7.6: Globalization

Introduction

When the Cold War ended in 1991, many observers believed the world was converging on a single model. Democracy had outlasted authoritarianism, capitalism had outlasted communism, and free markets seemed destined to spread everywhere. Political scientist Francis Fukuyama (1992) famously described this moment as the "end of history," meaning that liberal democracy might be the final form of human government. Journalist Thomas Friedman (1999) described globalization as an overarching international system that would shape the domestic politics and foreign relations of nearly every country.

Three decades later, the picture looks more complicated. Trade, travel, and technology have connected the world more closely than ever, yet nationalism has surged, authoritarian states have grown more assertive, and many governments are now trying to limit their dependence on global markets. Comparative politics helps explain why. Globalization does not affect every country in the same way, and states make different choices about how to engage with it. This section examines what globalization is, how states have responded to it, and why it has become one of the most contested issues in contemporary politics.

Three Dimensions of Globalization

Scholars generally agree that globalization is more than economics (Steger 2020). It is useful to think about three connected dimensions.

Measuring Globalization

Because globalization varies across countries, comparativists try to measure it. The KOF Globalisation Index, produced by researchers at ETH Zurich, scores countries on economic, social, and political globalization using indicators such as trade flows, foreign investment, international travel, internet use, and membership in international organizations (Gygli et al. 2019). Measures like this allow researchers to ask comparative questions. Why are some countries far more globalized than others? Do highly globalized countries have different welfare systems, levels of inequality, or rates of political backlash?

Globalization and the State

A central debate in comparative politics asks whether globalization weakens the state. Some observers predicted a "race to the bottom," in which governments would cut taxes, regulations, and social spending to attract mobile investment. The evidence is more mixed. Political economist Dani Rodrik (1998) found that countries more open to trade actually tend to have larger governments, because citizens demand social protection against the risks of international competition. Small, trade-dependent European democracies such as Denmark and the Netherlands paired open markets with generous welfare states and close cooperation among government, business, and labor (Katzenstein 1985).

Rodrik (2011) later argued that countries face a globalization trilemma. A country cannot fully achieve deep global economic integration, national sovereignty, and democratic politics all at the same time. It can pursue any two, but something must give. This framework helps explain why globalization creates political conflict. When global rules limit what elected governments can do, voters may feel they have lost control over their own economic futures.

The varieties of capitalism approach also shows that states engage with globalization in different ways (Hall and Soskice 2001). Liberal market economies, such as the United States and the United Kingdom, rely heavily on competitive markets and flexible labor. Coordinated market economies, such as Germany and Japan, rely more on cooperation among firms, unions, and government, including strong vocational training systems. Each model has adapted to global competition in its own way, which is why globalization has not produced a single economic model worldwide.

Different Paths Through Globalization

Winners, Losers, and Backlash

Globalization has produced large overall gains, but those gains have been unevenly distributed. Economist Branko Milanovic (2016) showed that between the late 1980s and the late 2000s, incomes rose rapidly for the emerging middle classes of Asia and for the richest people in the world, while working-class and lower-middle-class incomes in wealthy countries grew slowly. Research on the United States found that communities most exposed to Chinese import competition experienced lasting job losses and lower wages (Autor, Dorn, and Hanson 2013).

These uneven effects help explain the political backlash against globalization that has appeared in many countries. Rodrik (2018) argues that populist movements on both the left and the right have drawn support from voters who feel left behind by trade, immigration, and financial integration. The 2016 Brexit referendum, in which British voters narrowly chose to leave the European Union, is one prominent example. Nationalist and populist parties across Europe, Latin America, and Asia have also campaigned against international institutions and trade agreements. Connecting these trends to earlier chapters, globalization can strengthen national identity as a political force, fuel social movements, and in some cases contribute to democratic backsliding.

From Hyperglobalization to "Slowbalization"

A series of shocks has slowed the pace of global integration. The 2008 global financial crisis showed how quickly problems in one country's financial system could spread worldwide. The COVID-19 pandemic exposed the fragility of long supply chains when shortages of masks, medicines, and computer chips affected countries around the world. Russia's 2022 invasion of Ukraine led to sweeping sanctions and forced European countries to rethink their dependence on Russian energy. Rising tension between the United States and China has led both countries to restrict trade and investment in sensitive technologies.

In response, many governments have returned to policies that were out of favor during the height of globalization. Tariffs, subsidies for domestic industries, and efforts to move supply chains closer to home or to politically friendly countries have become more common. Some observers describe this period as "slowbalization," a slowdown rather than a full reversal of global integration. Trade, travel, and digital connections remain far higher than in earlier decades. What has changed is that states are more willing to intervene in markets in the name of national security, economic resilience, and domestic political pressure.

These developments suggest that the state remains the central actor in comparative politics. Global forces shape the choices governments face, but domestic institutions, political coalitions, and national histories still determine how each country responds.

Connecting to Course Themes

Globalization links many topics in this book. It shapes political economy, because trade and investment affect growth, inequality, and the role of the state. It interacts with identity, because nationalism and cultural change often rise in response to global integration. It affects regime type, because both democracies and authoritarian states use globalization to pursue their own goals. And it connects to the global challenges discussed in this chapter, including inequality, climate change, and cybersecurity, none of which any single state can solve alone.