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Implication of globalisation on social policy Essay

It is now difficult to read a newspaper or a book, watch the television, surf the Internet, or participate in a demonstration without coming across references to how ‘globalization’ is affecting our lives. One of the crucial challenges facing many developing and transitional economies is balancing the benefits of globalisation with the risks and costs. According to Sheila L (2004) : ‘Globalization can be described as a process by which the people of the world are unified into a single society. This process is a combination of economic, technological, sociocultural and political forces’Globalisation is a complex phenomenon, with economic, political and cultural dimensions.

At the centre are economic pressures stemming from trade liberalization and increased international competition driven by technological change and growth of the knowledge economy. But political globalisation as reflected in regional groupings, American power, and the influence of global institutions such as the OECD and the IMF may also compromise the self-determination of individual countries. According to Giddens (2001) there are also powerful influences that stem from a cultural globalisation of ideas and values. Thus the process of globalization results in the dissemination and transfusion of ideas that attain significant global social policy currency. Individual countries can both contribute to and be influenced by this process .

Effect of globalization:Globalization has variety of effects, that are influencing almost every aspect of life, existence, as well as economic, industrial, financial, social area. Increase of globalization can be seen on Table1. In most of the countries given in example, that measure doubled or, as in case of Czech Republic, even tripled.

Basing on Wikipedia division, I would like to highlight economic effect of globalization, that seen in sociological context, increased economic inequality throughout the world and within the United States. Globalization since 1980 has also raised the inequality between nations and peoples, and cemented the polarization of the world into rich and poor nations. Increased competition that induces changes in production in an economy will lead to better allocation of resources, greater efficiency and productivity. However, even if there is net benefit from globalization for the whole economy, some groups and sectors will lose. The net benefits are not shared equally amongst the population and globalization can increase inequities to the extent that certain groups, sectors or regions, are able to participate and grow much faster than other groups, sectors or regions within a country. Therefore, whilst the benefits of globalization are generally accepted, the jury is still out on assessing the social impact arising from globalization and more importantly how to best manage the risks and costs in order to maximize the net benefit for all concerned.

Impact of globalization on social policiesNowadays all countries are exposed to economic pressures from globalization that has had implications for social policy. Chart 1 show how Social Globalization has developed over time – measured by the average of the individual country indices.

There are numerous arguments regarding how globalization aggravates social problems, while at the same time weakening states’ ability to address them. Expansion of globalization, and the preoccupation with business interests and national economic competitiveness inherent to it, is said to erode democracy itself by depriving voters the opportunity to get their governments to provide social protection. Thus, globalization both increases market-based inequalities through increased labor-market inequality and also places pressure on the capacity of governments to ameliorate them through tax policy and transfer payments and services.

They have also employed greater targeting of benefits and encouraged the expansion of private insurance against labor market risks. Health and other social service programmers have been subject to budget caps, user co-payments, internal markets and other efficiency-oriented reforms. Continuing high levels of social expenditure and considerable differences in levels of poverty and inequality provide support for this view and challenge the idea of an inevitable globalization-induced ‘race to the bottom’ in social spending. But as data from Table 2 suggests us, although expenditure patterns over recent years have been broadly convergent, the trend is not, in fact, towards the bottom, but towards generally higher levels of spending and a greater salience of welfare state objectives.

Although in some continental countries, like Denmark, Netherlands, Italy etc. rose only modestly, or even decrease. In U.K and USA increase of Gini Coefficient remains as the highest, close to 8%. According to IMF trends in income inequality across advanced economies have been quite different. In the United States, which started out with a relatively high degree of income inequality, it has increased even further. However, other countries with initially low levels of income inequality, including Denmark, France and the Netherlands, saw some further decline.

The impact of globalization on social policy can be seen in both developed and developing countries. Globalization at itself suggest that transnationalisation of production exerts pressure on states to reduce the burden of taxes and regulations on firms. While this reduces financial and compliance burden on firms, it also erodes the states’ fiscal and organizational capacity to maintain the welfare state. Second, it is argued that generous welfare benefits stifle work incentives which gradually undermine an economy’s international competitiveness. Governments are, as a result, obliged to keep benefits in check and preferably reduced in order to maintain international competitiveness. Third, concern for the investors’ sentiments leads governments to focus on balance of payment, inflation and fiscal prudence because governments that do not sufficiently address these concerns find their nations shunned by business, which dampens economic growth, which in turn undermines voters’ support for the government.

As a result, governments can no longer boost their economy through expansionary social and economic investment measures and must instead rely on promotion of international trade and investment, which serves the interests of business more than the society at large. Globalization enters the ways in which the content of social policy and the distribution of welfare are shaped by: governmental and nongovernmental organizations responding not only to domestic issues and sources of pressure but also to circumstances, events, and developments in other countries; the policies of foreign governments, international organizations, and financial institutions; and the decisions and activities of overseas headquarters.

In essence, then, globalization draws attention to the ways in which societies, economies, and polities – including labor markets and welfare systems – of different countries are entangled in one another. All this is effecting in lowering social and labor standards, as well as shifting public services (like heath-care and education), to privatization and existence on global market. That’s why issues with which social policy is concerned to the level of supranational institutions, agencies, and forums, both world-regional (e.g. EU) and global (WB etc) are raised.

ConclusionIn my assignment I examined the interconnections between globalization and social policy. I have seen that globalization is a complex process, and that ‘globalization studies’ displays a range of theoretical, ideological, and political perspectives. Summing up influence of globalization is taking different directions, what is mostly depended by the stage of development and character of country. Social problems ranging from famine to floods, from pollution to poverty, and from rural depopulation to urban overcrowding are commonly cited examples of the many invidious effects of globalization on social welfare. Conversely, globalization is trumpeted as being central to many developmental successes, such as poverty reduction, increasing economic prosperity, better services, and enhanced concern with human rights. Even those who are skeptical of the benefits globalization has brought so far may point to the ways in which it has the potential to transform political, economic, and social relations within and between countries to the benefit of human welfare worldwide.

Globalization brings new potentials for development and wealth creation. But there are divergent views and perceptions among people as concerns its economic and social impact, and indeed widely varying impacts on the interests and opportunities of different sectors and economic and social actors. Some argue that the present model of globalization has increased problems of unemployment, inequality and poverty, while others contend that globalization helps to reduce them. In my opinion, these problems predated globalization, but it is clear that for globalization to be politically and economically sustainable, it must contribute to their reduction. Hence the future goal of a globalization is meeting needs of all people.


Edwards, R. 2000. Globalisation and Pedagogy : Space, Place and Identity. London, UK: RoutledgeFalmer,Giddens, A. 2001. Introduction in The Global Third Way Debate, Cambridge.

Hill M., 2006. Social Policy in the Modern World, Blackwell PublishingJackson A. Globalization and progressive social policySheila L. Croucher. 2004. Globalization and Belonging: The Politics of Identity in a Changing World. Rowman & Littlefield. p.10http://en.wikipedia.org/wiki/Globalizationhttp://globalization.kof.ethz.ch/static/pdf/press_release_2008_en.pdfhttp://www.imf.org/external/pubs/ft/wp/2007/wp07169.pdfhttp://stats.oecd.org/wbos/default.aspx?DatasetCode=SNA_TABLE11http://www.imf.org/external/pubs/ft/wp/2007/wp07169.pdf

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