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CIAO DATE: 4/00
Foreign Policy
Globalization: What's New?
What's Not? (And So What?)
Robert O. Keohane and Joseph S. Nye Jr.
This abstract is adapted from an article appearing in the Spring 2000 issue of FOREIGN POLICY magazine.
"Globalization" emerged as a buzzword in the 1990s, just as "interdependence" did in the 1970s, but the phenomena it refers to are not entirely new. Our characterization of interdependence more than 20 years ago applies to globalization today: "This vague phrase expresses a poorly understood but widespread feeling that the very nature of world politics is changing." Like all popular concepts meant to cover a variety of phenomena, both "interdependence" and "globalization" have many meanings. But fundamentally, we have to ask whether they are two words for the same thing, or whether there is something new going on.
Globalization and interdependence are not exactly parallel. Interdependence refers to a condition, a state of affairs; it can increase or decline, depending on circumstances. Globalization, on the other hand, implies that something is increasing. Hence, our definitions start not with globalization but with "globalism," a condition that can increase or decrease.
Globalism is a state of the world involving networks of interdependence at multicontinental distances with linkages occurring through economic and social exchanges. Interdependence, however, refers to situations characterized by reciprocal effects among countries or among actors in different countries. Hence, globalism is a type of interdependence, but it refers to multiple networks of connections (not single linkages) and covers multicontinental distances. Interdependence and globalism are both multidimensional, but they are often defined in economic terms only. However, there are several, equally important forms of globalism: economic, military, environmental, and social and cultural. This division of globalism into separate dimensions is inevitably somewhat arbitrary, but it is still important because changes in each area do not necessarily occur simultaneously.
Today, when people speak colloquially about globalization, they typically make comments such as, "Globalization is fundamentally new." But the issue is not how old globalism is, but rather how "thin" or "thick" it is at any given time. For example, the Silk Road, which provided an economic and cultural link between European and Asian traders, is an example of "thin globalization." The operations of today's global financial markets are an example of "thick globalization." The current thickening of globalism gives rise to three changes not just in degree but in kind: increased density of networks, increased "institutional velocity," and increased transnational participation.
Density of Networks
Economists use the term "network effects" when something becomes more valuable once many people use it-such as the Internet. Joseph Stiglitz, former chief economist of the World Bank, has argued that a knowledge-based economy generates "powerful spillover effects, often spreading like fire and triggering further innovation and setting off chain reactions of new inventions." Moreover, as interdependence and globalism have become thicker, systemic relationships among different networks have become more important. There are more interconnections. Intensive economic interdependence affects social and environmental interdependence; awareness of these connections in turn affects economic relationships. For instance, the expansion of trade can generate industrial activity in countries with low environmental standards, mobilizing environmental activists to carry their message to these newly industrializing but environmentally lax countries. The resulting activities may affect environmental interdependence (for instance, by reducing cross-boundary pollution) but may generate resentment in the newly industrializing countries, affecting social and economic relations.
The point is that the increasing thickness of globalism-the density of networks of interdependence-is not just a difference in degree. Different relationships of interdependence intersect more deeply at more points. As a result, globalism will likely be accompanied by pervasive uncertainty, and there will be efforts by governments, market participants, and others to comprehend and manage these increasingly complex interconnected systems. Globalization, therefore, does not merely affect governance; it is affected by governance.
Institutional Velocity
The information revolution is at the heart of economic and social globalization. It has enabled the transnational organization of work and the expansion of markets. Sometimes these changes are incorrectly viewed in terms of the velocity of information flows. The biggest changes in velocity came with the steamship and especially the telegraph in 1866. Since then, the telephone and the Internet have not increased the velocity of information by much at all. The real difference lies in the reduced cost of communicating, and the effects are therefore felt in the increased intensity rather than the extensity of globalism.
Transnational Participation and Complex Interdependence
We argued 20 years ago that in a world of complex interdependence, politics would be different. Translated into today's language of globalism, the politics of complex interdependence mean that economic, environmental, and social globalism are high and military globalism is low. Since 1989, the decline of military globalism and the extension of social and economic globalism have spread from the former Soviet Union to South America. Yet complex interdependence is far from universal. Military force was used or threatened regularly during the 1990s, and civil wars are endemic in much of sub-Saharan Africa. The information revolution and television have heightened global awareness, but the results are not necessarily conducive to greater harmony.
The dimension of complex interdependence that has changed the most since the 1970s is the vast expansion of channels of contact among societies as the result of decreasing costs. The expansion of such channels highlights the "pluralization" of technology, finance, and information. For example, NGOs can now raise their voices as never before, no matter their size. As a result, issues that were formerly regarded as the prerogatives of national governments are up for grabs internationally. Yet this does not imply the end of politics and power. Even in domains characterized by complex interdependence, politics reflects asymmetrical economic, social, and environmental interdependence among all actors. Complex interdependence is not a description of the world, but rather an ideal concept. It increasingly corresponds to reality in many parts of the world, even at transcontinental distances-and that corresponds more closely than obsolete images of world politics as simply interstate relations that focus solely on force and security.
So what really is new in contemporary globalism? Intensive, or thick, network interconnections that often have unanticipated systemic effects, a change in institutional velocity, the shrinkage of distance brought about by globalization, and the "pluralization" of participation in world politics because of lower communications costs. Although the system of sovereign states is likely to continue as the dominant structure in the world despite these changes, the content of world politics is changing. The surprises of the early 21st century will, no doubt, be profoundly affected by the processes of contemporary globalization that we have tried to analyze here.