Research
Essay:
Globalization and
Democratization
Submitted
To
Dr.
Ahmad Ijaz Malik
Subject
New
International Economic Order
Submitted
by
Imdad
Hussain MPhil 2nd Semester
School of Politics and International Relations
Quaid-e-Azam University, Islamabad
Research Essay
Globalization and Democratization
Abstract
This article sheds
light on the relationship between the process of globalization and
democratization. while explaining the link between these two phenomena globalization
has been briefly explained and agents of globalization have been explored to
construct a deep understudying. In addition, democratization has been
scrutinized to explore the relationship between the two. The first part of the
paper explains how globalization is threatening the prospects of
democratization. The second part accounts for how globalization provides
fertile grounds for its flourishment. The essay ends by driving the conclusion
that globalization has been a bane and boon for democratization.
Keywords: Globalization, Democratization, Sovereignty,
Multilateralism, MNCs, NGOs, Populism, and Protectionism
1.
Introduction
There exists a connection between the process of
globalization and democratization is no denying fact. However, there are
diverse opinions regarding whether they go hand in hand or they both cut each
other in their transition. On the one hand, some see globalization as a good
thing that helps the flourishment of democratic ideals. On the other hand, globalization
has been attacked by critics of the free market for perpetuating inequality in the
market rather than reducing it. Hence, they are skeptical in believing the
process is breeding fertile grounds for democratization. The approach that
believes globalization threatens the prospects of democratization rely on
grounds such as it undermines the decision power of national governments. They
believe that the supranational and subnational actors assume greater power in the decision-making process and challenge the autonomy of the state.[1]
Governments are dictated by these organizations while formulating economic,
social, and political policies. Governments hence become more concerned about
attracting foreign investment rather than serving the needs of their citizens.
Such an approach is in contradiction with the ideals of democratization and the
latter thus becomes undermined. Similarly, the Integration of national economies
through the imposition of Structural Adjustment Programs (SAPS) and free trade
regimes on less advanced countries leads to economic inequality. The concept
is supported and promoted by international institutions such as International
Monetary Fund (IMF), World Bank (WB), and World Trade Organizations (WTO) to
ensure the liberalization of trade. Simultaneously, Non-Governmental Organizations
(NGOs) and other non-state groups challenge the autonomy of states from the
below.[2]
These groups are increasingly involved in providing welfare services cut down
by the states owing to the imposition of SAPs and financial restrictions imposed by global financial institutions. On the other hand, there is a scholarship
that believes in globalization catalyzing the process of democratization. They
put forth several points to substantiate their claims. The proponents of this
belief underscore that global redistribution of power has given birth to new
political, economic, and cultural actors and processes that are transnational in
nature.[3]
There is a body of literature that propounds that the spread of the free
market, liberalization of trade, increases in FDI, and privatization of
production offer new opportunities for encouraging political liberalization.[4]
Privatization favors individuals by placing more economic power in the hands of
the latter which can be later translated into political power. In the long run,
such economic empowerment and economic growth contribute to sustaining democratic
ideals. In addition, the deep connection beyond the borders and free flow of
information helps to learn of new ideas and concepts of accountability and
transparency. Such norms are consistent with democratization and inconsistent
with the authoritarian outlook of the states. As consequence, authoritarian regimes
tend to liberalize political values in order to incorporate economic
liberalization and to make their positive image in society, thereby,
consolidating their own position. In this way, regimes may end up in a democracy
by default. Similarly, the era of globalization has spurred the decentralization
of power at regional and international levels. Since then, the world has
witnessed growth in democratic regimes. Globalization has paved the way for the organization of civil societies across the world that are deemed as beneficial
for the growth of democratic values. Civil society organizations, including
NGOs, contribute to political pluralism by giving voice to a myriad of
different interests. They provide a counterbalance to the government, thereby
preventing state monopoly of power and encouraging transparency and
accountability.[5]
They are considered as important agents of civil participation and play an
active role in bringing empowerment to the doorstep of citizens. NGOs and Civil
Societies have been champions of Human Rights, Civil Liberties, women's Rights, and
poverty eradication. These organizations incorporate civic sense and democratic
values in the citizens. Such a plan of action is a prerequisite for the consolidation
of democratic norms in societies. The above literature reveals divergent
opinions on the linkage between globalization and democratization. One camp
believes that both globalization and democratization go hand in hand. While the
other urges that globalization has threatened the prospects of democratization.
