Globalization, Contemporary Capitalism and Its Challenges for Developing Countries

Abstract

In recent years, globalization has been regarded as the key challenge for nations and states all over the world. Nevertheless there is still much uncertainty and lack of clarity with regard to what globalization stands for and how it affects societies. Consequently, the academic discussion on globalization tends to cover almost the whole field of the social sciences — politics, economics and culture (Held et al. 1999). Even if we limit the discussion to economic globalization, there is only a little less disagreement and confusion over the use of the term (Dicken 1998, p. 4). In practical terms there is, however, considerable agreement among researchers and observers that an increase in ‘worldwide interconnectedness’ (Held et al. 1999, p. 2), including economic interconnectedness, constitutes a core element in the process of globalization.¹ The disputes concern, among other things, the question of whether there has in fact occurred a significant increase in interconnectedness measured in terms of international flows of trade, direct investments and other financial flows.