WESLEYAN UNIVERSITY-PHILIPPINES

Cushman Campus
Mabini Extension, Cabanatuan City
Philippines, 3100

Subject Code: GEC 8

Subject Title: The Contemporary World

MODULE 3: Structures of Globalization

Learning Outcomes
At the end of this lesson, students should be able to:
1. Describe economic globalization;
2. Detect the players that ease economic globalization;
3. Describe the contemporary world system; and
4. Articulate a posture on global economic integration.

Learning Activities:
Asynchronous Discussion: On the canvas tab “Assignment”, Module 3: Structures of Globalization, give
your insights on the provided guide questions.
Reference: A Course Module for The Contemporary World (Nephtaly Joel B. Botor, Eric Paul D. Peralta,
Raphael M. Ferrer, Jennifer Marie S. Amparo, Teri-Marie P. Laude)

Introduction
As discussed in the earlier section, central to the discussion about globalization is its economic dimension. The
phenomenon of economic globalization includes greater integration of economic activities, products, and systems
across the globe. As Szentes (2003:69) argues, globalization in economic terms extends economic projects and
relations transnationally and promotes economic interdependencies among different countries.

It is important to note that economic globalization goes beyond internationalization. Economic globalization
involves the integration of functions and processes of economic activities. (Dicken, 2004). This means that
economic integration requires not just having an international consumer or exporting goods from one country to
another, but also involves creating institutions for market integration and globalization.

In this section, we will deepen our discussion on economic globalization. Specifically this lesson aims to answer
“Who are the actors that drive economic globalization?” and: What is the modern world system?” At the end of
this lesson, students should also express their stance on the ongoing global economic integration.

All things work together for good to them who love God, to them who are called according to His purpose
- Romans 8:28

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 Definition of Terms:
 Economic globalization – the expansion of national economies, the global market driven by modern
technologies and institutional set ups that promote faster and easier flow of goods and capital (Sugden and
Wilson, 2005).
 Global economy – denotes that the economies of various countries are more interconnected from extraction,
production, distribution, consumption, to disposal of goods and services (Carfi and Schiliro, 2018)
 International financial institutions – global financial institutions that support a country’s economic growth
through support (i.e., loans, technical assistance) to governments and now other private sectors (Wood, 2019).
 International Monetary Fund – an international organization with 183 member countries that promotes
international monetary cooperation and exchange stability to foster economic growth and high employment and
to provide short-term financial assistance to countries to help ease balance of payments adjustments (IMF, 2019).
 Global civil society – a system of nongovernment institutions that operate across geographical borders and
organize and mobilize for a common issue or cause (Keane, 2003: 8).
 Global corporation – an “enterprise that engages in activities which add value (manufacturing, extraction,
services, marketing, etc.) in more than one country” (UCTC, 1991).
 World system – based on the theory of Wallerstein (1974) that recognizes that social and economic change is not
only endogenous to a country, but is affected by its interaction to exogenous institutions, thus the focus on world-
systems (Chase-Dunn, 2018).
 Economic integration – a process of combining or increasing the interconnectivity of national economies to the
regional or global economies (Clark, et. al., 2018).

Body:
DEFINITION OF ECONOMIC GLOBALIZATION
Most of the definitions of globalization centers on its economic dimensions. Economic globalization is driven by
the “growing scale of cross-border trade of commodities and services” (Shangquan, 2000:1). Critical to economic
globalization is global economic integration. Economic integration means that separate production operations are
functionally related to each other and form a unified product or service. This requires efficient management of
economic operations from different areas in the world. In current times, this is made possible by innovations in
transport logistics, modernization of communication and transport systems, policies supporting integration of
different process along the globe, among others.

The various definitions of the economic globalization focus on increasing economic trade interrelations among
countries (Stager, 2010; Al-Rodhan, et. al., 2006; Shangquan, 2000). This is governed by neoliberal principles
with the role of the market as a central driver of economic activities, with less government intgerventions (Martin,
Schumann & Camiller, 1997). Economic globalization entails global industrial restructuring and readjustments
where developed countries play a dominant role (Shangquan, 2000:3).

However, the process of global economic integration is not a modern phenomenon. The voyages of earlier
explorers including the formation of empire (i.e., Roman empire) were critical in intercontinental trade and were
also a precursor of modern economic globalization. Chinese, and even earlier, trades in Asia also serve as first-
forms of economic expansion and later integration. Gills and Thompson (2006:1) argues that the globalization
processes “have been ongoing ever since Homo sapiens began migrating from the African continent ultimately to
populate the rest of the world”. Explorations in earlier times tend to focus on a relatively smaller target of
commodities of high value like spices, tea, gold, or other precious metals. The difference now is the extent and
reach of economic globalization, restructuring of economic systems, and the dominant influence of the private
sector in the global economy (Shangquan, 2000).

