New Rules of Globalization - Assignment Example

New rules of globalization s Submitted by s: Introduction Globalisation is at a whole new level considering that before 2008, it was steadily on the rise but after the recession, it has experienced a new phase that some consider to be the guarded globalization (Freidman, 2005, p. 2). This has been characterised by decreased opportunities for the multinational companies to pursue new markets as a result of the local governments wish to protect the local companies and developing a more selective approach in relation to the countries to allow and the industries to trade with (Salvendy, 2001, p. 28). Among the main reasons for guarded globalisation is the fact that policy makers in various markets create policies as well as international laws that put the local businesses at an advantage while creating more hurdles for international companies. Cases where the government regulates the wealth of the markets as well as the economic development of the country through some form of State capitalism in the emerging markets and recently in the developed markets have brought changes to the free markets and consequently changed globalization. Business that originate in the western world and operate in the emerging market progressively need to compete with the local business that have financial and political support while at the same time having to prove their strategic value in the host market. Regardless of this bleak picture, foreign corporations still have a chance of succeeding in local markets (Freinkman, 2002, p. 79). For instance, in the new phase of globalization, the industries that were initially out-of-bounds may be the best source of strategically important opportunities. In the process of this new phase of globalisation, the foreign businesses can stay at home and increase their strategies at home, get and increase the support of the host as well as the home government, foster alliances with the host countrys businesses and develop more diversity. International economic rules International economic rules symbolise the standards of behaviours associated with governments, organizations as well as citizens, and they represent a type of self-commitment in such a system (Peil and Staveren, 2009, p. 186). Thus in relation to any system of rules, a negative index can be detected in the form of a sequence of limitations on the behaviour of countrywide governments. These constraints are aimed at a safeguarding international division of labour against conflicting interests from various national governments and the self-commitment of the states also acts as a shelter against the power of protectionist groups in the national economies. Wide-reaching rules develop importance in a globalizing world economy in which economic interdependence between nations is increasing and in the same way, the development of property rights as well as other rules have pursued the escalation I the scarcity of goods in mankind’s history so the international rule system has to play along with the increased interdependence between countries (Büthe and Mattli, 2011, p. 60). In the economic circles, rules deal with many areas especially the international division of labour in trading with goods as well as services and competition policy, capital flow as well as the diffusion of technology and other attributes that include labour and human capital. Global governance Global governance was initially perceived as being of a regulatory nature and even though global agencies might generate norms through intergovernmental processes, the execution of these norms were traditionally the purview of states or other exceptional entities like the EU (Grugel and Piper, 2007, p. 4). The restricted perception of global governance is not acceptable anymore, and areas like the environment, as well as global security, are subject to not just regulation but also to global administrative control also. Most of the activities at the EU started as an economic idea that had political implications, the regulation of the economy as well as administration and has consequently lead to the development of global administrative law. Important frameworks currently include the WTO, the OECD as well as the G8 which is a group that consists some of the major industrial democracies, and environmental regulation has got the attention of far-reaching regimes such as the Kyoto protocol. However, the most rapid growth in administration in the recent times has been seen in international security and in addition to assertion of increasing powers over post-conflict territory in the 1990s the sanctions committees of the UN security council arrives at decisions regularly and this has substantial impact on nations and individuals (Wilkinson, 2005, p. 207). A more basic test when importing administrative law ideologies to global administration is the framework of the authority and the countrywide institutions of governance are typically organised in a hierarchical manner with power distributed according to a constitution or a fundamental law. Global as well as national agencies of governance usually operate in an environment that is less structured which is driven by negotiation as most of the authority is derived from the nations whose consent allows them to have legitimacy (Horowitz, 2011, p. 4). The horizontal framework of certain types of global administrations is easily seen in mutual recognition regimes which specify that a product or service that can be sold in a lawful manner in one jurisdiction may also be sold without restrictions in a different jurisdiction that is part of the framework. The regimes that are articulated as treaties are being replaced by technology such as satellite television and internet and this makes it progressively impractical for one nation to exit the globalised commercial sphere (Chesterman, 2008, p. 43). Structure of global rules The prevailing era of globalization has escalated the demand for global regulatory coordination and this has affected a number of diverse issues such as the standards of labour, protection of the environment, supervision of the banking industry, health and safety of consumers as well as the rates of taxes among others (Drezner, 2008, p. 209). Great powers are the key actors that influence the setting of global regulatory standards and the states that yield more power use coercion, enticements, delegation as well as forum shopping in