Transcription of THE CAUSES OF GLOBALIZATION
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THE CAUSES OF GLOBALIZATION
COMPARATIVE POLITICAL STUDIES / August-September 2000 Garrett / CAUSES OF GLOBALIZATIONThe most important CAUSES of GLOBALIZATION differ among the three major components of interna-tional market integration: trade, multinational production, and international finance. The infor-mation technology revolution has made it very difficult for governments to control cross-bordercapital movements, even if they have political incentives to do so. Governments can still restrictthe multinationalization of production, but they have increasingly chosen to liberalize because ofthe macroeconomic benefits. Although the one-time Ricardian gains from freer trade are clear,whether trade is good for growth in the medium term is less certain. In the case of trade, theincreasing interest of exporters in opening up domestic markets has had a powerful impact on thetrend to liberalization.
tion (e.g., in terms of lowering prices). But modern economic theory is ambiguous as to whether freer trade is beneficial for economic growth, and the empirical evidence is also inconclusive. The final big picture perspective on globalization also accepts the critical role of government policy, but argues that the phenomenon is essentially a
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