However, the divergence between the opinions can be minimized by taming the
process of globalization to make it consistent with democratic norms. For
that reason, all the drivers of globalization should be channeled in such a way
that would, in turn, further the values of democracy instead of fueling
inequalities and imbalances in the patterns of relations between the state and
citizens.
2.
Globalization
The concept of globalization is inextricably linked with the
process of transformation touching every aspect of economic, political, and
social development around the globe. It
can be viewed as a process through which the world is increasingly transformed into
a global village. Therefore, no single definition can explain the concept
thoroughly. Scholars like Anthony Gidden, a British sociologist, conceive
globalization as the intensification of worldwide social relations which link
distant localities in such a way that local happenings are shaped by events
occurring many miles away and vice versa.[6]
Similarly, Robert Cox, an American political scientist, characterizes it as a
trend that includes the internationalization of labor, states, and new migratory
movements from south to North.[7]
However, various scholars have tried to define the term on their own to explain
the term in its entirety. A process of increasing interconnectedness between
societies such that events in one part of the world increasingly have effects
on people and societies far away.[8]
Another scholar defines globalization as, “globalization is the product of many
forces, some of which are political (no major was since 1945), some of which
are technological (faster and cheaper transportation and communication), and
some of which are economic (nature firms seeking growth outside their national
boundaries”.[9]
From the above definitions, it can be concluded that globalization has its
impacts on social, economic, and political dimensions. Globalization is driven
by certain forces viz. Multinational Corporations (MNCs),
support of the capitalist world, and rapid development in information technology.
The process is characterized by certain features mentioned below.
1.
Modernization
2.
Internationalization
of national economies
3.
Deregulation
of tariff barriers
4.
Liberalization
5.
Privatization
6.
Global
movement of capital, ideas, technology, and political and social values.
Most importantly, globalization has signified the concept of
deterritorialization, and in doing this geography is becoming less relevant
to people and their interactions. The features of globalization have largely
impacted national sovereignty, domestic economies, democracy, and interaction
between states.
Democratization
Ideally speaking, democracy empowers people and gives them the power to shape their destinies. Hence, it is a process through which a political
regime becomes democratic.[10]
Democratization is, however, difficult to define because there exists a
disagreement, at large, about how to understand democracy. However, most of scholars agree on various variables such as freedom of speech, rule of law,
free and fair election, transparency, and protection of fundamental rights.
Democracy requires certain conditions for its consolidation. Two basic norms
stand out as fundamental to a functioning democracy anywhere; mutual
understanding and institutional forbearance.[11]
The idea is that strong institutions are responsible for the decentralization of
power. Strong institutions always favor good governance and ensure the devolution
of power thus serving the spirit of democracy. Hence, a group of scholars
establishes that globalization fortifies these norms of democracy and thus
prospects of democratization are always high. While the other school of thought
that believes democratization is at odds with globalization cites reasons such
as inequality, overriding of authority by MNCs and NGOs, and dictation in the decision-making process by global financial institutions. Here we need to
understand that the world has gone through several changes and we need to examine their existence in light of new developments. Having said that we can not
deem democracy as an ideal government and suitable for interests of all sorts.
These multilateral institutions such as WHO, IMF, and UN have helped different democracies
to establish strong institutions catering to the economic needs of citizens.
Milner and Mukherji assert that the past 30 years have been a
period of intense global change. Many aspects of international relations have
experienced rapid transformation, but two central trends stand out.
1.
Firstly, the third wave of democratization, which started slowly in the late 1970s with the
transitions in Spain and Portugal, extended further to many Latin American
countries in the 1980s, and then gathered momentum in the 1990s, engulfing
Eastern Europe, the former Soviet Union, and parts of Africa and Asia.
Democracy has thus become a global trend, and countries all over the world have
become more democratic.[12]
2.
The
second central trend has been characterized by the increasingly intense
interchange of people, goods, information, and money across national borders.
This phenomenon is commonly referred to as economic globalization, and a number
of commentators have christened the contemporary period as “the era of economic
globalization.[13]
3.
Drivers of Globalization
Globalization is a process that is catalyzed by certain
factors. John Micklethwait and Adrian
Wooldridge in their book, Future Perfect; The Promise and Challenge of
Globalization, have termed these factors as “The Three Engines of
Globalization”. These include Information Technology, Capital Market, and
Management.
i.
Information Technology
The increasing number of sites on the
internet has made it easier to obtain information and conduct economic activities.
