The Great Convergence - Information Technology and the New Globalization by Richard Baldwin

Author:Richard Baldwin [Richard Baldwin]
Language: eng
Format: epub
Tags: Economics
Publisher: Harvard University Press
Published: 2016-11-13T18:30:00+00:00

Globalization: Less Controllable

The pace of globalization has become much less controllable due to the nature of its driving forces: advanced information technology and better telecommunications. The crux of the new impact is the simple fact that reductions in the cost of moving goods and reductions in the cost of moving ideas happen in dissimilar ways.

Trade costs come down with tariff cutting and better transportation technology. All of the tariff cutting and most of the transportation infrastructure decisions were in the hands of governments. They could—and usually did—decide to go slowly to allow domestic firms and workers time to adjust. For example, after each round of negotiation by members of the General Agreement on Tariffs and Trade, the agreed-to tariff cuts were phased in over five to ten years.

Likewise, transportation technology, with a few exceptions, advanced steadily and often required large fixed investments that were naturally spread over many years. Supersize container ships are transforming shipping today, but new ships are introduced gradually. The ICT revolution in the twenty-first century is quick and chaotic by comparison.

Importantly, very little of this technology development is controlled by governments. This was not tariff cutting, whose pace was set by diplomats in Geneva. Most of the technical advances derived from private, profit-motivated R&D. And while governments could have stifled expansion of the Internet and telecoms, almost none did. To put it differently, governments controlled the sluicegates for the Old Globalization. By contrast, no one in particular controls the New Globalization’s sluicegates.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.