SOCIAL ECONOMIC EFFECTS OF GLOBALISATION

Declaration

I, , the undersigned, declare that this Project work titled, “Social Economic Effects of globalisation” is
based on my own research work that was carried out during the course of my study, under the guidance
and supervision of my faculty advisor.

I affirm that the statements made and the conclusions drawn are the outcome of the said research work. I
further declare that, to the best of my knowledge and belief, proper references have been given and it does
not contain any part of any work that has been submitted for the award of any other degree in this
university or any other university.

Certificate

1
This is to certify that the Project tilted, “Social Economic Effects of globalisation”, submitted by Mr. as a

part of his internal assessment in B.A. LL. B. (Hons) Course is to the best of my knowledge his own

research work.

The research has been conducted under my supervision and guidance and may be accepted for

consideration.

Acknowledgements

I, , would like to take up this opportunity to thank all those who have stood by me throughout the
duration of this project and helped me in completing it.

2
Foremost my teacher and mentor. I thank him for his faith in me to provide me with such a topic
of research. Her constant guidance at every step and keen attention to detail have been
elementary in the completion of this project.

The college administration and staff had no less a part in this job. The value of their support
cannot be expressed in mere words.

Finally, I would like to thank God for his benevolence and grace in enabling me to finish this
task.

I express my heartfelt gratitude to everyone involved,

Table of Contents

S.no. Topic Page no.

1. Declaration 2
2. Certificate 3
3. Acknowledgements 4
4. Chapter 1: Introduction 6
 Objectives of the study
 Nature and sources of data
 Scope and Limitation of the study
 Methodology and Rationale of the study
 Mode of Citation
5. Chapter 2: History of globalization 9
6. Chapter 3: Types of globalization 10
7. Chapter 4: Globalisation in India 12

3
 8. Chapter 5: Factors aiding the globalization 14
9. Chapter 6: Characteristics of globalization 16
10. Chapter 7: Impacts of globalization 17
11. Conclusion 21
12. References 22

Chapter 1
INTRODUCTION

The definition of the word globalization from an economic point of view according to the
Committee for Development Policy which is a subsidiary body of the United Nations as:
“(…) the increasing interdependence of world economies as a result of the growing scale of
cross-border trade of commodities and services, the flow of international capital and the wide
and rapid spread of technologies. It reflects the continuing expansion and mutual integration of
market frontiers (…) and the rapid growing significance of information in all types of productive
activities and marketization are the two major driving forces for economic globalization.”1

Globalisation is a major factor that has integrated and mobilized the cultural values of the
individuals. In today's era of fast paced progression many countries have transformed due to the
process of globalization, liberalization and privatisation. Some countries having a particular
economy have transitioned to a different one due to inter connectedness and interaction. It has
been established in such a manner that the happening of one country can be influenced by
another that is happening miles away. It aims at benefitting the economies of the world.

1
https://youmatter.world/en/definition/definitions-globalization-definition-benefits-effects-examples/

4
Although it has created a borderless world and has been benefitting to the economy and society,
it still has been subject to numerous criticisms as well. 

Etymological meaning

The word globalization has been derived from the word globalize which refers to the
international network of economic systems.  This word has been used in the economic sense. 

Concept

Globalization refers to the integration of economies. This concept is complex and multi faceted.
With the development of science and technology, the world has turned into a global Village. The
integration of world economies has led to integration of values, cultures, knowledge and ideas.

Background

Countries of mixed economy especially the ones with the socialist economics system strived to
achieve the economic growth. It was in 1980s when the public sectors were in the black because
of several reasons such as corruption, political interference, etc. Monopoly results in an efficient
working of the economy as there is lack of competition. This has resulted in massive financial
loss to the public sectors causing inflation in the economy. 

In India, to resolve this condition, P. V. Narsingh Rao government adopted the new economic
policy in 1991 of privatisation and liberalisation. In order to fulfill the need of efficient
technology and foreign capital there was exchange of managerial skill, capital, technical
knowledge from one nation to another cutting across all territorial borders. 

5
Globalisation is condemned to be a negative concept as it has resulted in eradication of
protective economic policies. There were trade barriers earlier. 
With the positive view, globalisation has encourage trees world straight and has advocated the
process of integration of all the domestic economies of the world.

