The effects of globalization on economy and society are highly contested subjects in academic and political arenas. This study brings an empirical perspective to the crucially important arguments that encapsulate the major debates in this area. Using quantitative data, this book addresses the shape and degree of internationalisation by focussing on the impact of Foreign Direct Investment (FDI) and democracy on economic development and the effects of economic internationalisation on democracy. The author examines democracy's effects on economic growth and considers the claim that foreign capital has a detrimental effect on democracy to show that FDI in fact plays a supporting role for democracy and creates higher growth rates than domestic capital. From these results the author suggests that policy makers should seek to encourage globalization by ensuring open access to products from poorer countries, encouraging private investment within poorer countries and that such countries should concentrate on building up human and institutional capital to attract investment.
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AbstractMany argue that free markets drive climate change and harm environmental sustainability. They suggest that democratic controls over profligate capital and unregulated markets better secure economic wellbeing and environmental objectives. Eco‐modernists, contrarily, argue that economic freedoms generate entrepreneurial technological change for reducing poverty and increasing environmental quality since people's demands for cleaner consumption are likely to be met by markets, and free markets are less likely to be affected by rent‐seeking. Moreover, democratic publics also demand higher consumption and the protection of jobs in dirty industry, which would work against environmental causes. This study contrasts the effects of economic freedom and egalitarian democracy on environmental sustainability and atmospheric pollution, assessed as both weak and strong sustainability. The results show that economies that are friendlier to free markets increase physical capital (wealth) with lower damage to total environmental sustainability, measured as depletion of physical, human, and natural capital, including atmospheric pollution. Egalitarian democracy consistently reduces economic sustainability and increases atmospheric pollution. There is some evidence for an inverted‐U shape relationship between egalitarianism and CO2 emissions independently of economic freedom and the level of development. The results are robust to a battery of testing procedures, alternative models and data, different sample sizes, a barrage of relevant diagnostic tests of robustness, and potential endogeneity.
Many argue that free markets drive climate change and harm environmental sustainability. They suggest that democratic controls over profligate capital and unregulated markets better secure economic wellbeing and environmental objectives. Eco-modernists, contrarily, argue that economic freedoms generate entrepreneurial technological change for reducing poverty and increasing environmental quality since people's demands for cleaner consumption are likely to be met by markets, and free markets are less likely to be affected by rent-seeking. Moreover, democratic publics also demand higher consumption and the protection of jobs in dirty industry, which would work against environmental causes. This study contrasts the effects of economic freedom and egalitarian democracy on environmental sustainability and atmospheric pollution, assessed as both weak and strong sustainability. The results show that economies that are friendlier to free markets increase physical capital (wealth) with lower damage to total environmental sustainability, measured as depletion of physical, human, and natural capital, including atmospheric pollution. Egalitarian democracy consistently reduces economic sustainability and increases atmospheric pollution. There is some evidence for an inverted-U shape relationship between egalitarianism and CO2 emissions independently of economic freedom and the level of development. The results are robust to a battery of testing procedures, alternative models and data, different sample sizes, a barrage of relevant diagnostic tests of robustness, and potential endogeneity. ; publishedVersion
Many argue that the twin problems of poverty and environmental degradation are best addressed by adopting greater egalitarian processes of governance. Greater egalitarian societies apparently contain the required social trust and consensus for making hard choices and tradeoffs for achieving environmental gains. We employ novel data on egalitarian democracy, which measure the equal access of the poor to political power and societal resources, and data covering weak and strong sustainability measured by the "adjusted net savings" and several indicators of atmospheric pollution. The results suggest that greater egalitarian governance reduces weak sustainability and increases the intensity of climate-harming pollution. Regardless of democracy, other measures of social equity, such as the GINI and equal access to health and political resources, increase, not decrease, atmospheric pollution. These results are robust to estimating procedure, several alternative models, and data. While liberté, egalité and fraternité should be pursued for their own intrinsic value, meeting urgent challenges from global warming may require more targeted solutions. ; publishedVersion
This article posits that free-market institutions and practices reduce economic distortions that provide rents for underground organizations, which ultimately form criminogenic environments. Rents from market distortions provide 'lootable income' that feeds 'criminal organizations', which rely on violence for enforcement of contracts. Using an index of economic freedom, this study contrasts several relevant measures of political freedoms, political discrimination of individuals and groups, and measures of equal access to state 'goods' as proxies for political legitimacy and discrimination on the homicide rate. Fixed effects regression results suggest robustly that economic freedom, not political legitimacy, inclusive politics, or state capacity, reduces the homicide rate, results that are stubbornly significant and substantively large. The basic results are robust to a barrage of model specifications, different sample sizes, and estimation strategies, including instrumental variables analysis. The evidence suggests that unusually high homicide rates might be based in quotidian organizational activities related to 'illegal' markets rather than to political grievance-based explanations relating to relative deprivation and political legitimacy. Countries wishing to encourage growth-promoting policies need not fear higher levels of interpersonal violence based on various arguments linking free-market policies to societal disarray.
