This paper was submitted for “Political Science 20: World Politics” with Professor Richard Anderson and Michael Stone in Spring 2009.

Globalization, as suggested by Nau, is the process of consolidating into a single global economy (273). Nau uses Thomas Friedman’s The Earth is Flat as the framework for the history of globalization and the shift from absolute power to institutions to individuals (277). However, the working definition of globalization I will be using is a bit different. I will focus on the effects of transport costs under globalization. Reduced transport costs allow cheaper goods to be bought from foreign countries, increasing overall absolute global trade. There are seven distinct areas of policies that a government can enact that directly affect its relationship to the globalized world economy (328), but I will focus exclusively on trade policy and how a state can manipulate trade policy in response to globalization. The decisions on a systemic level result from compromises and resolutions on the domestic level. While globalization has allowed for increased specialization and the division of labor, states still have the ability to control domestic policy in its interest. However, the extent to which a state can respond to international economic pressures is dependent on its capacity and willingness to compromise or be left behind in a globalizing world. The actions of both developed and developing states are ultimately enhanced and constrained, respectively, in a globalized economy.

Continue reading »