1.1 OBJECTIVES OF THE STUDY

Set in above prospective the major aim of the project is:

1. To understand the meaning of globalisation

2. To understand the types and characteristics of globalisation
3. To know the factors aiding the process
4. To understand the social and economic impacts of globalisation

1.2 NATURE AND SOURCES OF DATA

This project work is descriptive analytical in approach and the source of collection of data is
secondary data. This secondary data has been obtained from published sources such as web
sources, articles and other references as guided by the faculty of Sociology were primarily
helpful and of utmost importance in the successful completion of the project.

1.3 SCOPE AND LIMITATION OF THE STUDY

The Scope of this Project is limited to the study of globalisation as general concept and to some
extent reference has also made to the Indian context. The time expanse of the research is wide
taking into account its history, evolution and impact.

1.4 METHODOLOGY AND RATIONALE OF THE STUDY

6
The study is fairly concise and doctrinal in nature. It delves into the concepts as outlined in the topic
header so as to formulate an understanding of the important aspects of research on the same.

1.5 MODE OF CITATION

In this project many web sources, website etc. have been used. 20th bluebook citation has
been followed for footnotes.

Chapter 2
HISTORY OF GLOBALISATION

Although the concept of globalisation is widely considered a relatively new phenomenon,

however it has been happening for many years.

There are many instances to prove that globalization is being practiced even before its term came
into usage. They are listed as follows:

 The Roman Empire, spread its economic and governing systems through significant
portions of the ancient world for centuries.

 Similarly, even the merchants, goods and travelers travelled through the trade routes of
the Silk Road from China through Central Asia and the Middle East to Europe and
represented globalization.

7
  European countries had great investments overseas in the years before World War I that
made some economists to label the pre war period as an earlier golden age of
globalization.

The term globalization as it is used today has come to gain the importance since the 1980s,
reflecting several technological advancements and innovation that led to international
transactions.

Globalization has evolved and flowed throughout history, with periods of expansion, as well as
retrenchment and the 21st century has seen both. Overall, however, the early 21st century has
seen a dramatic increase in the pace of globalisation, which is driven primarily by the fast paced
advances in technology and communications.

Chapter 3
TYPES OF GLOBALISATION

There has been a huge flow of capital, investments, goods and services because of which it is
believed that globalization is seen only in economic and financial terms. However there are
various types of globalization that prevails:

1. Economic globalization. 

This focuses on the development of different trade systems and integration of

international financial markets and multinational corporations as well. Various private
enterprises are now making huge profits and are thus boosting the economies of
respective countries.

2. Political globalization. 

8
 It deals mostly with policies made in order to facilitate international trade and commerce.
It also deals with the institutions that incorporate or deal these policies, which include
national governments, international institutions, such as the International Monetary Fund
and the World Trade Organization.

3. Cultural globalization. 

This type causes integration of various cultures across the world where countries adopt
the idea, beliefs, cuisines, and clothing, of other countries. This is reflected by the fact
that people of one is aware about the culture, cuisines, etc. of another.

4. Financial globalization:

This can be linked with the rise of a global financial system with international financial
exchanges and monetary exchanges. Stock markets, for instance, are a great example of
the financially connected global world since when one stock market has a decline, it
affects other markets negatively as well as the economy as a whole.

5. Sociological globalization:

Just like information moves across all borders with the interdependence of events and
their consequences similarly people also move across borders mixing and integrating
different societies.

6. Technological globalization: 

The phenomenon by which of people are interconnected via social media platforms such
as Facebook, Instagram, Skype or YouTube. There is also investment and exchange of
various efficient technologies among different countries.

7. Geographic globalization: 

9
 It refers to the movement across different regions of the world that is constantly
changing. Globalisation has opened up various opportunities for people across all borders
depend upon their interests. In fact, with the transportation system made easier, faster and
affordable it is possible to travel the world without barely any restrictions.

8. Ecological globalization: 

It takes into account the idea of considering planet Earth as a single entity which is a
common good that all societies must protect since the effect of nature is everywhere.

Chapter 4
GLOBALISATION IN INDIA

During the colonial rule in India the Britishers had extracted all the resources of the economy
and destroyed the self sufficiency of the agrarian and rural economy of the country. India became
independent as a very poor country. The then Prime minister Jawaharlal Nehru preferred mixed
economy for the development of the country.  Hence Public sectors along with private
enterprises were setup. But since the Indian economy was of a socialistic model, thus it could not
generate sufficient amount of profit.  Many public sectors had fallen in the black and the poverty
in the country grew at an alarming rate. There was inadequacy of sufficient capital in the country
for investment purposes because of poorly managed and severely low domestic saving and an
acute crisis of balance of payments.  This led to the rise in inflation. There was barely any
availability of resources to provide even for basic educational and proper health facilities for the
increasing population.