Various data or information is available from around the world. One example is
in the U.S. invasion of Iraq. The promotion of industries, goods, and services is
also very complete on the internet. So, buying something in one country can be
done through the internet. This has made the world seem smaller, a "world
village". Each person is likened to being everywhere without having to go
everywhere. This condition is called, by Micklethwait and Wooldridge, "The Death of Distance".[14]
ii.
Capital Market
The second engine of globalization is the capital market. If we listen and pay attention at certain hours on every TV and
radio station, they talk about the economic exchange, stock prices, and other
related trade, then we can see how speed of the capital movement as well as the
increasing number of capital with a very fatal consequence. By using one touch
of a button, it is able to move trillions of dollars from one place to another.
Seeing the experience of developing countries, the big influence of the world
capital market is very large and it is not only on the economy but also on the
political system and government, for instance, South Korea, Indonesia, and
others. Therefore, it is very natural to have the pro and contrast of the
desire to escape from the IMF. According to George Soros that the money markets
lately have been acting like a big ball that hit one country to another, acting
like a pendulum.[15]
iii.
Management
The third engine of globalization is
management. Management method which continues to grow will not only able to
raise the company or organization but also able to make the organization
survive the dangers of the crisis. The more progress of the company, the more
tendency to make an investment as well as to open company branches in
various places of region or country while the permanent headquarter company is
still in the city or country of origin of the company. The current management
method is very concerned with how to operate the business units as efficiently as
possible.[16]
4.
How Globalization Threatens the prospects of Democracy?
There is a wide literature that believes that globalization
and democracy have always been at odds. The former wipes out the ideals of
democracy thereby weakening the foundation of democratic regimes. They cite
several reasons to substantiate their claims. A few of them have been discussed
below.
I.
Globalization undermining the state’s autonomy in decision-making
The
process of decision-making is the sole responsibility of the government which is
elected through a ballot by the citizens of a country. Globalization empowers
non-state actors that challenge the legitimate authority of the state.
Consequently, the powerful non-state actors obliged the government to formulate
economic and social policies that attract foreign investment. In lieu of such
preferences, the citizens of the country are ignored. The policy-making instead
of aiming at attracting foreign investment should cater to the needs of the
citizens. Importantly, in a bid to
attract foreign investment governments cut welfare services that are the prime
responsibility of the state. Under social contact, citizens have surrendered
to the state in exchange for their well-being. Similarly, foreign investment can
make a negative impact by squeezing the domestic industry and resultantly,
leaving the people associated with the domestic industry jobless. Foreign direct investments (FDI)
represent such a form of investment in which foreign investor keeps the
ownership right, and provides control and management of the firm in which
they invested the funds, in order to achieve long-term interests.[17]
Thus the investors make the governments toothless. The dwindling power of the state
over such entities is tantamount to the loss of autonomy by the domestic
government.
II.
Globalization breeding inequality is anti-thesis to norms of
democratization
Democracy
believes in the concept of equality. It promotes the notion of one man one
vote. The IMF admitted in 2007 that inequality levels may have increased by the
introduction of new technology and the investment of foreign capital in
developing countries.[18]
The menace of inequality is not confined to only developing countries but also
the developed countries distrust globalization. They fear that it often allows
employers to move jobs away to cheaper places in search of maximum profits. In
France, for instance, globalization and delocalization have become derogatory
remarks for free market policies. And a survey shows that only 22% of French
people thought globalization was a good thing for their country.[19]
Globalization was promoted with a belief in economic disparities around the
world. On the contrary, globalization has widened the gap between the rich and the
powerful. For the said reason, Marxist believe that it is a western lead
capitalistic phenomenon that basically furthers the development of global
capitalism rather than making the world more alike.[20]
The theme of democratization, on the other hand, promotes economic equality
and emphasizes on trickle-down effect.
According
to Amrita sen, globalization has been for long promoting the interest of elites
at the expense of poor labor. Resultantly, the rich are becoming richer and
the poor are getting poorer has become a fact. The dividends of globalization
as result are distributed only among the upper strata of society responsible
for breeding poverty. The unjust policies are indeed against the spirit of
democratization.
III.
