Economic Globalisation: The Process and its Potential, Social, Economic and Environmental Impacts

After economic globalisation is defined, the factors that have favoured it in recent times are outlined and the process is placed in a historical context. Measures of the recent expansion in economic globalisation are given, such as trends in the proportion of global GDP traded internationally, and the relative size of global FDI. China’s comparative economic openness compared to the rest of the world is discussed. Potential positive and negative economic and social impacts of globalisation are explored, taking into account important economic theories. Particular attention is given to globalisation and the evolutionary dynamics of economic growth by considering the economic ‘catching up’ phase of countries, such as China, and by placing this in a general evolutionary context. The question is also posed of whether economic growth will eventually cease, and whether industrial and social structures could become defective once economic globalisation is well established and enters its mature phase. Economic growth fostered by growing globalisation also raises globally important environmental and natural resource issues of relevance to the sustainability of economic growth and to the fulfilment of human goals. Some of these issues are investigated, taking into account theories that provide an optimistic prognosis, as well as those which warn of dangers and difficulties ahead.globalisation, GDP, FDI, China, social impacts of globalisation, economic growth, Environmental Economics and Policy, International Development,

Safety and Socio-Economic Issues Raised by Modern Biotechnology

Modern new biotechnology has the potential to provide major economic and other benefits, but at the same time it poses potential hazards for human health, the environment, the ‘natural’ biological order and can have adverse socio-economic consequences. The application of such technology frequently violates traditional ethical, moral and religious values. This paper after outlining possible benefits of modern new biotechnologies, discusses the type of biosafety risks which they pose, their possible adverse consequences for the sustainability of biodiversity and agriculture and their potential impacts on socioeconomic welfare and traditional cultures. Particular concern is expressed about the possible consequences of such technologies for developing countries and the practice in some developed countries of issuing patents conferring very broad rights over the use of genetically engineered material. Because these rights are so broad in some cases they have the potential to establish powerful multinational monopolies in the hands of private companies. Global debate about these issues suggest that more emphasis should be given globally to the socio-economic consequences of such technology than in the past. The need for this is highlighted by the North-South divide. Developing countries lag considerably in this new technological field, are placed in a dependant position and have weak institutional structures to control the application of such technologybiotechnology, socio-economic policy, genetic engineering, biodiversity, biosafety, patents, Environmental Economics and Policy, Research and Development/Tech Change/Emerging Technologies,

Comments on a Note on Optimal Effort in the Maldivian Tuna Industry

Reasons are given why spatial differences in travel costs for tuna boats fishing in the same region may be of little significance in the Maldives. Claims are made that the fishing ground concept is of limited value in the case of a migratory species such as tuna and that there are practical difficulties in implementing the Campbell and Lindner tax/subsidy scheme, which in practice could give rise to a deadweight social loss. Furthermore, in the absence of empirical quantification, Campbell and Lindner give no real guide to optimal fishing effort policy in the Maldives.Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy,

Notes on biodiversity conservation, the rate of interest and discounting

This article shows that there is no regular relationship between the level of the rate of interest and the extent to which the conservation of biodiversity is favoured. Microeconomic examples are given in which a rise in the rate of interest adversely affects biodiversity conservation as well as other cases in which the opposite is the case. When these alternative possibilities are taken into account, they suggest that rises in the rate of interest (other things held constant) are more likely than not to aid biodiversity conservation. This is expected to be so when there considerable upfront costs are involved in economic strategies that bring about environmental changes so that in the initial periods the private net benefits from these changes are negative although subsequently they can become significantly positive. Consideration of macroeconomic models reinforces the view that there is no definite association between changes in biodiversity conservation and the rate of interest. This is so assuming that there is a positive association on the whole, between the rate of (man-made) capital accumulation (the investment level) and biodiversity loss. From macroeconomic models, it is clear an increase in the level of aggregate investment can be associated with a rise or fall in the rate of interest (and vice versa) depending on the circumstances. This is illustrated by using a simplified form of the loanable funds theory originally developed by Wicksell but is also consistent with other general theories of the rate of interest. In conclusion, doubts are raised about our ability to enforce a zero (or very low) social rate of discount in market or mixed economy. It is, however, suggested that if a low ceiling is put on the rate of interest, this will reduce savings and consequently, investment and would be favourable to biodiversity conservation given that an increase in the rate of (man-made) capital accumulation is the main contributor to biodiversity loss. Finally, it is noted that mainstream economic models measuring possible welfare streams give no weight to the conservation of biodiversity per se. Therefore, policies designed to achieve the sustainability objectives specified by these models can continue to favour biodiversity loss on economic grounds