10
With the World Trade Organisation pressurizing the govt to drop the trade barriers and have an
open economy, this situation left no other choice for P. V. Narsingh Rao government but to
introduce the New Economic Policy (1991) of Liberalisation, Privatisation and Globalisation
(LPG). The International Monetary Fund and the World Bank came to the aid of the Indian govt
in order to adopt this policy. The then finance minister Dr Manmohan singh played an
instrumental role in adopting this policy.

Liberalization

Its aim was to put an end to the restrictions which were an impediment to the development and
growth of the nation. The relaxation of government control in the country with private sector
companies’ working without or with fewer restrictions and the government allowance to the private
enterprises has expanded for the growth of the country.

Objectives of Liberalization Policy

 To increase competition amongst domestic industries.

 To encourage foreign trade with other countries

 To enhance foreign capital and technology.

 To expand global market.

 To reduce the debt burden of the country.

Privatization

It is the increment in the role of private sector companies and the reduction in role of public sector
companies. Government companies can be converted into private companies in two ways:

 By disinvestment

11
 By withdrawing governmental ownership and management of public sector companies.

Objectives of Privatization

 Improve the financial condition of the government.

 To reduce the workload of PSUs

 Raise funds from disinvestment.

 Increase the efficiency of government organizations.

 Provide improved quality of goods and services to the consumer.

 Encouraging foreign direct investments (FDI) in India

Chapter5
FACTORS AIDING GLOBALISATION

There are several factors that have acted as catalyst to the fast progression of the
globalisation process.

1. Technology
Reduction in the cost of transmission and communication of information which is sometimes
also known as “the death of distance" has been a key factor behind trade in knowledge related
products using internet technology. Higher efficiency technologies has resulted in higher
efficiencies.  The integration of various technologies across all borders has resulted in acquiring
new skills and more job opportunities. 

12
2. Improved mobility of capital
Reduction in the trade barriers has made the floor of capital easy between different domestic
economies. There's now global interconnectedness of all financial markets transcending all
borders. 

3. LPG reforms
The reforms adopted in 1991 has led to increased interaction of Indian economies with other
economies of the world. 

4. Improved transportation
It has made travelling across nation's border easier thereby facilitating the process of
globalization. Moreover the cost of shipping has come down due to to reasons such as bulk
shipping, containerization, etc. Lower cost of shipping makes the products more contestable in
the international market.

5. Rise of WTO
The organization was formed in 1994. It helped reducing the trade tariffs and trade barriers. It
has also resulted in many free trade agreements among various countries. Various different forms
of non tariff protection such as import licensing and foreign exchange controls have gradually
been done away with. The economies have opened and average tariff levels have decreased in
course of time.

6. Opening up of international financial markets

Many economies have removed capital controls in different forms in order to facilitate foreign
direct investment.

7. Differences in tax systems

Various corporation try aiming at reducing their production costs by benefiiting from lower unit
labour costs, other favourable factors endowed abroad. They try to exploit the comparative
advantages in production process in order to adjust their tax systems so that they can directly
attract foreign direct investment (FDI).

13
 Chapter6
CHARACTERISTICS OF GLOBALISATION

It is essential to understand the various characteristics of globalisation in order to be able to

understand its impact:

 Globalisation has seen a dramatic rise of trade in goods and services between countries of
the world.

 There has also been a tremendous increase in transfer of capital including an increased
flow of Foreign Direct Investment (FDI) by various multi national companies.

14
  There are now so many global brands that is accessible to people in both higher and
lower income groups.

 The world has become a global village where so many economies have become
interdependent on each other.

 Globalization has seen a rise in the levels of labour migration. It has led to social
integration and interdependence.

 Countries have been increasingly spending on innovation and infrastructure across

borders to increase the efficiency.

Chapter 7
IMPACT OF GLOBALISATION

Before understanding the impact it is necessary to understand all types of economies since the
process has affected globally:

 Developing countries: These are nations which have an underdeveloped industrial base

and where people have lower life expectancy, less education, and less income. Examples
of developing countries are most of the countries are in East Asia and in Africa.
 Transitional countries: They emerge from a particular type of economy towards a
market-based one. This type of economy is one wherein all countries attempt to change
their basic economic structure and policies towards a market-style fundamentals. The best
examples of type are China and Russia.

15
  Developed countries: These are countries with a lot of urban and industrial activities and
where people generally have high incomes. Their economies are a post industrial one
which means the service sector provides more wealth than the industrial sector. The
examples of developed countries are United States of America, Australia, and most of the
European countries.

