Question

The balance of economic globalization is achieved through international trade. The volume of world trade since 1950 has increased twenty-fold from $320 billion to $6.8 trillion. However, international trade can also bring about certain kinds of economic, political, and social disruption. Explain how globalization can have a disruptive impact on developing nations.

Answer 1

It might cause instability and financial crisis. The capital will be out and in abruptly, which will cause the exchange rate to be unstable. Structurally, it might be the main cause of inequalities and environmental degradation, including rent seeking and corruption behavior. 


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Answer 2

Globalization typically brings rapid economic growth in developing nations. That may lead to inflation and inequality in those nations. The rapid growth may also cause pollution and damage the environment which means worse living conditions for some people.