various global institutions so that they can be able to advance their preferences. Coordination may only take place in the event that public goods collaboration will be more than the overheads of distribution associated with altering domestic regulatory principles. In a model that is characterised by great power interactions, the developing states, as well as the international governmental organizations and non-governmental organizations, are depicted as playing that vary in terms of influence and type. There is an increasingly popular notion of characterising globalization as an elite-based conspiracy or as something that is executed by greedy outsiders on native populations that may not have a clue and this develops the continuing belief in the possibility of systematically reversing it (Ervin and Smith, 2008, p. 82). In reality, spreading modern globalisation depicts a bottom-up demand function instead of a top-down supply imposition (Garnaut, Golley and Song, 2010). There is a tendency by people to desire connectivity regardless of its physical and virtual forms, as well as the liberty to make choices that come with it. The rules of globalization In the days to come, successful economies will be the ones that will be able to adapt and change, take advantage of their strengths to position themselves effectively and make themselves attractive so that they can invest and create an enabling environment that will make them appealing for entrepreneurs. Considering the global macroeconomic position, the successful countries will have at least one strong attribute between commodities, cash and creativity in terms of the natural and financial resources as well as human ingenuity and skill that will assist it to thrive with the assistance of practical economic policies. Specific long-term planning has the ability to work in an economy the same way an overall strategy can succeed in a company and when the objectives are clear and deliverable, there can be collaboration between the public as well as the private sector in an economy a good example being the London Olympics. However, the main focus should remain the creating of an environment that is enabling so that the private sector can be able to work without the government interfering while encouraging innovation, as well as volunteers. Fiscal policy is among the most important challenges in relation to financial markets as well as global investors since these parties can be agitated or reassured by fiscal plans. There are a number of rules that will be of great importance in the future, and a good number of emerging economies are poised to follow these rules to promote future growth. Contrary to popular myths, the most serious threat to globalization is not trade or investment that is the main source of many members livelihood, but the loss of the legitimate role of the state especially the effective control of markets. In the last two decades of the twentieth century, liberalization, privatisation as well as deregulation dominated and at the same time governments were moving away from their responsibilities that involved setting up policy frameworks in tax rates, management of economic policies, policies on interest rates, as well as exchange rates. However, the need for a framework of instruments that will govern global markets is clearly demonstrated from events such as the power cuts in California after the deregulation of energy, rail crashes in Britain after they were privatised and corporate governance disaster that followed the collapse of Enron in the United States. The main issue at the beginning of the twenty-first century was the means of guaranteeing effective public regulation. A broad range of mechanisms is available and they include strict international regulations that cover particular fields like the one covered by the WTO as well as the IMF, coming up with looser policy coordination like the G8 and OECD, as well as regional integration of national and district level policies (Nakagawa, 2011, p. 329). On the other hand, the global governance architecture demonstrates a striking imbalance in both power and enforcement capabilities of various institutions. It is, therefore, not permissible that the system of governance in the world has a binding protection for the rights of intellectual properties, rights of investors as well as environmental standards while denying enforceable protection of human rights such as key labour rights. There has been some level of progress that has been made in regard to efficient regulation that will guarantee the key labour rights. The OECD as well as the World Bank now consider the key standards and recognition by trade unions as neutral in their economic effects and also positive since they can influence the enhancement of quality governance (Trebilcock and Howse, 1999, p. 584). The OECD has made revisions to its Guidelines on Multinational Enterprises, and these portray a standard for corporate behaviour. The discourse has now extended to mechanisms of enforcement and modest progress can be made through making modifications to the rules of the WTO so that they can clarify the importance of human rights over trade rules while developing a codex of existing human rights obligations as prescribed by the UNHCR. Conclusion The instruments of economic globalization are the source of fundamental redesigns of the social, political and economic arrangements of the globe at least since the advent of the industrial revolution (Blackwell et al., 1993, p. 90). They are generating a power shift that is of huge proportions, and this moves real economic and political power from the government and communities towards the international corporations, financial institutions as well the bureaucracies that have been created. This has catastrophic significances in terms of regulation, egalitarianism and native philosophy in the regular world. Economic globalization that is corporate driven is entrenched in an economic viewpoint and now also in a process which try to integrate and combine all the economic activities in the globe within one single and integrated system. The countries that have cultures and economic traditions as different as for instance Brazil, Portugal and Kenya among others are all supposed merge their economic activities into a single framework that will be conceptual and eventually will not be economic but political. 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