NGOs, MNCs, and Global institutions challenging state sovereignty
Since
the advent of globalization, non-state actors such as MNCs, financial
institutions, and NGOs have assumed greater importance in global affairs. They
exert their influence in the formal decision-making of states thereby challenging
the state’s sovereignty. Sovereignty is the only attribute that distinguishes
the state from informal organizations. A state with no sovereignty is not
deemed as a state according to international law. state autonomy is challenged
from below by NGOs and other non-state groups. These actors have gradually
become involved in providing the welfare services that many governments are no
longer able to provide because of the fiscal restraint imposed by IMF and WB
SAPs.[21]
These NGOs have been encouraged by the aid provided by the donors of the Global
North. In addition, NGOs have been seen as a substitute for the state for it
provides the services previously provided by the states. NGOs are also given
grants by multilateral and bilateral donors in order to contribute to ‘good
governance’ through civil society strengthening.[22]
Although, good governance is a norm that comes under the responsibility of the
state. Democracy advocates good governance through public service delivery and
by ensuring well being of the citizens. Similarly, the critics of globalization
in first place question the composition of global institutions. Their
composition is undemocratic as they fail to include the smaller nation at the
strategic helm. The US has a monopoly over the Bretton Wood system. The strong
have the power to make the rules and the authority to implement the rules. In
contrast, the weak ones can neither set nor invoke the rules.[23]
The Bretton Wood system through the SAPs forced the government to cut down welfare
services, and increase taxes. The accountability of governments to their people,
who elect them or whom they represent, is eroded. In an ideal world, such
accountability to citizens alone is a priority.[24]
This is a blatant violation of the constitutional sovereignty granted to states.
IV.
Globalization has spurred populist politics and is a threat to democracy
In the recent
epoch of globalization, it has been witnessed that economic liberalization
breeds political polarization and populism, particularly in the west. Populist politics has surged as a result of widespread inequalities among the
communities and the marginalization of segments of societies. Populist parties are on the rise in western democracies.
Several studies provide some support for the view that economic globalization
is one of the most important causes.[25]
As a matter of fact, the principles of free trade are the same for nations as
they are for individuals. When the systems work under a common set of rules and
standards the dividends are uniformly distributed among the states, similarly,
when state institutions operate uniformly benefits reach all and sundry, and
contentment of the masses can be seen at all levels. International economic
integration seems to have produced domestic disintegration in many countries,
deepening the divide between the winners and losers of exposure to global
competition.[26]
The breeding contentment acts as a glue to keep people together. In case of
discrimination and marginalization of minorities or particular segments of
society, discontentment at large can be witnessed. But most of the benefits of
this explosion in activity have gone to the developing world and, in the west,
the already rich, highly educated, and talented.[27]
5.
How globalization is Increasing the Opportunities for Democratization?
The proponents of globalization do
not outrightly ignore the negative repercussions of globalization. In fact,
they endorse certain inequalities and insecurities associated with the
phenomenon of globalization. However, they differ in their explanation from
the anti-globalists and put forward a series of justifications to sustain their
claims.
I.
Global redistribution of power strengthens democratization
The
world is witnessing new political, economic, and cultural actors across the
world owing to the reordering of power relations among different transnational
actors. These actors operate in an environment that is transnational. There is
a body of literature that argues that the spread of the free market,
liberalization of trade, increases in FDI, and privatization of production that
offer new opportunities for encouraging political liberalization.[28]
Indeed, the growth of the private sector requires the free flow of information,
transparency in financial institutions, and an end to corruption and rule of law.
Similarly, privatization emphasizes on placing economic resources in individual
hands. States are constrained in making interfering in individual matters and
market trends are set by individuals. This ensures greater economic
empowerment that can be translated into political power. In this way, the
economic development spurred by economic liberalization helps sustain
democratic ideals such as freedom of association and movement. In addition, the
links with the ‘outside world’ through trade and cross-border investment help
to introduce ideas about transparency, accountability, and other good business
practices that are contrary to the closed, monopolistic power of state-led
economies.[29]
Furthermore, in search of economic reforms, the authoritarian states engage in
economic liberalization in order to consolidate their position. As economic links among states expand, authoritarian countries
experience an increase in pressure from transnational companies for political
liberalization. These authoritarian states, as a result of globalization, have
fewer incentives to cling to power or proceed with their radical
policies. [30]
Thereby, such regimes inadvertently end up in democratization.
II.
Decentralization of Power from state to people is in line with democratic
norms
Indeed,
during the era of globalization, the world has witnessed rapid decentralization
which is central to the growth of democratic ideals. The phenomenon has
championed the devolution of power from the center to local governments to bring
governance to the doorstep of its citizens. Civil society and NGOs are deemed as vehicles
of democratization. The globalized world advocates for the establishment of civil
societies and NGOs. They are important vehicles for citizen participation in
public affairs and empower individuals in exercising their civil and political
rights.[31]
III.
