Does Globalization Undermine Democracy and Increases Poverty?

Globalization is a multifaceted concept. It means worldwide dissemination of ideas cultures and trading of goods and services. The trade exchanges and the cultural give and take were initially between the developed nations of the world. Then gradually it was realized that this process of international trading of commodities and services could be more beneficial in terms of financial outcomes if developing and poor nations were also included. We have to see how it interacts with the idealist notion of representative government that is prevalent in the world by the nomenclature of democracy.

The other very important aspect of globalization is its effect upon poverty. GLOBALIZATION Globalization is the catch phrase of the modern world. It is process of interaction of economies exchange of ideas and cultures and flow of information and technologies from one part of the world to another. This seemingly post cold war phenomenon has been received with consternation and with hope that it will spread social parity across the globe. People from the very advent of humanity on the face of the earth have been moving from one part of the world to another.

Silk route and the fame of china’s silk and Indian spices are suggestive of the fact that people have been permeating national boundaries in search of opportunities to improve their lot through trade. The recent technological advancement and the entrepreneurial ventures of multinational companies have brought the age old tradition of seeking greener pasture in a foreign land to the fore front. The contemporary globalization has its nuances. According to Friedman the globalization of the past two decades is “faster, cheaper and deeper.

” (Friedman, 1999) The current trends of globalization are different from the migration of communities and ideas that took place in ancient times as the political and social implication an event in the region has effects on the international arena. Some see Globalization as system which has international ramification and has wiped out the cold war system. This process is aided by the technological advancement and should have been based on co-operation and equal distribution of wealth.

There has been brouhaha over the shrinking of the world into global village because it is seen as force that is going to destroy the culture tradition language and society of the different nation . It is seen by the developing nations as superimposition of culture and value system of the dominant nations. Many nations in response globalization have adopted free market economy which has negative affect on the indigenous industries. The two opposing reactions are generated by globalization one seeks preservation of the nation’s sovereignty interest and culture the other believes in using it as a tool of advancement.

Globalization has been seen as threat to territorial integrity of nation as perceived by the liberal democracy. (Scholte, 2000) DEMOCRACY Democracy is the much sought after style of government but the very concept of representative government as espoused by democracy has its flaws. It is fraught with tensions between an individual’s aspiration and collective aspirations which democracy is designed to cater to. It the only legitimate form of governance in the present world.

This popular system of governance has increased its hold by two thirds during the 1970s on system of governance currently being practiced by the nations of the world. (Held, 2006) It doesn’t have hold on one third of the world which is reeling under authoritarian rule. Political systems like democracy have been influenced by the political theory which has been built upon by political thinkers and philosophers. Globalization has unfortunately no such models to follow We need to define democracy before we proceed towards a discussion of how globalization undermines democracy.

Since the term democracy has myriad hues it would be difficult to give a precise definition of the term. The whole discussion revolves around the analysis that whether democracy is essential ingredient of development. Some researchers say that there isn’t a direct link between democracy and development of nations. Others are of the view that there is a linear relationship between democracy and development. Many researchers argue that the relationship is muddled one at the best and is referred by them as the black box.

(Rueschemeyer et al, 1992) The pro globalist argue that those countries in which there is an established democracy where there is rule of representatives of the people selected by adult suffrage and have adopted free market economy there is reduction in poverty. (Baldwin, 2007) The process of globalization has tied the hands of the government of nation when they are making decision as they have to consider its implication on the global arena which comprises of the states and business conglomerates and organizations.

Cheaper and faster means of transport have facilitated trade like never before and this has led to business conglomerates to expand into other countries and the balance of social powers is shifted in favor of the few elite groups’ persons and organizations. The control of the resources and the ideology of making profits sometimes obliterate the betterment of masses because it might not reap the returns that the big business wish to achieve. Prior to Recent wave of globalization capitalism was seen by the political scientist as a threat to democracy.

It was seen as power that would veto the moves made by the government due to their influences in the corridors of power because of their contribution to election campaign. If the governments don’t comply then they can coerce them by raising the interest and stopping investment in the market. They can use their resources to make elected government unpopular. The present world has seen that the globalised liquidity and fast transaction of finances can really tie the hands of governments of nation.

They can easily be a play in the hands of the investors. One of the reasons for the outsourcing ventures that the investors have undertaken is that they are able to get cheap labor. This is eventually going to make the governments bid to raise salaries difficult. (Rupert, 2000) The debate surrounding globalization has to be focused on how the economy that is generated by this process has to be utilized. It has been noticed that it has led to exploitation of the poverty stricken masses of the underdeveloped and the developing nations.

