Most developed countries have a democratic form of governance. Basically, the mode of administration involves the participation of, and vesting of powers in the public. Additionally, democratic nations allow the citizens to rule directly or indirectly through elected representatives. The Unites States is a typical example of a democratic state. The problem statement of the study is to analyze the relationship between democracy and globalization. The study further compares a developed country to a developing one in order to have a clear understanding of the connection.
Where there is democracy there has always been a chance for the citizens to be a contributing factor to the business environment. Democracy gained popularity in the early 1970s and by the year 2000, the GDP of countries that participated in globalization had risen significantly (Hietala 41). Notably, the GDP of America had increased upto 13.45 trillion US dollars in 2000 (Furtado and Macedo 56). Democracy contributes to a positive business environment and it attracts foreign investors from different countries. The factors that led to enforcement of democracy which promotes globalization are: lack of particular commodities that cannot be found or produced in a country, and also slow growth in some nations. Countries like China and the United States embraced democracy before other countries did, which enhanced bilateral trade between these two countries in the early years. Countries that are considered as first world nations are as a result of their democractic governance creates unlimited opportunities in trade.
International trade dates back before World War I and it became more active after World War II. The main factor that led to increased levels of trade is the elimination of capital and trade barriers between countries (Malaguerra 188). Non-tariff barriers have also been eliminated overtime, and as statistics show, the number of countries that were known to carry out trade before the World War I were 14 in number and by the end of World War II, there were approximately 156 countries participating in bilateral trade.
The main actors who contributed to the problem of slow implementation of democracy are the colonialist and community leaders of the less developed countries. In the case of African countries that were later colonized by European countries, they were reluctant to accept democracy as the rule of law. Community leaders were a major contributing factor because they were for the dictatorship kind of ruling system where they would control trade, and the community members had little say in the matter. Colonialization was also a hindrance to democracy and globalization. Precisely, colonialists engaged in trade norms that were not favorable for the developing countries. Acts like slave trade reduced the capability of developing countries from utilizing their full potential in trade. A lot of time and effort were used in resistance by the countries being colonized and there was less focus on trade. However, after the colonial states gained full independence, they were able to engage in trade, and through democracy, states were able to remove several barriers to trade.
Rosendorff postulates that democracy and globalization are closely related (34). The author further argues that democracy is exemplified by basic principles which include justice, human participation, innovations, and human rights. These principles are all geared towards enhancing development in different societies. Basically, democracy entails representation for all individuals regardless of social status.
Previous studies show that there is a direct relationship between globalization and democracy. Countries that embraced democracy since self-rule showed a faster growth of domestic product compared to countries that embraced dictatorship and aristocratic methods of governance (Myoung-hag Chang45). Studies also show that countries with high codes of business ethics have registered high GDP growth due to equality and elimination of cartels in the business market.
The problem of democracy and globalization can be efficiently dealt with both at the national and international levels. At the national level, states can create an enabling environment by building more export processing zones that support the local products that are meant for exports (Dixit 1950). Another solution that can help local governments to promote more globalization and democracy is by reducing the taxes imposed on exports. Export duty should be reasonable and negotiated by both the traders and the government. Such actions by the local government will lead to increased GDP among states; besides, there will be an equal increase in the rate of development. Figure 1 below shows a snapshot of the impact of reduced tax on the GDP and development in the near future.
Democracy and Human Rights prompt:
Tax Reduction and Economic Growth Image
International solutions to globalization and democracy need international leaders to agree on the terms of trade and eliminate barriers such as currency differences. Countries with currencies that are weak have low purchasing power compared to nations that use currencies such as pound sterling. Countries need to agree on a common trading currency to avoid some nations being tyrannized during trading. The issue of countries producing substandard goods can be dealt with by creating a common organization that deals with quality control. This will ensure fairness in the quality of goods received, and will avoid cases of dumping goods in countries with lenient quality control organizations.
When the issue of globalization and democracy becomes a matter of international urgency, the gap between the developed countries and the developing countries will reduce and there will be uniformity in economic growth. There is enough evidence from developed countries that democracy across all institutions leads to favorable trade environments. Elimination of trade barriers, on the other hand, is a factor that has the capability of raising the standards and GDP of developing countries.
Dixit, Avinash K. “Democracy, Autocracy and Bureaucracy”. Journal of Globalization And Development, vol. 1, no. 1 (2010). Retrieved 3rd Nov 2018 from doi:10.2202/1948-1837.1010.
Furtado, Celso, and Suzette Macedo. “Maps.” Economic Development of Latin America, vol. 3, no. 2, pp. 50-68.
Hietala, Marjatta. “New Challenges for Urban History: Culture, Networks, Globalization”. Culture & History Digital Journal, vol. 1, no. 2, 2012, p. 32-48. Retrieved 3rd Nov 2018 from doi:10.3989/chdj.2012.008.
Malaguerra, Carlo. “Official Statistics, Globalization And World Democracy – A Challenge?” International Statistical Review, vol. 73, no. 2, 2007, pp. 187-190. Retrieved 3rd Nov 2018 from doi:10.1111/j.1751-5823.2005.tb00267.x.
Myoung-hag Chang. “The Korean Republican Democracy atthe Age of Globalization – Participatory Republican Democracy inthe Current of Neo-Liberal Globalization -“. Journal of Social Science, vol. 35, no. 2, 2009, pp. 21-50. Retrieved 3rd Nov 2018 from doi:10.15820/khjss.2009.35.2.002.
Rosendorff, B. Peter. “Globalization andthe Erosion of Liberal Democracy”. SSRN Electronic Journal, 2017, p. 12. Elsevier BV, doi:10.2139/ssrn.3084222.
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Published On: 13-06-2017
