Has economic globalisation decreased inequality throughout the world?

Running head: INTERNATIONAL RELATIONS
Has economic globalisation decreased inequality throughout the world?
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INTERNATIONAL RELATIONS
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Introduction
The subject of economic globalization and inequality is a debated one. Globalization
refers to the process of integration and interaction among the nations, people, governments
and all types of political and economic activities, such as, businesses, international trade,
cross border investment supported by advanced information technology and labor migration
between nations (Steger, 2017). The process of globalization has impacts on the economic
development, environment, culture, political systems and on well being of people across the
societies of the world. Thus, economic development and prosperity is one of the major
outcomes of the globalization. According to World Economic Outlook by IMF (2007),
globalization has led to the integration of the world economy through the cross border
interactions of trade and finance to an unprecedented level. In the modern world, dominated
by advanced technology, the wave of globalization has a far-reaching impact on the economic
wellbeing of the people across all the regions and among all the income groups. Although
globalization has created millions of opportunities for employment spanning all over the
world, as per many experts, globalization has resulted in economic inequality among the
nations. It has been observed that the gap between the poorest and the richest countries is
widening and thus, economic inequality among many countries is increasing in reality instead
of decreasing (Milanovic, 2016). This essay will present a discussion on the impact of
economic globalization on the inequality among the countries and the relationship between
globalization and inequality will be explained in the light of Marxism, an international
relations theory.
Discussion
The wave of globalization started with technological revolution and based on this, the
governmental policies developed to open up the economies locally as well as globally. Post

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World War II, especially, in the past 2 decades, majority of the countries have developed and
implemented free-market economic system, which was meant to increase their own
production potential with the available resources and to create myriad opportunities for
foreign investment and international trade (Rodrik, 2018). These policies were also meant to
reduce the barriers to trade, commerce and all other type economic transactions or exchanges
and to establish international agreements for promoting the trade in goods, services and also
in investments. Thus, economic globalization had opened up the opportunities to take
advantage of the advanced technology, and market potentials in the foreign economies, and
due to this, many companies have established factories, production and marketing units in
foreign countries and collaborated with international partners. The international industrial as
well as financial business structure are thus a significant outcome of globalization (Baylis,
Owens & Smith, 2017). Technology is also another important driver of the globalization
process. The growth and development of information technology has a very dramatic impact
on the economic aspects. It has facilitated the invention and wide usage of various new tools
to identify and pursue innumerable economic prospects.
The points of views on the distributional impacts of globalization is often polarized
between two opposite directions. On one hand, some experts argue that globalization has
resulted in a mounting tide of income across the world, which has boosted every economic
aspects. Thus, it is said that even the low-income countries came out as winners in absolute
terms from the wave of globalization (Hassoun & Tucker Sechrest, 2015). The Kuznets
hypothesis of development economics provides some parallel explanations for this optimistic
view. The Kuznets hypothesis says that in the initial phase of industrial development,
inequality might increase, but eventually it would decline when the industrial transition of the
country was completed (Blanco & Ram, 2019). On the other hand, the opposing school of
thought argue that overall income level and economic development may be achieved due to