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Who are the Actors that Facilitate Economic Globalization?
Globalization has opened the doors for other non-state authority and actors in driving economic globalization
(Madsen & Christensen, 2016; Sassen, 2006). Non-state actors include international economic organizations,
private sector led by multinational companies, central banks, and civil society. Let us discuss how each actor
contributes to economic globalization.

First are international economic organizations such as the International Monetary Fund, World Bank, and
Organization for Economic Cooperation and Development (OECD). These organizations are critical in
developing and pushing for neoliberal policies among different countries. They also help facilitate trade and
development discussions among various states. Another example are regional organizations such as the
Association of Southeast Asian Nations (ASEAN) and North American Free Trade Agreement (NAFTA). These
organizations promote regional agreements and standards that facilitate better trade and exchange of knowledge,
human resources, and regional cooperation. The Group of 8 (G8) and G20 are advisory organizations that discuss
current economic and political problems and transfer of ideas from the groups’ forum to national legislative
regulations (Shangquan, 2000:280).

Second are multinational companies (MNCs), which are considered to be the main carriers of economic
globalization (Shangquan, 2000:2). In 1996, there were 44,000 MNCs in the world with 280,000 overseas
subsidiaries and branch offices (ibid). In 2006, there were 88,000 MNCs identified (UNCTAD, 2007). In earlier
times, trade companies such as the Dutch and British East India, Muscovy Companym Royal African Company,
and Hudson Bay Company were precursors of the modern day MNCs (Hirst & Thompson, 2002). MNCs started
to emerge during World War II when US industrial production increased by 44 percent (Strange, 1996).

Other prime movers of economic globalization are central banks. They are considered one of the most powerful
institutions in the world economy since they can lead economic development, and some authors contend that
central bank governors are more influential in their own national economy than some politicians (Shangquan,
2000:280).

Lastly is the global civil society as a major driver of economic globalization. The global civil society has made its
mark in global development arena particularly during the UN Conference on Environment and Development in
1992 (Keane, 2003). Global civil society seen as either composed of individuals or groups of individuals
disadvantaged by the effects of the globalization of the world economy, they protest and seek alternatives while
on the other hand, global social movement constituting a basis for an alternative to a new world order (Gherghel,
n.d.). Part of the global civil society are Transnational Advocacy Nertworks (TAN), networks which are
“organized to promote causes, principles ideas, and norms, and they often involve individuals advocating policy
changes that cannot be easily linked to a rationalist understanding of their “interests” (Keck & Sikking, 1998:8-9).

International Monetary Fund (IMF)

The IMF is an international organization of 183 member countries to promote international monetary cooperation
and exchange stability; to foster economic growth and high employment; and to provide short-term financial
assistance to countries to help ease balance of payments adjustments (IMF, 2019).

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International Financial Institutions
The generic name given to all financial institutions operating on an international level, ranging from development
banks, such as the World Bank and the European Bank for Reconstruction and Development (EDB), and
monetary authorities, such as the International Monetary Fund. These organizations give loans to governments for
large-scale projects, restructuring and balance of payments on condition that they make specific changes that IFIs
believe will boost economic growth (Shangquan, 2000).

Transnational Corporation
Enterprise that engages in activities which add value (manufacturing, extraction, services, marketing, etc.) in more
than one country (UCTC, 1991).”

G8 and G20
Group of nations that serve as an advisory organization that discuss current economic and political problems and
transfer the ideas from the forum in national legislative regulations (Weiss, 2018).

Global Civil Society

Either composed of individuals or groups of individuals disadvantaged by the effects of the globalization of the
world economy, they protest and seek alternatives while on the other hand, global social movement constituting a
basis for an alternative to a new world order (Gherghel, n.d.; Keane, 2003).

What is the Modern World System?

The seminal work of Immanuel Wallerstein on the world-system theory (1974) is a critical reference in the
theorization of globalization. In this work, he expounded on the theory on how the core came to dominate the
periphery areas particularly in the economic world system as a basis of his analysis. This transgresses from the
traditional analysis of colonization with nation-state as starting point.

For Wallerstein, a world system constitutes a social system composed of boundaries, Structures, member groups,
rules of legitimation, and coherence (Wallerstein, 2011). World economy, according to Wallerstein, is divided
into core states and peripheral areas including semi-peripherals. According to the world-system theory, the
peripherals are mostly where production or raw materials are sourced out, while the semi-peripheral processed or
distributed the products to the core areas – sites of major demands for goods and services. (Wallerstein, 2011).
There are significant and meaningful movements of resources, products, people in different economies facilitated
by modern transport and communication (Chase-Dunn, 2018).

