ADDIS ABABA UNIVESITY

PHILOSOPHY OF INTERNATIONAL BUSINESS AND STARATEGY

INTERNATIONAL BUSINESS ENVIRONMENT COURESE

Article review- Individual Assignment
On
Populism and economics of globalization, Globalization paradox, Globalization and its
discontents, civilization the west and the rest and straight talk on trade (less globalization more
growth)
Tesfamaryam
1. Populism And The
Economics Of Globalization  an anti-establishment orientation, a claim to speak for
the people against the elites, opposition to liberal
Dani Rodrik, 2018 economics and globalization
 advanced stages of globalization are prone to populist
backlash
• The author tray to address two questions:
1. what are the economic roots of populism?
2. what are the factors that affect the emergence of right-
versus left-wing populism?
Populism And The
Economics Of It is easier for populist politicians to mobilize
along ethno-national/ cultural cleavages when
Globalization the globalization shock becomes salient in the
form of immigration and refuge
It is easier to mobilize along income/social
class lines when the globalization shock takes
the form mainly of trade, finance, and foreign
investment.
The economic anxiety and distributional
struggles exacerbated by globalization
generate a base for populism,
TRADE AND
REDISTRIBUTION
(trade Liberalization) The low-skilled workers worse of their life

The effect of trade liberalization is to raise the domestic price

of exportable relative to importable.

local labor-market effects of specific trade shocks. There is

also the question of trade’s effect on the overall levels of
earnings and employment.
 the gains from trade can be redistributed to
COMPENSATION AND compensate the losers and ensure no identifiable
SAFETY NETS group is left behind

 Finally, it is worth noting that the nature of

TRADE,REDISTRIBUTION, trade agreements has changed over time,
AND FAIRNESS rendering them more divisive in terms of value
and fairness considerations.
 Trade deals increasingly reach behind the
border to harmonize domestic regulations.
 This is a form of economic integration that is
called deep integration
 populism
Hence there are two cleavages/division: an ethnonational/
Left wing/ cultural cleavage and an income/social class cleavage.
socialist and
right wing populist politicians mobilize support by exploiting one or the
other of these two cleavages.
The ‘‘enemies of the people’’ are different in each case.
1. 1. Populist who emphasize the identity cleavage target
foreigners or minorities, and this produces right-wing
populism.
2. Those who emphasize the income cleavage target the wealthy
and large corporations, producing leftwing populism.
 • Most failures in the world economy are rooted in failures
CONCLUSION of domestic governance.
• The appropriate role for global institutions is to enhance
key democratic norms of representation, participation,
deliberation, rule of law, and transparency without
prejudging policy outcomes or requiring harmonization.
• globalization must focus on areas where the net gains are
large.
• The rules that need to be developed are those that
emphasize fairness, address concerns of social dumping,
and enhance policy space in both developed and
developing nations.

2. The Globalization Paradox:
Why Global Markets, States,
and Democracy Can’t Coexist.
Dani Rodrik. Oxford
University Press. March
2011.
believes in the power of globalization to lift
millions out of poverty and create widespread good
but only if it is done more thoughtfully.
The paradox is essentially that in order for
globalization to bring proper economic benefits that
are broadly distributed throughout society, national
democracies need to be strengthened and
international rules need to be in place, that protect
all players,
whilst still allowing for maneuverability and
enterprise.
This is in contrast to the oft-cited doctrine that the
true powers of globalization can only be harnessed
when there is a complete free flow of capital with
minimal regulation.
• Rodrik sets out that the rights of democracies to protect their own social
arrangements should out-trump the requirements of the global economy.
• new narrative, one that looks at fairness and sustainability as well as growth, and
has a truly global outlook that allows for individual countries to make their own
financial arrangements and models, but within a multinational framework of
governance and regulation. He believes that achieving such lofty goals is possible
and can avert future crises.
3. Joseph E. Stiglitz
(2002), Globalization and
Its Discontents book The bulk of JES’ accusations is that globalization is a boon
only if it is properly governed, but the International Economic
Institutions (IEIs) and, primarily, the International Monetary
Giovanni Ferri, 2018 Fund (IMF) that should ensure such a governance have failed
the task.
 The conclusion is that the IMF and the other IEIs (i.e., the
World Bank and the World Trade Organization) have to be
reformed to deliver policies that will make globalization more
equitable and, thus, avoid that it is perceived by many around
the world more as a problem than as an opportunity.
 Lacking such reform, JES admonishes, discontents might
grow: Globalization might be checked and its great potential
benefits might go lost.
 The international organizations are failed due to one size fits all
policies to all global business problems.
4. Niall Ferguson, The mainsprings of global power – were six identifiably novel
Civilization: The West complexes of institutions and associated ideas and behaviors
and the Rest, Allen 1) competition – a decentralization of both political and
Lane, Penguin Books, economic life, which created the launch-pad for both nation-
London, 2011 states and capitalism;
2) science – a way of studying, understanding and ultimately
Andrei Josan 2012 changing the natural world, which gave the West (among
other things) a major military advantage over the Rest;
3) property rights – the rule of law as a means of protecting
private owners and peacefully resolving disputes between
them, which formed the basis for the most stable form of
representative government.
; 4) medicine – a branch of science that allowed a major improvement in health
and life expectancy, beginning in Western societies, but also in their colonies;
5) the consumer society – a mode of material living in which the production
and purchase of clothing and other consumer goods play a central economic
role, and without which the Industrial Revolution would have been
unsustainable;
 6) the work ethic – a moral framework and mode of activity derivable from
(among other sources) Protestant Christianity, which provides the glue for the
dynamics and potentially unstable society
5. Straight talk on trade. Theory implies that unskilled labor will lose from open
Princeton University Press.
trade policies in advanced economies. But when
economists talk publicly about trade, it is always the
Rodrik, D. (2017). aggregate gains they emphasize
less globalization and more growth are needed.
He proposes green industrial policies and public
investment to spur growth. The most novel idea is an
“innovation fund,” a public venture fund for new
technologies whose profits would be returned to citizens
as an income supplement
Rodrik, does not endorse protectionism or embrace
deeper economic integration. Instead, he thinks
domestic policy space is need to manage existing
globalization.
 The authors of the articles discussed that;
Conclusions  Impacts of Globalization in developing and
developed countries
 Faire economic distribution and employment
opportunities
 National government demand to framing their
policy aligned with international environment
laws and regulations