Aspects of the international system, such as regimes and institutions, have a major impact in the world's political economy and therefore in the structuring of the world's system of production. Regimes also play a significant role in the promotion of global integration, particularly after World War II and the creation of the Bretton Woods system. The post-war economic system was meant to promote free trade and thus contributed significantly to global integration. The creation of the Bretton Woods institutions (the World Bank, the International Monetary Fund - IMF and latter the General Agreement on Trade and Tariffs - GATT) were instrumental to the promotion of financial integration and stability in the post-war period.
Furthermore, the creation of the International Monetary Fund - IMF contributed to ameliorate the balance of payments problems, thus enabling commerce to continue to thrive even in times of recurrent balance of payments imbalances. The World Bank financed, in the 1950s, a large-scale economic reconstruction of Europe and Japan, which contributed to the latter gathering pace of the process of global integration in Europe and in Asia. Spero & Hart mention that the "Bretton Woods system enabled Europe and Japan to recover from the devastation of the war, established a stable monetary system, encouraged more open trade, finance, and investment, and in turn led to a period of rapid economic growth" (Spero & Hart: 4). Global integration also followed from this developments, for economic growth and trade were interdependent in the second half of the 20th century.
The GATT managed to reduce tariffs substantially, in the developed and developing world alike, and this reduction of tariffs was responsible for a large increase in global trade, which gave a new scope to the process of global integration. In a similar fashion, the creation of the economic regime after the demise of the Bretton Woods system also contributed to enabling global integration. The multilateral talks of trade liberalization carried on by the GATT and latter on by its successor institution -the World Trade Organization- were of paramount importance to fostering integration of markets and societies on a global scale. In fact, according to Spero & Hart, the "multilateral trade regime represented by the WTO is the result of a series of efforts, beginning immediately following World War II, to create multilateral institutions to foster an open, liberal trading system" (Spero & Hart: 107).
The successful conclusion of the Uruguay Round was another powerful promoter of global integration. By providing a mechanism of global governance to world trade, albeit with a limited scope, the WTO has functioned as an important fosterer of global integration. The actual wave of globalization owes its success, in large scale, to the existence of the WTO.
In fact, a substantial increase in the flows of goods across the globe has been recorded ever since the great age of Discoveries, in the 16th century. Nevertheless, global integration acquired a new dimension after the fall of the Berlin Wall and the diffusion of the internet. Global integration nowadays is more complex than ever and involves the flows not only of goods, people and money (the factors of production), but also of technology, knowledge, information and other immaterial assets. International regimes and institutions could be rightly regarded as enablers of this kind of more robust integration.
The impacts of states and regions in global integration
Often responsible for carrying out mercantilist or protectionist policies, due to domestic politics, states and regions have often acted as impediments to global integration. Whereas regimes and institution have tended to enable global integration, states and regions have often posed major challenges to its further expansion. Global integration erodes the power of the state and the absolute validity of its underlying concept, sovereignty. States tend, therefore, to resist global integration and its consequent perceived loss of power. According to Spero & Hart, "Tariffs, quotas and nontariff barriers are familiar issues for a broad range of economic groups, from farmers to manufacturers to labor unions to retailers. Because trade policy often determines prosperity or adversity for these groups, it is also the subject of frequent and often highly charged domestic political conflict" (Spero & Hart: 66).
After the debacle of the protectionist policies of the 1930s and its dire consequences, however, the role of the state as an impediment to global integration has been largely reduced. Nowadays, it could be argued that states play a differentiated role in the promotion or impediment of global integration, depending on their overall insertion strategy on the world economy. Thus, the U.S. has been a major promoter of global integration, along Europe and Japan, in the industrial sector, where those countries are highly competitive. In the agriculture sector, however, these countries tend to resist further global integration, for fear of a perceived loss of autonomy.
Developing countries, on the other hand, tend to have a more cautionary approach to global integration, for they fear in global integration a threat to their nascent industries. Largely because of these fears, some states adherents to dependency theory did play a significant role, during the 1970s, in the impediment of further global integration. The positive or negative impact of a given state policy on global integration depends, therefore, on the position of this state in the world stage.
The impacts of international issues in global integration
Transnational issues also play a role in global integration. Although states are, and will remain, the main actors in international politics, they are not the sole protagonists in the international scenario. Organized civil society, Non-governmental organizations and transnational corporations also play an important role as promoters or opponents to global integration. International issues, such as the environment, have offered substantial support for promoters of global integration, for such transnational issues are best dealt with by international organizations rather than by states acting alone. International issues tend, therefore, to act as promoters of global integration, for these issues imply requirements of cooperation which can best be achieved with the promotion of international regimes and institutions. Insofar as international issues are powerful enablers of the creation of international regimes and organizations, such issues are strong promoters of global integration.
- Baylis, J. and Smith, S. The Globalization of World Politics (Oxford: Oxford University Press);
- Dos Santos, Theotonio. (2004) “The Structure of Dependence” in Kaufman, D. J., J. M. Parker, and K. C. Field, eds. Understanding International Relations: The Value of Alternative Lenses, 5 th ed. New York: McGraw–Hill;
- Kaufman, D. J., Parker, J.M., Howel, P.V., Doty, G.R. (1998), Understanding International Relations, The Value of Alternative Lenses (USA: Custom Publishing);
- Naim, Moisés. “Five Wars of Globalization” in Foreign Policy, January/February 2003, 28-37;
- Spero, J. E. and Hart, J. A. (2003), The Politics of International Economic Relations (USA: Thomson Wadsworth).