Economic Globalization Market Integration

● refers to the increasing ● refers to how easily two or more

interdependence of world
economies
● a historical process, the result of
human innovation and technological
progress (-International Monetary
Fund (IMF))
● a process that creates an organic
system of the world economy.
markets can trade with each other.
TYPES OF MARKET INTEGRATION
Horizontal Market Integration
● A firm or agency gains control over
the other firms or agencies
● Example: Jollibee Food
Corporation

Two Major Driving Forces for Economic Vertical Market Integration

Globalization ● A firm performs more than one
activity in the sequence of the
The rapid growing of information marketing process, thus reducing
in all types of productive transport cost and number of
Marketization middleman.
● a restructuring process that ● Example: Agri-Business Firms
enables state enterprises to operate
as market-oriented firms Conglomeration
DIMENSIONS OF ECONOMIC ● A combination of agencies or
GLOBALIZATION activities not directly related to each
other, operates under a unified
● globalization of trade of goods and management.
services ● Example: SM group of Companies
● globalization of financial and capital owned by Henry Sy
markets
● globalization of technology and Reasons for Market Integration:
communication
● globalization of production To remove transaction costs
Provide better signals for optimal
Difference between Economic generation and consumption
Globalization from Internationalization decisions
Improve security of supply
Economic globalization
● is a functional integration between BRICS Economies
internationally dispersed activities Brazil, Russia, India, China and South
● it is a qualitative transformation Africa (BRICS)
rather than a quantitative change BRIC, without South Africa, was originally
Internationalization coined in 2003 by Goldman Sachs,
● an extension of economic which speculates that by 2050 these four
activities between internationally economies will be the most dominant.
dispersed activities.
South Africa was added to the list on April particular portion of the earth’s
13, 2011 creating "BRICS". surface and a particular segment of
the human population - Henry Bull
China and India ● an independent, sovereign
by 2050, will become the world's dominant government exercising control
suppliers of manufactured goods and over a certain spatially defined and
services, bounded area,
● State is a political concept
Brazil and Russia
will become similarly dominant as suppliers four elements (state)
of raw materials.
South Africa, Sovereignty - considered as the chief
foreign expansion opportunity i.e. promising characteristic of a state
economies in which to invest. People
Territory
NATION Government
● a group of people who see
themselves as a cohesive and NEOLIBERALISM & ECONOMIC
coherent unit SOVEREIGNTY
● Historically constituted stable
community of the people formed NEOLIBERALISM
on the basis of the common ● intensification of the influence and
language, territory, economic life and dominance of capital. It is the
psychological make up elevation of capitalism as a mode
of production
● union of masses of men bound ● a project to strengthen, restore, or,
together specially by language and in some cases, constitute anew the
customs into common civilization power of economic elites.
● a culturally homogeneous social ● emphasizes the significance of
group. (Bluntschli) contractual relations in the
● Cultural and psychological body marketplace.
● seeks to bring all human action into
STATE the domain of the market.
● a compulsory political
organization with a centralized ECONOMIC SOVEREIGNTY
government that maintains a ● the power of national governments
monopoly of the legitimate use of to make decisions independently
force within a certain territory - Max
Weber four different concepts of sovereignty
International Legal Sovereignty
● are independent political ● It refers to the acceptance of a
communities each of which given state as a member of the
possesses a government and international community
asserts sovereignty in relation to a
Westphalian Sovereignty
● It is based on the principle that one
sovereign state should not
interfere in the domestic
arrangements of another
Interdependence Sovereignty
● It is the capacity and willingness to
control flows of people, goods and
capital into and out of the country
Domestic Sovereignty
● It is the capacity of a state to
choose and implement policies
within the territory
ECONOMIC AND POLITICAL
INTEGRATION
European Integration
● the process of industrial, political,
legal, economic, social and
cultural integration of states wholly
or partially in Europe.
● an international organization
comprising 28 European countries
and governing common economic,
social, and security policies
ECONOMIC INTEGRATION
● process and a means by which a
group of countries strives to
increase their level of welfare.
● arrangement between different
regions that often includes the
