Globalization Literature Review

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LITERATURE REVIEW AND THEORETICAL FRAMEWORK This chapter begins by providing a definition and understanding of the phenomena under study. The theoretical framework which differs considerable from all other reviewed works is then considered before proceeding to examine existing literature on the extent to which globalization impacts economic growth. 2.1 Defining Globalization and its Dimensions The concept of globalization has deep historical roots. The notion of an initial global economy is ascribed to the seventeenth century while the beginning of the modern global era is attributed to the nineteenth century. However, In spite of the ample usage and rigorous debate on the concept, phenomenon or term known simply as globalization, there…show more content…
It promotes the integration of world economies by the implementation of policies geared towards economic liberalization, free trade, deregulation, privatization and fiscal austerity in order to achieve economic efficiency and growth (Saad-Filho, 2004). According to Litonjua (2008) neoliberalism promotes globalization through the deregulation of the global market society. The ideology of neoliberalism can be traced to the different writings of Fredrich von Hayek, James Buchanan and Milton Friedman also it can be linked to the Chicago and Austrian school of thoughts. The economic crises experienced between 1960 and 1970 ousted the Keynesian and liberal economic ideology, with neoliberal economic policies taking a definitive form as promoted by Margaret Thatcher and Ronald Regan in the 70’s and 80’s . The transmission of neoliberal ideas and policies across the world ensued with the persuasion or coercion of numerous countries by powerful nations such as the United States of America, the promotion of the structural adjustment program by the International Monetary Fund and the promotion of development policies as laid down by the Washington Consensus (Kotz (2002) and Litonjua (2008)). The development policies as laid down by the Washington Consensus for developing countries were arrived at during a meeting involving the…show more content…
According to Alfredo (2004) a major limitation of neoliberalism identified by critics is the kind of growth it stimulates. The growth stimulated is believed to create inequalities among countries in the creation of wealth and distribution of power. Trade liberalization and financial interdependence has been identified by the United Nations Development Programme as a driver of the upward trend in income inequality within and between countries. The neoliberal promise of economic efficiency, growth, technical progress and justice according to Walden Bello has failed to address the societal problems of poverty, income inequality, unemployment, uneven distribution of the means of production and wealth accumulation. Development therefore appears more skewed towards the developed than developing countries. Also, national economies are not encouraged to be self-reliant and key economic decision are left in the hands of market forces rather than a democratic decision making process. Again in a bid to drive efficiency the privatization of state owned establishments that provide public services is now the order of the
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