globalization

Globalization results from the removal of barriers between national economies to encourage the flow of goods, services, capital, and labor.  While the lowering or removal of tariffs and quotas (see General Agreement on Trade and Tariffs, or GATT) that restrict free and open trade among nations has helped globalize the world economy, transportation and communication technologies have had the strongest impact on accelerating the pace of globalization.

Thomas L. Friedman describes the "flattening" of the world economy through globalized trade, outsourcing, supply-chaining and political liberalization.  The use of technologies allows businesses, such as large multi-national corporations, to maintain customers, suppliers and even competitors on a world-wide basis.  The breakdown of businesses into components along its value-chain creates opportunities for multiple businesses located at various spots on the globe to participate in the production of a single good or service.  This global network, even for a single enterprise, is part of globalization.

Several organizations have either been created or have evolved into key roles in the process of globalization.  The World Bank and the International Monetary Fund, for instance, deal primarily with issues of free trade in developing economies and with international monetary policy, including debt and trade balances between dbieloping and industrialized countries.  The World Trade Organization, along with the General Agreement on Trade and Tariffs (GATT), has been involved with removing trade barriers and reducing the cost of trading.