Globalisation Indices (DP IB Geography)

Measuring Globalisation

What is globalisation?

• Globalisation is the increasing interconnectedness and interdependence of the world's economies, societies and cultures

• Globalisation is nothing new, with people and places having past connections of raw materials and labour exchanges

• However, globalisation today is bigger, more global and developing at a faster rate than in the past

• It is a process driven by improvements in communication and transport which have made it easier for people, goods and information to move across national borders

• There are three main forms of globalisation:

  • Economic

    • Pushed by the growth of transnational corporations (TNCs)

  • Social

    • The influence of ideas, culture, food, art, sport, etc. of one society on another

  • Political

    • The development and influence of international organisations on nation-states

• The degree of globalisation can be measured through how much a country participates in global interactions

KOF Index of Globalisation

• KOF Index (The Swiss Institute for Business Cycle Research) produces an annual Index of Globalisation 

  • First published in 2002, it contains data from 1970

  • Measures the social, economic and political aspects of globalisation

  • Uses a wide range of data, such as participation in UN Peace-keeping missions to TV ownership

  • Countries are scored out of 100 and the higher the number, the more globalised the country is

• Issues with KOF Index

  • This information is only available for 122 countries (2023)

  • Some of the indicators used are now outdated due to improvements in telecommunications

  • There is cultural bias in some of the indicators for example, the number of McDonald's Restaurants

  • Trade indicators ignore the informal economy

  • It does not consider environmental factors

Other Indices

A T Kearney Index

• First published in 2008

• It uses 12 indicators spread across 4 categories:

  • Economic integration

    • Flows of trade and foreign direct investments

  • Connectivity

    • The number of internet users, internet hosts and secure servers the country has

  • Political engagement

    • Membership of international organisations and treaties, contribution to UN peacekeeping, level of governmental transfers, such as aid

  • Personal integration

    • International travel and tourism, international telephone traffic and personal cross-border financial transfers such as remittances

• The index value is calculated for each indicator on a scale of 0 to 1.0 (highest)

Issues with AT Kearney Index

• Only includes 62 countries (2023), although it does include 84% of the world's population and 96% of global GDP

• Dominated by European countries, USA and Canada

• The increased weighting given to connectivity, enables USA to get a high index score despite its low global political engagement in terms of treaties, such as the 2015 Paris Agreement

The New Globalisation Index

• This index is based on finance, trade, politics and social factors

• It is different from other indices, as it also measures the distance of traded goods and how many refugees a country has

  • Countries such as Australia, New Zealand and Argentina would score higher than France and Germany as the distances are greater

  • Jordan and Lebanon would appear more globalised than the UK due to the high numbers of refugees they have taken in

The Ernst and Young Globalisation Index

• Developed by the Economist Intelligence Unit

• It measures the 60 largest economies by its GDP according to their level of globalisation

• It measures:

  • Openness to trade

  • Capital flows

  • Cultural integration

  • Flows of ideas and technology

  • Labour movement