Revision summary
Globalisation opens markets and tightens external rules. Wallerstein’s hierarchy and Prebisch’s trade concern still describe many late developers. Capital flight, TRIPS, and farm subsidies in the North cut policy space. Inequality, informality, and climate costs are domestic faces of the same pressure. Regional and South–South bargains are the usual reply, not autarky.
Model answer
Introduction
Globalisation thickens trade, capital, data, and rules across borders. For developing countries it is opportunity and pressure at once. The challenges are economic, political, and social.
Body
Economic challenges
- Terms of trade and commodity dependence still fit parts of Raul Prebisch’s older UNCTAD warning, even after export growth in East Asia.
- Immanuel Wallerstein’s core–periphery map still describes technology and finance concentrated in a few States.
- Sudden capital flight, as in the 1997 Asian crisis, shows how open accounts can punish late developers.
- WTO rules, TRIPS, and agricultural subsidies in rich States constrain policy space that earlier industrialisers used.
- Joseph Stiglitz stressed that IMF-style conditionality can deepen recessions before growth returns.
Political and social challenges
- Sovereignty is shared with rating agencies, investors, and treaty dispute panels.
- Tax competition, illicit flows, and a digital divide widen inequality inside States.
- Labour informality and weak social security meet import shocks and automation.
- Climate rules and carbon borders add costs that developing States did not create in the same historical share.
Agency that remains
- South–South clubs, BRICS finance, and regional trade pacts are attempts to rewrite, not exit, globalisation.
Flow diagram
flowchart TD G[Globalisation] --> T[Trade and TRIPS] G --> K[Capital volatility] G --> R[Rules of WTO IMF] T --> C[Challenges for South] K --> C R --> C
Conclusion
Developing countries face volatile capital, unequal rules, squeezed policy space, and social inequality under globalisation. The era is not a level market. It is a hierarchy that they must bargain inside.
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Is globalisation only a loss for the South?
No. East Asian export growth and Indian services show gains. The challenge is unequal rules and vulnerability, not autarky as destiny.
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Does the WTO treat all members equally?
One-member-one-vote sits beside bargaining power, special and differential treatment disputes, and Northern subsidy capacity.
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