Access how governments have accelerated globalisation (12 marks)

The role of of governments in globalisation is mixed -some governments (usually from richer,
more developed countries) contribute towards the acceleration of globalisation - for example
MEDC’s such as Britain and the USA are some of the countries that are in uencing the
acceleration of globalisation.

One way in which governments have assisted globalisation is through free trade liberalisation
- this involved removing trade barriers to help trade between di erent countries and to
encourage free trade - it mainly includes reducing tari s and quotas. The market is opened up
to many di erent countries and compaines trading under the same market. The UK is an
example of a government that is part of the free trade liberalisation, for example, in 2012
trade accounted for 651.8% of the UK’s national income, this would not be possible without
free trade and so this has helped accelerate globalisation. Some of the ways this is achieved
is through lower prices - the removal of tari barriers can lead to lower prices for consumers,
for example, removing food tari s can help decrease the price of agricultural commodities.
This bene ts countries who are importers of food, Another aspect is increased competition -
rms will face greater competition from abroad - this leads to an incentive to increase
e ecinecy and to cut costs. For example, the UK was encouraged to concentrate on the
service sector instead of manufacturing. Free trade liberalisation also increases the positive
multiplier e ect - which indicates a spending (wether it be exports, government spending or
investment) that leads to a rage increase in GDP. However, free trade liberalisation also comes
with some negatives and ultimately ways that limit globalisation - these are of structural
unemployment and environmental costs, Some of these environmental costs are where trade
liberalisation leads to a greater exploitation of the environment where there’s greater
production of raw materials which produces high CO2 emissions.

Another way in which governments have accelerated globalisation is through privatisation of

companies. This is where the big companies such as gas, water and electricity that used to
be owned by the government are sold o to private companies (hence the name privatisation)
Some bene ts of this are that there is improved e ciency - these new private companies
have a pro t incentive to cut their costs and therefore this leads them to be more e cient. An
example of these companies that have slowly become more e cient are British Airways.
Another bene t of privatisation of the governments sometimes only think as far as the next
election period and are therefore hesitant to think of long term strategies to x problem such
as places needing investments infrastructure as it will carry over the governments term and
the people will have less faith meaning they’re are less likely to be reelected. Like free trade
liberalisation, privatisation also increases competition between companies, more rms are
allowed to enter the industries, for example there is new competition between gas and
electricity distribution. However there are also negatives to privatisation that may limit
globalisation one main idea of this is the fragmentation of industries - in the UK the rail
industry is an example of this. The rail companies in the UK are spilt into many di erent
sectors which makes it unclear in some places about who has responsibility. So therefore
privatisation both accelerates and limits globalisation.

Finally, another way in which governments have accelerated globalistaion is through trade
blocs. A trade bloc is an intergovernmental agreement and organisation in which trade
barriers - tari s and quotas are reduced for trade within the member states. An example of a
trade bloc would be ASEAN (the association of SouthEast Asian Nations) This trade bloc
promotes economic and political security for its 10 member states, it also encourages
collaboration for economic trade ad growth. Trade Blocs increase the speed and length in
trading which could contribute to Harveys time and space compression, it is also said that
trade blocs make negotiations easier. The positives of trade blocks are that: Tari reduction or
removal leads to trade creation where there is lower prices for consumers but good
opportunities for exporters, the increased trade also allows for increased specialisation and
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so there are lower costs as each place has one job they are focusing on. They, like
privatisation and free trade liberalisation, increase competition between rms, this is done by
the removal of tari s (which creates greater choice in products for consumers). Another main
way in which Trade Blocs bene t globalisation is through the fact that it gives smaller
countries a day in global trade agreements and laws which can help their own governments
develop. However, trade blocs have some disadvantages, one of these may be the loss of
independence a country faces when it enters a trade bloc - each trade bloc makes decisions
for every English member and so if there are disagreements these are harder to solve and so
some countries may not get what they want. Therefore trade blocs have helped governments
accelerate globalisation in ways that mean there is increased trade and easier trade between
countries however it has also limited globalisation as they build up an interdependence which
means countries start relying more and more on each other making less global decisions.

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