United States of America and other developed nations have reaped the benefits of this system but it has marginalized the indigenous racial ethnic minorities. It has increased the financial uncertainty and it has initiated a race to outdo one and another with complete disregard to well being of the masses of the nations. The system of globalization has come under heavy criticism because it has been observed that the international institutions like WTO IFI, IMF World Bank are not safeguarding the interest of the entire nation but are playing in the hands of the wealthy nations.

The decisions that are made in these organizations are evidence to the fact that the governments of the nation have little say in their formulation. Only some nations which are economically strong have a say in the decision making process. One reason for this is that the issues that are dealt within theses organizations are secret and confidential in nature. The processes through which decisions are reached in these organizations are undemocratic in nature. (Baldwin et al, 2007) Many organizations like World trade organizations have been set up to intercede with the participating nations over trade issues.

The WTO acts as an arbitrator over the issues of trade disputes. In these tribunals federal and state regulations are challenged Jury is constituted of trade experts who are mainly lawyers. (Li, 2004) The other positive side of globalization is that it can be utilized to strengthen the democratic ideals by ensuring that where there is human rights violation the world community is going to rise and bring the regimes like general Pinochet to book. (McGrew 1997) POVERTY There has been an inalienable link between impoverishment and lack of power.

The world has never seen that rich have no say in the affairs of their life the workings of their governments. The interests of the poor have always been relegated to the background. The nexus between poverty and powerlessness has been there from eternity. Globalization has adversely affected the poor and the poor nations. Democracy is a form of governance that caters to the interest of every section of society irrespective of his economic status. The multinational companies operating in developing nations and the poor countries don’t have the same working ethos that they had in their parent country.

The wages that companies give to workers are very low in comparison to what they are paying in their countries. Poorer nations of the world are often referred to as the sweat shop. 80% of the international investment is directly done by these multinational companies. (Held, 1998) These multi national companies are providing job opportunities in the poor countries but they are offering lower wages. These underdeveloped nations of the world lack infrastructure for technological advancement and this is provided by these big business when they launch their business ventures.

There has been an overall reduction in the levels of poverty but this hasn’t taken place due to singular contribution of globalization. Democracy as an ideology has direct link with development and consequently it will reduce poverty. (O’Donnell, 1973) CONCLUSION Everything in this world has both the aspects the good and the bad aspect therefore globalization can be utilized for the betterment of humanity if the global economy that is generated as result of the process of international investment is democratically used.

Democracy has always been under the threat of capitalism and the contemporary times have seen that the free global market economy has undermined the will of the people in all parts of the world it has shattered the dream of increasing their standard of living. (Sanders, 1999) There are two solutions to the problems posed by the issue of globalization. One way of dealing with this problem is that globalization should be eradicated. This is impractical solution because the technological advancement is such that it would difficult to put an effective ban on it. The other way is to work around this issue and use it in positive manner.

It has been suggested that there democratic international institution . Even this solution is posited with problem because of differences in the economic status and cultures. European Union is an example of translational democratic setup. (Engelstad, 2004) It must be remembered that there are certain issue like health environment security etc. are areas of universal concern. These issues need transnational co-operation and understanding in finding a solution and approach to these issues. This is not the first time that the nations of the world have realized that they are in need of international organization to settle their issues.

After the World War there was formation of organizations like United Nations to settle the issues affecting many nations. Globalization has in some ways revealed the shortcoming of the most prevalent form of government i. e. democracy . It has brought to the forefront that sometimes the will of the people can stand on flimsy ground because the choices made by majority of the people might not be ethically right. It has also questioned the long standing concept of nationalism might not match up to the demands of justice.

The cosmopolitan democracy as espoused by Held has been subject to much criticism but has been upheld by many as having a promising future. (Brock, 2002) The contemporary times have more developed and powerful means to bring forth a transnational platform. The world is better prepared than it was when United Nations was being formed. (Archibugi et al, 2000) It must be remembered that the entire pantheon of political analyst are unanimous in saying that current form and practice of globalization is somewhat undermining the democratically elected government of developing and poor nations.

Some like Held are suggesting that it could be used in manner that will serve the interests of all the nations of the globe.


Archibugi, D. , S. Balduni, and M. Donati. 2000. The United Nations as an agency of global democracy. In Global democracy: Key debates, edited by B. Holden. London: Routledge Bernie Sanders Brecher Smith E. Frank 1999 The global sustainable development resolution. Daniele Archibugi David Held, Martin Kohler Re-Imagining Political Community: Studies in Cosmopolitan Democracy Publisher: Stanford University Press; 1 edition (August 1, 1998)