reduction or elimination of trade
barriers,
● Reducing costs for both consumers
and producers and increasing trade
between the countries involved
7 STAGES OF ECONOMIC INTEGRATION
Preferential Trade Areas (PTA’s)
● happens when there’s an
agreement on reducing or
eliminating tariff (tax or duty to be
paid on a particular class of imports
or exports) barriers on selected
goods imported from other members
of countries within the geographical
region or areas. Agreement can
either be bilateral (between two
countries), or multi-lateral (several
countries).
Free Trade Areas (FTA’s)
● two or more countries in a region
agree to reduce or eliminate barriers
to trade on all goods coming from
other members.
● example: NAFTA
CUSTOM UNION
● Removal of tariff barriers between
members, together with the
acceptance of a common or
unified external tariff against
non-members
COMMON MARKET
● One major step towards economic
integration
● The extension of free trade from
just tangible goods, to include all
economic resources which means
that all barriers are eliminated to
allow the free movement of goods,
ECONOMIC UNION
● The trading bloc that has both a
common market between members,
and a common trade policy towards
non-members, although members
 are free to pursue independent
macro-economic policies.
ECONOMIC UNION
● It requires coordinated monetary
and fiscal policies as well as labor
market, regional development,
transportation and industrial policies.
In economic union the use of a
common currency and a unified
monetary policy is considered. EX.
European Union (EU).
ECONOMIC & MONETARY UNION
● a key stage towards complete
integration
● involves a single economic
market, a common trade policy, a
single currency and a common
monetary policies.
COMPLETE ECONOMIC INTEGRATION
● the final stage of economic
integration in which member states
completely forego independence
of both monetary and fiscal
policies.
● States that participate in complete
economic integration have no
control of economic policy
including economic trade rules.
● There is full monetary union
POLITICAL INTEGRATION
● refers to the integration of
components within political
systemsthe integration of political
systems with economic, social, and
other human systems;
● the political processes by which
social, economic, and political
systems become integrated.
THEORIES OF EUROPEAN
INTEGRATION
NEO-FUNCTIONALISM
● theory focuses on the supranational
institutions of the EU
● European integration is mostly seen
as an upper class-driven process-
● a theory of regional integration,
building on the work of Ernst B.
Haas, an American political scientist
and Leon Lindberg, also an
American political scientist
● Jean Monnet's approach to
European integration, which aimed
at integrating individual sectors in
hopes of achieving spill-over
effects.
● core of neo-functionalism is the
use of the concept ‘spill–over’,
situations when an initial decision by
governments to place a certain
sector under the authority of central
institutions creates pressures to
extend the authority of the
institutions into neighboring areas of
policy, such as currency exchange
rates, taxation, and wages
● This core claim meant that European
integration is self-sustaining:
‘spill-over’ triggers the economic
and political dynamics, driving
further cooperation
INTERGOVERNMENTALISM
● This theory provides a conceptual
explanation of the European
integration process.
● The main concept of the
Intergovernmentalism is
emphasizing on the role of
national states in the European
integration; in another words it
argues that "European integration is
driven by the interest and actions
of nation states"
● This theory was suggested by
Stanley Hoffmann.The theory
proposed the Logic of Diversity,
 which set limits to the degree which
the ‘spill-over’ process can limit the
freedom of action of the
governments...the logic of diversity
implies that on vital issues, losses
are not compensated by gains on
other issues'
LIBERAL INTERGOVERNMENTALISM
● A dominant political theory by
Andrew Moravsik in 1993 to
explain European integration.
● Moravcsik stated that 'state-society
relations (the relationship of state to
the domestic and transnational
social context in which they are
embedded) have a fundamental
impact on state behavior in world
politics and that the 'universal
condition of world politics is
globalization.'
● Liberal intergovernmentalist
stated that bargaining power of
member states is important in the
pursuit of integration
NEW INSTITUTIONALISM
● This theory emphasized the
importance of institutions in the
process of European integration. Its
three key strands are: rational
choice, sociological and
historical.
MULTI-LEVEL GOVERNANCE (MLG)
● This is a new theory of European
integration. Writers Liesbet
Hooghe and Gary Marks defined
MLG as dispersion of authority
across multiple levels of political
governance.
● They stated that over the last fifty
years, authority and sovereignty has
moved away from national
governments in Europe, not just to