This article posits that free-market institutions and practices reduce economic distortions that provide rents for underground organizations, which ultimately form criminogenic environments. Rents from market distortions provide 'lootable income' that feeds 'criminal organizations', which rely on violence for enforcement of contracts. Using an index of economic freedom, this study contrasts several relevant measures of political freedoms, political discrimination of individuals and groups, and measures of equal access to state 'goods' as proxies for political legitimacy and discrimination on the homicide rate. Fixed effects regression results suggest robustly that economic freedom, not political legitimacy, inclusive politics, or state capacity, reduces the homicide rate, results that are stubbornly significant and substantively large. The basic results are robust to a barrage of model specifications, different sample sizes, and estimation strategies, including instrumental variables analysis. The evidence suggests that unusually high homicide rates might be based in quotidian organizational activities related to 'illegal' markets rather than to political grievance-based explanations relating to relative deprivation and political legitimacy. Countries wishing to encourage growth-promoting policies need not fear higher levels of interpersonal violence based on various arguments linking free-market policies to societal disarray. ; acceptedVersion ; https://creativecommons.org/licenses/by/4.0/This article is distributed under the terms of the Creative Commons Attribution 4.0 License (https://creativecommons.org/licenses/by/4.0/) which permits any use, reproduction and distribution of the work without further permission provided the original work is attributed as specified on the SAGE and Open Access pages (https://us.sagepub.com/en-us/nam/open-access-at-sage).
Abstract Scholars debate the effects of foreign direct investment (FDI) on poor societies. Apparently, FDI could embolden governments to securitize rather than reform, an argument put forth recently by (Kishi, Roudabeh, Maggio, Guiseppe, & Raleigh, Clionadh. (2017). Foreign investment and state conflicts in Africa. Peace Economics, Peace Science and Public Policy, 23(3), https://doi.org/10.1515/peps-2017-0007) who supply evidence within a sample of Sub Saharan African countries showing that FDI increases the number of conflict events. This study takes a critical view of their argument on conceptual and methodological grounds. Using new data for the entire world as well as a sample of developing countries, this study directly tests securitization as militarization measured as military spending and the size of armed forces and finds that several alternative measurements of the stock and flow of FDI reduces militarization, results that are robust to fixed effects estimations, Heckman selection models, and models with and without controls for ongoing armed conflict and interstate tension. Testing an Africa-only sample yields no statistically significant effects either way, but compared to the global sample, an interaction of FDI in Africa does show a positive effect. This result, however, is substantively very slight compared with the net effect of the African region where military spending is unusually greater than in other regions, but size of armed forces are smaller. These results are replicated using a measure of societal security capturing more than just the absence of war as measured by the World Economic Forum's data. If FDI increases security without increasing militarization, then FDI is potentially a sound source of finance for poor countries. Case-study-based research might usefully unpack the political economy of defence spending in Africa and identify precisely how TNCs can be implicated in the story. Our results show, however, that generally, FDI might actually reduce militarization while increasing societal security beyond just the absence of armed violence.
AbstractAre majority-Muslim countries laggards when it comes to developing liberal economic institutions? Using an Index of Economic Freedom and its component parts, this study finds that Muslim-dominant countries (>50% of the population) are positively associated with free-market capitalism. Protestant dominance is also positively correlated, but the association stems from just two components of the index, mainly "legal security and property rights protection." Surprisingly, Protestant countries correlate negatively with "small government" and "freedom to trade," two critical components of free-market capitalism. Muslim dominance shows positive correlations with all areas except for "legal security and property rights." The results are consistent when assessing similar variables measuring property rights and government ownership of the economy collected by the Varieties of Democracy Project. Capitalistic policies and institutions, it seems, may travel across religions more easily than culturalists claim.