Sustainable Development and Intergenerational Equity: Issues Relevant to India and Globally

As outlined, recurring concerns have surfaced since the 1700s that economic growth may prove to be unsustainable. These concerns have been expressed again and have intensified in recent decades but their foundation differs from that of Malthus. The rapid economic growth of China and India have added to these worries. Recent discussions by economists of the desirability of achieving sustainable economic development have mainly focused on measures to attain intergenerational equity in resource use and the dominant view is that each succeeding generation should be at least as well-off as its predecessor. While this is said to be an implication of Rawls‟ principle of justice, this dominant rule does not fully reflect Rawls‟ principle and it also can violate the Paretian improvement criterion. However, the full application of Rawls‟ principle leads to questionable results. For example, it assumes a greater degree of risk-aversion than seems likely in practice and it ignores the importance of intergenerational altruism, for example, the sacrifices that parents willingly make for their children. Rawls‟ principle also displays cosmological bias which results in it being at odds with the teachings of Hinduism and Buddhism. The mainstream stance on sustainable economic development does not appose economic growth. However, another neo-Malthusian point of view, expressed for example by Daly and Georgescu-Roegen, does. It is opposed to an increase in levels of global material production, that is, increased throughput of natural resources for economic production. These views are given some attention. Even if there is agreement about what constitutes a desirable path for economic development, uncertainty limits the scope for identifying measures that will achieve it. That raises the question of how far into the future should existing generations attempt to sustain economic development. This is discussed. In conclusion, it is pointed out that the nature of market systems and international relations make it very difficult to implement policies that can significantly reduce global economic growth and foster sustainable economic development. These problems are global problems and no country, India and China included, can afford to ignore them

Competition, Evolution and Optimisation: Comparisons of Models in Economics and Ecology

Discusses concepts of competition in economics and ecology and the relevance of evolution to both subjects. It is suggested that although speciation or increasing biodiversity tends to occur in undisturbed ecological systems, the opposite trend may occur in economic systems. Competition based on optimisation plays a significant role in theories of the evolution of species and some theories of the evolution of business or industrial structures. But evolution does not result in optimal selection of species or businesses for the future, and there is scope for doubt about what is being optimised by survivors in the evolutionary process. Ecological or biological theories of intra-specific competition involving scramble and contest competition are outlined and economic analogies are identified. It is argued that heterogeneity or diversity of individuals within a population of competing members has important implications for the sustainability or stability of populations involved in these types of competition. Comparisons are made between the survival of new industries and the probability of survival of populations of species

Notes on the Economics of Control of Wildlife Pests

Some wildlife species are agricultural pests but these populations are often valued by other than agriculturalists. For non-farmers, the population levels of such wildlife are frequently pure public goods. This is one source of market failure in the economically optimal social control of an agricultural pest of this type. Secondly, if the species is geographically mobile, externalities occur between farmers in the control of the species, and this reduces the incentives of farmers as individuals to control the pest species. It is shown that depending on the relative strength of these opposing types of market failure, farmers may excessively reduce or insufficiently decrease the population of a species from a social economic point of view

Globalisation, WTO and Sustainable Development

This overview is divided into two main sections. The first sections reviews the literature on the impact of economic globalisation (involving of liberalisation of international trade and investment) on the state of the environment and sustainable development. While the WTO and Bretton Woods institutions believe that this impact can be expected to be favourable, divergent rational views can be found in the economics literature. A review of the relevant literature reveals that the situation is far from being black-and-white – there are grounds for rational doubt not withstanding the use of Environmental Kuznet’s curves, which on the surface seem to provide grounds for optimism. The second main section dealt with the attitude and policies pursued by GATT-WTO in relation to the environment and sustainable development. These appear to be based on orthodox neoclassical economic theory which is mostly static in nature. In practice, virtually no allowance is made by the WTO for the environment and for sustainable development. The Rio Declaration, Agenda 21 and the Winnipeg Principles have had little or no impact on its policies. A charitable interpretation of its policies would be that it is pursuing weak conditions for sustainable development. Both changing public opinion and evolving academic thought are raising major challenges to WTO’s basic theory and its approaches to environmental protection. Different views expressed at the Seattle Meeting cannot continue to be ignored. New efforts are needed to ensure that WTO plays a more constructive role in the future in coordinating trade, environment and development, and a way forward is suggested