Globalization also contributes to democratization through the spread of
new information and communication technologies (ICTs)
Advancement
in information technology and new modes of communication has turned the world
into a global village. The reduction in information and traveling costs mean
that people have access to a lot more information not only from their
government but from all over the world. This means democracies can now promote
their values and ideals to autocratic countries a lot more freely, as
autocracies have diminishing control over information. [32]
These inventions act strongly to strengthen regional, national and local
entities by bringing them together. The strong affinities between people have
blurred the distinction between communities and nations. This sort of new
pattern has led to a universal culture where democracy and democratic
institutions are advocated. As a result, global movements have given birth
to resolving global problems. Daniel Bell, in this regard, states
that the national government is too small to respond to the big question, such as
the influence of global economic competition or the destruction of the world’s
environment, reduction of carbon emissions, and global refugee crisis.[33]
This sort of interdependence has given birth to deep interaction which is
being used by people to resolve many global problems. Many contemporary problems, such as ecological degradation, crime, the regulation of capital, and the removal of national
boundaries. In addition, the global reach of power relations means that issues
such as women’s rights, labor rights, and human rights have a global dimension.[34]
This has forced local governments to cooperate with each other regarding global
issues or through multilateral regimes to find out solutions to collective
problems. The notion of collectivism is a central concept of democracy and globalization
encourages collectivism.
IV.
Economic, political and cultural integration fuels coexistence is the ideal
of democracy
Coexistence
has been a hallmark of democracy in all civilized societies. It may come
through the economic, social, and political integration of societies. Politics of
exclusion is harmful to a peaceful social order and all sort of exclusion
breeds alienation of all kinds. The social manifestations of exclusion can be
powerful. At the same time, economic exclusion accentuates social exclusion,
while social exclusion accentuates political exclusion. Similarly, cultural
exclusion such as that of immigrant groups, minority communities or ethnic
groups interacts with economic exclusion from the market and political
exclusion from democracy.[35]
Democratic principles are inconsistent with policies of exclusion. In fact, new
markets and greater wealth promote greater cultural and social integration by
eliminating the national borders. A borderless world in terms of economics,
social and political relations leads to coexistence and discourages the
ethnocentrism that is largely responsible for conflicts. Democracies survive in
a peaceful and stable conditions that can only be achieved through peaceful
coexistence. Globalization through multilateral settings strives for peace and
democracy. After World War II, the United States helped build a global economic
order governed by mutually accepted rules and overseen by multilateral
institutions. The idea was to create a better world with countries
seeking to cooperate with one another to promote prosperity and peace.[36]
6.
Conclusion
Two approaches were underscored while examining
the link between globalization and democratization. The first approach
perceives globalization as a threat to the process of democratization. The
first approach is more similar to the realist perspective that considers the state
as only important actor in the global affairs. The state is above all other actors
for the state is empowered through democracy to act on behalf of its citizens. The nation-state is an entity that caters to the need of a group of people living
in a defined territory with the same values. Essentially, globalization threatens
national autonomy, patriotism and the identity. Globalization promotes values
that challenge the predominance of the state by intervening in the affairs of the
state through various regimes and financial institutions. Globalization is
promoting such a set of new patterns where governments are surrendering to
transnational groups in search of foreign direct investments. States have been
forced to endorse that economic openness is need of the hour and without a free
market and integration of economies states cannot thrive. In doing so states
ignore their own citizens to attract foreign direct investment. Small companies
who are unable to compete with multi nationals on an international scale lose
from more economic openness. The results of this loss cause a weakening of democracy. On the other hand, a group of scholars contends that
globalization through its various dimensions and features paves the way for the growth of democracies. They put forward cogent reasons to believe in their
assumptions of democracy and globalization go hand in hand. They believe that
globalization has promoted economic development. This has, in turn, resulted in the economic empowerment of individuals and these individuals have translated their
economic power into political power. This trend is consistent with the
democratic ideals. Similarly, the integration of economies and cultures has led to
peace and stability in various regions. Peace and stability are essential
conditions for sustaining democratic ideals. In addition, the advancement in
information technology and communication has facilitated the process of
democracy by brining people close together. The inflow of ideas and
unrestricted traveling has broken the shackles of authoritarianism and
multinational regimes have been supporting the voices of plurality across the
world. All these abovementioned factors are drivers of democratization. Hence,
it can be said that globalization has posed a significant challenge to the
sovereignty of nation-states and on the other hand, it has expanded democracy.
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