 in which
  Americans were asked to list spending priorities,
  foreign aid ranked
• first on the list
• in the top half of the list
• in the bottom half of the list
• last on the list
• foreign aid did not make the list

46
Answer d

• In a survey conducted in 2000 in which Americans
  were asked to list spending priorities, foreign
  aid ranked last on the list.

47

• 9. A large body of research shows that democracy
  lowers inequality and promotes economic growth.
• True
• False

48
correct a

• A large body of research shows that democracy
  lowers inequality and promotes economic growth.

49

• 10. The United States supported Saddam Hussein
  during Iraq's war with Iran and funded Osama bin
  Laden when he was fighting the Soviet Union in
  Afghanistan.
• True
• False

50
Answer a

• The United States supported Saddam Hussein during
  Iraq's war with Iran and funded Osama bin Laden
  when he was fighting the Soviet Union in
  Afghanistan.