What were the main forces promoting globalization in the late 20th century?

How different was this from what had happened in the late 19th century?

INTRODUCTION
An accurate definition of globalization is elusive, but it is widely accepted that the world is becoming increasingly interconnected in terms of its economic, political and cultural life and that information technology (IT) is deeply implicated in the change process altogether. But the ongoing process of globalization is exceedingly economic and the economic content of globalizations set the agenda for political action. This economic globalisation is managed by neo-liberal ideas, the pale shadow of Keynesian Economics World Bank (WB), International Monetary Fund (IMF) and World Trade Organization (WTO), multinational corporations and Davos Citizens (those who are participating in the annual meeting of G-8 Groups).

GLOBALIZATION IN THE 20TH CENTURY

The "short twentieth century" has ended unexpectedly (Hobsbawm, 1994). The spread of globalization has been fed by many factors. One of the most important has undoubtedly been the ever compliant pro-globalization decisions made by the worlds governments. Another important one has been institutions created by the economic globalization. Also of crucial importance has been the technology that allowed globalization to happen. Last but not least engine of globalization was global market.

Modern globalizing technology in the 20th century (Eastern Telegraph Company)

The economic order of late 20th century offers many opportunities to developing countries and other actors in the global economy. The drastic reductions in barriers to international trade have opened the

door for export-led growth. In fact, for small and medium size economies with limited internal markets, the possibilities for rapid economic growth lie, to a large extent, in production oriented towards international markets. The historical experience of the last three decades shows that countries that have managed to grow at very rapid rates, 7-8% or more per year, have all relied on strong export growth, with exports expanding at a faster rate than GDP. This has been the case of East Asia since the 1960s (up to their current crisis), China, since the mid 1970s, Chile since the mid 1980s and others. Also, "Per capita GDP growth in the post-1980 globalizers accelerated from 1.4 percent a year in the 1960s and 2.9 percent a year in the 1970s to 3.5 percent in the 1980s and 5.0 percent in the 1990s. This acceleration in growth is even more remarkable given that the rich countries saw steady declines in growth from a high of 4.7 percent in the 1960s to 2.2 percent in the 1990s. Also, the nonglobalizing developing countries did much worse than the globalizers, with the former's annual growth rates falling from highs of 3.3 percent during the 1970s to only 1.4 percent during the 1990s. This rapid growth among the globalizers is not simply due to the strong performances of China and India in the 1980s and 1990s18 out of the 24 globalizers experienced increases in growth, many of them quite substantial."

(Gapminder.org)

Globalization creates, through export-led expansion, the potential of rapid overall output growth, increasing national wealth and contributing to improve living standards in developing countries. It is seen as a disciplinary force for governments that undertake unsustainable economic policies. High fiscal deficits and unsound financial policies that lead to inflationary pressures, current account deficits and/or high real interest rates, sooner or latter, tend to be penalized by international investors

and global capital markets. The room for populist and/or unsustainable policies is much narrower in a globalized world. However, the other side of this is that fiscal policy tends to lose its capacity to act as a counter cyclical instrument oriented to maintain full employment. The fact is that international financial markets are very sensitive on the stance of fiscal policy of a country and uses it as an indicator of the degree of macroeconomic responsibility of governments. This, tends to encourage governments to follow persistently austere fiscal policies in order to satisfy financial markets and gain credentials of serious fiscal behavior. In some sense this is fine but it is also important to recognize that it induces governments to undertake pro-cyclical fiscal policies cutting fiscal spending or rising taxes in downturns, amplifying an economic slowdown or a recession with the ensuing loss in employment and real income. The classical role of fiscal policy to maintain a high level of aggregate demand when private investment or private consumption declines is substituted by restrictive fiscal policy oriented to gain credibility and induce a recovery only through a reactivation of private spending.

LATE 20TH CENTURY VERSUS LATE 19TH CENTURY

In the 19th century, the development of new forms of transportation (such as the steamship and railroads) and telecommunications that "compressed" time and space allowed for increasingly rapid rates of global interchange. In the 20th century, road vehicles, intermodal transport, and airlines made transportation even faster. The advent of electronic communications, most notably mobile phones and the Internet, connected billions of people in new ways. The global economy of the late 20th century resembles, in several respects, the pre-1914 liberal economic order in the sense of a more open regime for international trade and foreign direct investment and capital movements. There are, at least, two main differences, however, between late 19th century and late 20th century globalization. First, the degree of capital mobility in both currency markets and in bonds, equity, short-term credit and other financial instruments is of unprecedente nature in history. Second, in early 20th century globalization, there were not global financial institutions aimed at stabilizing the world economy, financing development, setting global rules for international trade in goods and services (the World Trade Organization), and provide a political and diplomatic forum to settle disputes among states and address a host of other global issues (e.g. nuclear proliferation, climatic changes, poverty, etc) such as the United Nations.

(Berg, Andrew G.; Ostry, Jonathan D. (2011). "Equality and Efficiency")

CONCLUSION
There have been some fundamental changes, mostly favourable to sustained integration, since the late 19th century. These changes are political, organisational and technological. The potential for rewarding international exchange has grown correspondingly, as protagonists of globalisation argue.Yet, there has been no linear relationship between these technological developments and global economic integration. On the contrary, despite continued falls in costs of transport and communications in the first half of the 20th century, integration went into reverse, in all respects: trade, the movement of people and the movement of capital all became less free. A new era of globalisation began with the liberalisation of the postwar era and accelerated, while becoming increasingly global, in the 1980s and 1990s. But this did not include the movement of people, to anything like the extent of the late 19th century.

REFERENCES
Jack Weatherford, Genghis Khan and the Making of the Modern World, Crown, 2004 A Global Retreat As Economies Dry Up. The Washington Post. March 5, 2009 http://www.washingtonpost.com/wp-dyn/content/article/2009/03/04/AR2009030404221.html Dollar, David, Kraay, Aart. "Trade, Growth, and Poverty". Finance and Development. International Monetary Fund. Retrieved 6 June 2011 Nicholas Crafts, Globalization and Growth in The Twentieth Century, March 2000 Andrs Solimano, Globalization and National Development at the End of the 20th Century: Tensions and Challenges, June 1999 http://www.wto.org/english/res_e/booksp_e/anrep_e/wtr08-2b_e.pdf Paul Bairoch and Richard Kozul-Wright, Globalization Myths: Some historical reflections on integration, industralization and growth in the world economy, March 1996

Bairoch, Paul. 1989. European Trade Policy, 1815-1914, Bordo, Michael D, Barry Eichengreen and Jongwoo Kim. September 1998. Was there Really an Earlier Period of Inernational Financial Integration Comparable to Todays? National Bureau of Economic Research Working Paper 6738 Bordo, Michael D, Barry Eichengreen and Douglas Irwin. 1999. Is Globalization Today Really Different than Globalization a Hundred Years Ago? National Bureau of Economic Research Working Paper 7195 Berg, Andrew G.; Ostry, Jonathan D. (2011). "Equality and Efficiency" Harley. C. 1980. Transportation, the world wheat trade and the Kuznets cycle, 1850-1913, Explorations in Economic History, 17, pp. 218-250