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Benefits of Globalization Essay

The worldwide movement toward economic, financial, trade, and communications integration. Globalization implies the opening of local and nationalistic perspectives to a broader outlook of an interconnected and interdependent world with free transfer of capital, goods, and services across national frontiers. However, it does not include unhindered movement of labor and, as suggested by some economists, may hurt smaller or fragile economies if applied indiscriminately.

Globalization is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture. Put in simple terms, globalization refers to processes that promote world-wide exchanges of national and cultural resources. Advances in transportation and telecommunications infrastructure, including the rise of the Internet, are major factors in globalization, generating further interdependence of economic and cultural activities.

What is Corruption? Transparency International defines corruption as the abuse of power for private advantage. In effect, corruption is a legal wrong arising from a particular conduct or activity and suggests moral bankruptcy of an individual, a bureaucracy or a business.

Scholars have identified a number of different kinds of corruption. For example, it is argued that one can distinguish between political and bureaucratic corruption and parochial (to achieve status) and market corruption (for money) and

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that recognising the motivators behind these different kinds of corruption can be useful in determining ways to combat the problem. A distinction is also made between grand corruption and what is known as facilitation payments, grease payments or petty corruption. Grand corruption involves the making of large payments to people in positions of power in order to secure a right or obtain an advantage that could not be secured or obtained legitimately. Petty corruption involves the payment to minor officials of small amounts of money toward securing a right that is legitimately due.

For example, paying extra to have a telephone installed or to have it installed more quickly. Petty corruption, while not condoned, is considered to be of less concern than grand corruption. This is because the motivators behind, and the consequences of, petty corruption differ significantly from those of grand corruption. That is, facilitation payments are not considered to distort international trade or the economy nor are they considered to undermine the economic development of a country. While it is understood that in many countries facilitation payments can impose a direct burden, particularly on the poor, and sometimes are the most ‘visible’ face of corruption, the international effort toward combating corruption, and the focus of this paper, is on grand corruption.

Does increasing globalisation mean increasing corruption? There is no empirical evidence to suggest that increasing globalisation has led to increasing corruption. Certainly, since the early 1990s there has been more evidence of corruption than previously. But this also could reflect the cessation of the Cold War which, it could be argued, ensured the corrupt activities of politically strategic politicians remained conveniently overlooked. It is clear, however, that unless concerted action is taken, the level of corruption will only increase. What is required to curb corruption is both the reform of the public sector in those nations where corruption is most endemic (as well as others) and a change in attitude by the private sector.

Increased numbers of wealthy companies trading around the world cannot help reduce corruption unless they commit themselves to not give bribes. And there is evidence to suggest that countries with strong anti-corruption programs are seen to prosper. For example, a 1997 study concluded that if the corruption occurred in Singapore to the same extent as Mexico – it would be equivalent to increasing the tax rate on the foreign investor by more than 20%. Accordingly, it concludes that increased corruption has the same deterrent effect on investment as increased taxes.

Benefits that accrue from globalization :

Globalisation enables greater trade and competition between different economies, leading to lower prices, greater efficiency and higher economic growth – and it has also enabled increased levels of investment. It has made it easier for people to attract short term and long term investment (investment by multinational companies can play a big role in improving the economies of developing countries). These countries also gain from globalization as it offers access to foreign capital, global export markets, and advanced technology; while breaking the monopoly of inefficient and protected domestic producers. While globalization may confront government officials with more challenging decisions, the result for their citizens is greater individual freedom. There is arguably less cultural diversity.

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