11.6.1 Meaning and causes of globalisation
Definition: Globalisation is the increasing integration and interdependence of the world's economies through growing trade in goods and services, flows of capital and investment, movements of people, and the spread of technology, information and culture.
- Causes: falling transport costs (containerisation) and communication costs (internet, mobile); trade liberalisation through the WTO and trade agreements; liberalisation of capital flows; growth of MNCs and global supply chains; economic reforms opening China (1978), India (1991) and Eastern Europe; growth of emerging-market middle classes; digital platforms enabling trade in services.
- Consequences: benefits — faster growth, lower prices and more choice, technology transfer, larger markets and economies of scale, poverty reduction in emerging economies, more FDI; costs — structural unemployment in industries facing import competition, rising inequality within countries, loss of policy autonomy, financial contagion (2008 crisis), environmental damage and emissions from transport, exploitation of workers, cultural homogenisation, vulnerability of supply chains (COVID- 19). Recent trends: "slowbalisation", reshoring and friend-shoring, and rising tariffs.
🔒 Also in the full notes
- 11.6.2 Types of trading blocs: free trade areas, customs unions, monetary unions and full economic unions
- 11.6.3 Trade creation and trade diversion
- Exam practice: 4 practice questions
- 3 exemplar 20-mark essays with full model answers, mark breakdowns and common mistakes
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