An economy can have sectors in both the developing and developed stages, but cannot be
transitional at the same time.

Economic impact

1. Increased number of jobs

With more private enterprises and foreign companies entering into the service
sector, it has resulted in greater job opportunities. There has been an increase in
population over the years and globalization has provided with ample amount of
job opportunities.

2. More choices for consumers

With globalization, the competition in the market also rose giving ample choices
for the consumers to select goods and services. 

3. Higher disposable incomes

Standard of living increased and people in high paying jobs had greater income to
spend for an extravagant lifestyle. 

4. Decline of agricultural sector

16
 Due to various norms imposed by the World Trade Organization, the government
failed to give adequate support to agriculture. Agriculture now accounts for only
15% to GDP as compared to about 60% earlier. 

5. Increased health care costs

Greater interaction also meant spread of various diseases such as Ebola,
Coronavirus, etc. has resulted in heavy expenditure on healthcare. 

6. Increased child labour

India for instance, has been practicing child labour to reduce the production costs
and to bring about an increase in the margin for profit. Despite its prohibition the
practice still continues to prevail.

7. Inequitable distribution of income

Globalisation has increased the economic disparities between the haves and the
have nots quite severely. The distribution of resources and wealth has not been
equitable.

Social impact

1. Access to education
Globalisation has necessitated the need for specialization and promotion of higher
education. It has helped create awareness among the people. However with the advent of
private education, not all children are able to afford the cost of education thus increasing
the gap between the haves and the have-nots. 

2. Higher standard of living

17
 Due to various job opportunities, people are now able to earn more income thereby
increasing their standard of living. 

3. Nuclear families
Because of globalisation now there is an increase in migration and also financial
independence which has led to the breaking of joint families into nuclear families. It has
led to individualism. 

4. Old age vulnerability

Due to the rise of nuclear families, there has been a reduction in the social Security
thereby causing economic, emotional and health vulnerable of the old aged.

5. Equality of genders
Globalization saw the decrease in gender stratified roles immensely. Women have now
become independent and there is not much pressure on them to settle and have a married
life. Instead, now that can take their own decisions.

6. Social integrity
This has caused cooperation, interaction, integration and interdependence amongst
people. This is reflected by various cultures, languages, cuisines, etc.

Pros and cons of globalization

Benefits
 Removal of trade barrier: It has led to greater and easy access to the global markets. 
 Increase in competition: There has been an increase in innovation of efficient
technologies. 
 Raise in the standard of living: There are better future prospects for the industries in the
international market. 

18
Against
 It compromises with the well being of the people in developing countries
 It has widened the economic disparity between people. 
 The benefit of this process is accrued more to the developing countries.

CONCLUSION

The process of globalization is a multifaceted complex process. It has brought about significant
improvement in most of the economies in the world. The impact of has neither been very
positive nor negative. Although it has caused an economic disparity between the haves and the
have nots, increase in the expenses of healthcare facilities, however, it has led to the integration
of ideas, cultures, information and knowledge, technology, capital, labour, etc. inter
connectedness, integration and inter dependence has led to social integrity in the society and has
kept the society binding together. The early society was somewhat orthodox and there was
minimal interaction, however due to globalization there has been a higher rate of cooperation and
social integration. It has promoted cooperation and interaction between people. The process of

19
globalization has also transitioned many countries from a rural agrarian economy to an urban
industrialized one. Thus it can be concluded that the overall impact of globalization due to
privatisation and liberalisation has been very fruitful.

REFERENCES

Articles

 Globalization: The Concept, Causes, and Consequences by John Williamson

 The Social Impact of Globalization in the Developing Countries by Eddy Lee and Marco
Vivarelli

20
Websites

 https://www.piie.com/commentary/speeches-papers/globalization-concept-causes-and-
consequences
 https://en.wikipedia.org/wiki/Globalization
 https://www.yourarticlelibrary.com/essay/globalisation-and-its-impact-on-indian-
society/47112
 http://www.legalservicesindia.com/article/1395/Impact-of-Globalization-And-Its-Effect-
on-Society.html
 https://en.wikipedia.org/wiki/Globalisation_in_India
 https://www.civilserviceindia.com/subject/General-Studies/notes/effects-of-globalisation-
on-indian-society.html
 https://www.thebalance.com/globalization-and-its-impact-on-economic-growth-1978843
 https://byjus.com/commerce/globalisation/
 https://searchcio.techtarget.com/definition/globalization
 https://www.tutor2u.net/economics/reference/globalisation

21