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what is globalization

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Betul Yalcin

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What is globalisation and in what ways does globalization affect social policy ?
In its general definition, globalization can be defined as an extensive network of
economic, cultural, social and political interconnections and processes which goes beyond
national boundaries’ (Yeates 2001) However its agreed that globalization ‘is not a policy
option but a fact to which policy makers must adapt’ (Wells 2004)
There are different views about the emergence of globalization, it has been regarded as
a result of technological development, but also derived from market economy. On top of that
there is another claim which says, globalization is an outcome of the capitalist progress
(Glazter & Rueschemeyer 2005). As advancement of communication technologies and the
increase in productivity necessitate states’ expansion of their market territory. The decline in
protective social policies, the increase in the incentives for foreign trade and the convergence
of free market economy, are all in line with these “perceived” global necessities. Increase in
the vulnerability to external fluctuations, shrinkage in the stability of domestic economies,
decline in domestic policy autonomy, and restructuring of governance are all accompanied by
globalization. The rise of globalization also overlaps with the acts of free trade of goods and
finances and the international evolvement of neo liberal programs. In this new frame, states
have become an agent which regulates the economic structure according to the wills of the
owners of capital and international coordination mechanism.
Following the orders of such mechanism is believed to have diverse effects on states’
position, operations and functions in the global community. With globalization, now states
began to have a limited number of agents to regulate its internal policies and create resources
for redistribution. In that term it could be argued that globalization endangers the social
welfare states since it rocks states’ sovereignty from its foundation (Deacon 2007; Schwartz
2001 As national governments become more open to the world, the external factors are
gaining more power in shaping the state’s social policy. Since globalization is found on the
principle of higher profit, the level of vulnerability a nation’s welfare policies faces depends
upon the state’s protection against adverse effects of globalization. Formerly welfare policies
were formed by taking the domestic situations into account, but in the “modern” era, it is
planed in such a way that it is not going to interfere with growth (Yeates, 2001).
It is believed that the level of influence is determined not only by the effects of
globalization but also the state’s capability to overcome these challenges (Glazter &
Rueschemeyer 2005). The degree of development and membership to international
coordination mechanisms seem to be the most important factors which affect a state’s social
Betul Yalcin
Essay MSc. Comparative Social Policy Programme
University of Oxford, 2009

welfare policies in an integrated world. Developing countries or those which are at the lower
end of the global hierarchy within the international “coordination” mechanisms suffered
more. Developed countries attempt to mend incentives to increase their profits, in order to
attract capital inflow into their markets. In such a competition, developing countries generally
sacrifice their social responsibilities to meet global challenges. Former social welfare states
converge into different types of stingy regimes. It is believed that globalization will lead
further exclusion (Garrett & Mitchel, 2001; Yeates 2001). Formerly, states have been allowed
to implement national social policies without preoccupation of the external impositions, but
the rise of globalization turns this anterior equilibrium upside down.
The contemporary global events unfortunately further decrease states’ sovereignty
within their boundaries as they are surrounded by the pressure from multi-national
corporations and international capital organizations (Deacon 1997), joining to international
organizations are also effects social welfare policies of governments. Because states accept to
waive its rights to speak on internal economic affairs. Those states which are dominated by
financial sectors start to accept the pressures on decreasing the social welfare expenditures
(Jaeger & Kvist, 2003).
On the other hand international organizations such as the United Nations increase its
involvement on social issues, on the principle of providing a dignified life for those in need.
As a result, recent crisis, the global stock markets have fallen dramatically, giant
multinational companies have started to close its branches in other parts of the world, large
financial institutions have collapsed, and more importantly wealthiest governments, most of
them are leading liberals, have to prepare packages to rescue their financial systems. This
global financial meltdown is believed to affect the lives of millions of people all around the
world. The American free-market creed has self-destructed while countries that retained
overall control of markets have been vindicated’ (Shah 2008).
In terms of its effect on other parts of the world, it can be said that for the developing
world, the effects of worldwide financial global instability are doubled in magnitude. High
fuel costs, high goods prices together with growing uncertainties in the face of global
recession make governments worry about the future growth rates. On the other hand
countries which are located in Africa, the less integrated continent, are believed not to be
affected by the global crisis (Shah 2008). In the European continent, some major financial
institutions have failed or come to a position to be saved. A number of European countries are
attempting to nationalize major institutions or to provide assurance for their people in case of
 Betul Yalcin
Essay MSc. Comparative Social Policy Programme
University of Oxford, 2009

failure. The European Union actively takes the recent crisis as the most serious threat since its
foundation and prepares an agenda to overcome its adverse effect. If the Union succeeds with
given tools and agendas and fulfils this mission, it seems that it will strengthen its position in
the global scene. Conversely, in case of failure, that would unavoidably lead to the weakening
of the Union and plant the seeds of its ultimate break up (Goldschmitt, 2008).
In conclusion social welfare policies which are constructed to overcome the common
problems of the community are adversely affected by globalization. However, the degree of
influence depends upon the structure of each state and its strength to stand against negative
pressures of globalization. These adverse effects are more severe for the developing countries
and for the group of citizens who are already at risk. At this point it can be said that
globalization alternates the global landscape; however, it is not thought to erase all states from
the arena. Instead it can be said that globalization of the economies hollow out the welfare
policies. This reduction in the social welfare expenditures increases the risk of poverty, social
insecurity and triggers social dissolution and alienation at the end.

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