Modeling the links between institutional and actual globalization in the countries of the world

The paper is devoted to modeling the links between the institutional and actual level of globalization in the countries of the world. Vector models of error correction, quantile regression, and a stochastic frontier model are considered. As a measure of globalization and its components, the KOF-index of globalization system is used, which allows us to analyze individual globalization processes in the economy, social sphere and politics. According to 2020 data, we determine the dynamic relations between the actual and institutional components of globalization, and the priority of the institutional component for informational and financial globalization is revealed. The example of financial globalization shows the uneven degree of influence of the institutional component on the actual globalization, in particular, its prevailing importance for less globalized countries, indicating the alignment of the degree of internationalization in the global financial system. The degree of effectiveness of the impact of institutional measures, together with the overall level of well-being on the actual financial globalization is analyzed. It is shown that the spread across the countries of the world in the efficiency indicator is almost 70%. Almost 10% of countries have a low efficiency of up to 50%. One third of the countries has average efficiency (50–75%). The share of countries with high efficiency over 75% is about 60%.

Financial globalization and income inequality nexus: panel quantile regression approach

PurposeThe general purpose of the paper is to examine the effect of financial globalization on income inequality. The specific purposes are: 1) To examine the effect of overall financial globalization on income inequality. 2) To analyze whether de facto and de jure financial globalization have differential effects on income inequality. 3) To scrutinize whether the effect of financial globalization on income inequality varies across countries of different income groups and quantiles of income inequality.Design/methodology/approachThe authors employed panel quantile regression using 73 countries over 2000–2016 to examine the effect of financial globalization on income inequality. The authors employed fixed effect and panel quantile regressions and classified the countries into income groups to compare differential effects of financial globalization across different income groups. Further, the authors unbundled financial globalization into de facto and de jure financial globalizations to investigate whether their effects on income inequality vary.FindingsOverall financial globalization raises income inequality more at lower quantiles of inequality. De jure financial globalization reduces income inequality in high-income countries. In high-income countries, de jure financial globalization has more favorable income distribution at lower quantiles of inequality. In contrast, de facto financial globalization raises inequality regardless of income classification of the countries.Originality/valueTo the best of the authors’ knowledge, the authors for the first time employed panel quantile regression to analyze whether financial globalization affects income inequality across different quantiles. In addition to de facto globalization, the authors used the newly developed de jure financial globalization index to examine its impact on income inequality. The de jure dimension is largely neglected in the literature. The authors provide empirical evidence on how the different dimensions of financial globalization, de facto and de jure, impact inequality in high-income, middle-income and low-income countries.

Envisaging global balance-sheet capitalism: The Bank for International Settlements as a collective organic intellectual

This article examines how the Bank for International Settlements, as a collective organic intellectual of finance capital, has sought to maintain the hegemony of financial globalization in the context of an increasingly fractured global order following the 2007–2009 financial crisis. I show how the Bank for International Settlements’ defence of financial globalization has pivoted around the construction of a new ‘economic imaginary’ of global capitalism in which the global financial cycle, which culminates in systemic financial crises, threatens economic and political stability. Asserting that this cycle can be ‘properly managed’, the Bank for International Settlements has advocated a set of formal shifts in macro-policy frameworks. Focusing on the temporality of economic governance as envisioned by the Bank for International Settlements, I highlight two important dimensions of the organization’s discourse: the reduction of policy to process and the fetishization of policy innovation. Here, the pursuit of principles of ‘good’ economic management is prioritized over the achievement of concrete economic or social outcomes. In traversing this economic imaginary, this article offers insights into how global capitalism and its management are envisioned by elites in the current period of hegemonic disorganization and political-economic turmoil.

FINANCIAL GLOBALIZATION AS A MODERN STAGE OF INTERNATIONALIZATION OF THE WORLD ECONOMY

In a constantly developing world, the role of financial globalization is becoming one of the most important for the future prosperity of the entire world economy. This article examines the situation of countries in the international arena by the level of globalization, in order to compare their components. The threats arising in the process of economic globalization are considered. The pros and cons of globalization in the economy are revealed. Based on the conducted research, reasonable conclusions are made. This work covers a whole range of relevant information on this topic.

The Role of Financial Globalization through FDI in Driving Inequality in the Sub-Saharan Region

This paper examines the relationship between globalization and income inequality in Sub-Saharan Africa (SSA). Globalization is here measured using trade variables like the openness rate (TO), financial variables including FDI while income inequality is measured by the GINI coefficient. This was achieved by using data from 26 countries over the period 2005-2014, using the System Generalized Method of Moments (SGMM) estimator to obtain results from the African context. The results suggested that trade openness exerted an equalizing effect while financial globalization through FDI has been the critical factor driving inequality in the SSA since 2005. The results also showed that outside of FDI, corruption contributes greatly to widening inequality by about 3%. The effect of the other control variables was all together insignificant. The prevailing economic status as portrayed following on the back of the 2008 financial crisis has led to an increase in inequalities in SSA countries. These results are robust to the using of the KOF Globalization index. Through this research, governments and policymakers have to introduce robust and appropriate policies and interventions in their drive for economic growth to decisively deal with corruption and so direct FDI to economically sound targeted priority programs.