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 Slice of Life by Larry Alcala

SUMMARY:
This lesson sets out to answer the following question:
1. What is economic globalization? – Economic globalization is the expansion of national economies, the
global market driven by modern technologies and institutional set ups that promote faster and easier flow
of goods and capital (Sugden & Wilson, 2005). The global economy is a product of this economic
globalization where each countries’ economies are more interconnected and affected by each other.
2. Who are the actors that drive economic globalization? – There are different actors and institutions that
drive economic globalization, most of which are non-state actors. These include international economic
organizations like IMF, WB, ADB; central banks; private sectors led by MNCs; and civil society. These
organizations affect trade and economic policies and serve as source of support (funds, services,
technical) for economic globalization.
3. What is the modern world system? – The modern world system is based on the theory of Wallerstein
(1974), which posited that the global economy is divided into the core, semi-periphery, and periphery.
The core is the center of economic activities where most of the population lives and economic institutions
and services are based. However, majority of the raw materials and productions are done or sourced out in
the periphery. The semi-periphery areas serve as distributors or add value to the raw materials by
processing them for the core areas.

CREATE:
Create a map showing a city center. Select a city where your school is located or a particular city of choice.
Illustrate the key city features like roads, settlements, services, infrastructure, etc. Then, indicate the surrounding
areas of the city in the north, east, west, and south. Finally, draw lines showing:
1. Source of food (where does the city source its food?);
2. Source of services (where do people secure health services? Where do children go to school? Where do
people source their water and electric utilities?); and
3. Employment (where do people work? What are the types of work? How long is their commute?).

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Reflect:
1. Where are most of the services and community activities concentrated? How about the population?
2. Where do the people commonly source their food? Do they produce their own food or import from other
areas? If sourced out, how far from the city center are these food production centers?
3. Where do people usually work? What types of work are available in the city center? Nearby towns?
4. What are the implications of this land use pattern on family life? Community life?

BIBLIOGRAPHY:
 Definitions of Globalization: A Comprehensive Overview and a Proposed Definition. Program on the
Geopolitical Implications of Globalization and Transnational Security, 6(1-21), Al-Rodhan, N.R., &
Stoudmann, G. (2006)
 An Environmentally Sustainable Global Economy. A Competitive Model, Carfi, D., Donato, A., &
Schiliro, D. (2018)
 The New Oxford Handbook of Economic Geography. Oxford University Press. Clark, G.L., Feldman,
M.P., Gertler, M.S., & Wojcik, D. (Eds.). (2018).
 Geographers and Globalization: (Yet) Another Missed Boat?: Transactions of the Institute of British
Geographers, 29(1), 5-26. Dicken, P. (2004)
 Non-State Actors in the Globalization of the Economy, Gherghel, Laura, (n.d.)
 Globalizations, Global Histories and Historical Globalities. Globalization and Global History. Gills, B.K.,
& Thompson, W.R. (2006)
 The Future of Globalization. Cooperation and Conflict 37.3 (2002): 247-265, Hirst, Paul, and Grahame
Thompson
 The IMF and the World Bank. Retrieved from International Monetary Fund:
https://www.imf.org/en/About/Factsheets/Sheets/2016/07/27/15/31/IMF-World-Bank
 Global Civil Society. Cambridge: Cambridge University Press. Keane, J. (2003)
 Activists Beyond Borders: Advocacy Networks in International Politics. Ithaca, NY: Cornell University
Press. Keck, M., & Sikkink, K. (1998)
 Global Actors: Networks. Elites and Institutions. Politics. Doi: 10.193/acreforce/9780190228637.013.9.
Madsen, Mikael Rask and Christensen, Mikkel Jarle (2016)
 The State and Globalization: Denationalized Work and Internal Power Shifts. Unpublished paper part of a
multi-year research project. Sassen, S. (2006)
 Economic Globalization: trends, risk and risk prevention. Economic & Social Affairs, CDP Background
Paper 1. Shangquan, G. (2000)
 Globalization. Sterling Publishing Company, Inc. Steger, M.B. (2010)
 The Retreat of the State: The Diffusion of Power in the World Economy, New York: Cambridge
University Press. Stange, S. (1996)
 Economic Globalisation: dialectics, conceptualisation and choice. Contributions to Political Economy,
24(1), 13-32. Sugden, R., & Wilson, J.R. (2005)
 World Economics 2. The Political Economy of Development. Globalisation and System Transformation.
Szentes, T. (2003)
 UCTC (1991). University Curriculum on Transnational Corporations: Vol. III International Law. New
York: United Nations
 World Investment Report: Transnational Corporations, Extractive Industries and Development.
Switzerland. 294 pages. UNCTAD (2007)
 The rise and future demise of the world capitalist system: Concepts for comparative analysis.
Comparative studies in society and history, 16(4), 387-415. Wallerstein, I. (1974)

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  The modern world-system I: Capitalist agriculture and the origins of the European world-economy in the
sixteenth century (Vol. 1). University of California Press. Wallerstein, I. (2011)
 The United Nations and changing world politics. Routledge. Weiss, T.G. (2018)
 The G7, International Finance, and Developing Countries. Shaping a New International Financial System:
Challenges of Governance in a Globalizing World. Wood, D. (2019)

Prepared by: Checked by:

Arnold C. Eugenio Ferman Lazatin

CAS Faculty Program Head
Department of Humanities
and Social Sciences

Noted by:

Dr. Marietta B. Agustin

Dean
College of Arts and Sciences

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