the supranational level with the EU,
but also to subnational levels such
as regional assemblies and local
authorities.
TRANSNATIONAL ACTIVISM IN STATES
TRANSNATIONAL ACTIVISM
● can be defined as the mobilization
of collective claims by actors
located in more than one country
● It also refers to the the
coordinated international
campaigns on the part of networks
of activists against international
actors, other states, or international
institutions
SOCIAL MOVEMENT
● a type of group action.
● organizational structures and
strategies that may empower
oppressed populations to mount
effective challenges and resist the
more powerful and advantaged
elites.
● They are large, sometimes
informal, groupings of individuals
or organizations which focus on
specific political or social issues.
They carry out, resist, or undo a
social change. They provide a
way of social change from the
bottom within nations
GLOBAL JUSTICE MOVEMENT
● describes the loose collection of
individuals and groups often referred
to as a “movement of
movements”, who advocate fair
trade rules and are negative to
current institutions of global
economics such as the World Trade
Organization
● The movement is often labeled the
anti-globalization movement by
the main stream media.
NEW TRANSNATIONAL ACTIVISM
● multifaceted as internationalism.
● Although globalization and global
neo-liberalism are frames around
which many activists mobilize, the
protests and organizations are not
the product of a global imaginary but
of domestically rooted activists who
are the connective tissue of the
global and the local, working as
activators, brokers and advocates
for claims both domestic and
international
GLOBAL GOVERNANCE OR WORLD
GOVERNANCE
● a product of neo-liberal paradigm
shifts in international political and
economic relations
● It is a movement towards political
integration of transnational actors
aimed at negotiating responses to
problems that affect more than
one state.
● It tends to involve
institutionalization.
● understood as the sum of laws,
norms, policies, and institutions
● viewed as the sum of governance
processes operating in the absence
of world government.
● nations
INSTITUTIONS OF GLOBAL
GOVERNANCE
● United Nations
● International Criminal Court
● The World Bank
The two types of International
Organizations
universal membership
limited membership.
● Examples of IOs with universal
membership include: UN, Bretton
Woods institutions and World Trade
Organization (WTO).
● Limited membership includes
European Union (EU) and the North
Atlantic Treaty Organization (NATO)
ROLES AND FUNCTIONS OF THE
UNITED NATIONS
●
● promote international co-operation
and to create and maintain
international order. It is the largest,
most familiar, most internationally
represented and most powerful
intergovernmental organization in
the world.
Four Main Purposes of the UN Charter
● a written grant by a country's
legislative or sovereign power, by
which an institution such as a
company, college, or city is created
and its rights and privileges defined
1. Maintaining worldwide peace and
security
2. Developing relations among
nations
3. Fostering cooperation between
in order to solve
economic, social, cultural, or
humanitarian international
problems
4. Providing a forum for bringing
countries together to meet the
UN's purposes and goals
five stages or main gaps meet by UN in
the 21st century.
These are knowledge, norms, policy,
institutions and compliance. A critical
hole in any of the five stages can cause growth of a multi-layered system of
efforts at problem solving to collapse. governance.

GLOBALIZATION’S IMPACT ON STATE The following are guaranteed by

nation-State: internal and external
Factors which lead to the increase and security, law established, national
acceleration of movement of people, welfare systems funding, structures
information, commodities and capital: provided for popular representation,
public accountability instituted, and
framework for economic and social
1. Lifting of trade barriers activities built
2. Liberalization of world capital
markets The following can be guaranteed only by
3. Swift technological progress the States through independent courts:
(information technology,
transportation and Respect of human rights and
communication) justice
Promote the national welfare
Problems afflicting the world today ● Protect the general
which are increasingly transnational in
nature -- those that cannot be solved at
the national level or State to State
negotiations:

Poverty
Environmental pollution
Economic crisis
Organized crime and terrorism

Effects of greater economic and social

interdependence to national
decision-making processes:

● It calls for a transfer of decisions to

the international level.
● It requires many decisions to be
transferred to local levels of
government due to an increase in
the demand for participation.

Decision making processes in

globalization is complex as it takes place
in various levels such as sub-national,
national, and global which lead to the