assignment of globalisation

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• Prof. Suzanne Berger

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• Political Science

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• Globalization
• International Economics
• Political Economy
• Social Justice

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Assignments.

Please write an essay on one of the two topics below. The essay should be 12-15 pages double-spaced. It is due on Lecture 7 at start of class. No additional reading or research is required beyond the syllabus, class lectures and section discussions.

• Historically, free trade seems to be a rather recent policy. Why were governments more protectionist in the past? Why and when - did states stop providing protection against economic forces coming from outside their borders? Is it that states are less willing - or that they are less able-to provide such protection today? What changed? The essay should consider alternative explanations of the decline of protectionism. It should identify which changes grew out of changes within domestic societies (e.g., in ideas, or interests, or national policies) and which derive from international factors (e.g., “globalization,” new institutions, changes in the relative power of different countries, and so forth). After considering different approaches, lay out and provide evidence for your own conclusion about the most convincing explanation. [Feel free if you wish to take a longer historical perspective and to consider the fall-rise-fall of protectionism from the 19th to the 21st centuries.]
• Who is for free trade and for capital mobility? Who opposes them (one, or the other, or both)? Do the positions on free trade and capital flows of individuals and of social groups depend mainly on their economic interests? Do given economic interests point clearly to support or opposition for lowering the barriers to cross-border flows? Or if some other factors are more important in determining positions on trade and capital markets - what are they? Which “other factors” might matter in explaining support or opposition? Lay out alternative views presented in the readings, and present your own conclusion. Provide evidence (historical or contemporary) from at least two different countries. Whichever position you take, be sure to consider counter-arguments.

Please write an essay on one of the two questions below. The paper should be 12-15 pages double spaced and it is due at the start of the last class.

• How can we evaluate the effects of globalization as against the other processes at work in the world at the same time? Why should we want to be able to sort out the impact of globalization from the impacts of other forces at work-how does this matter? Consider these issues by focusing on one important contemporary social, political, or economic issues. Examples might be inequality, economic growth, unemployment and job creation, development, democracy. Analyze how globalization has affected changes in this area, and in order to be able to specify the role of globalization, lay out carefully the other processes that may be at work. Lay out the argument on all sides, and draw your own conclusion about the significance of globalization for the issue in question. Consider whether changes in public policy (and which changes) might improve outcomes. Use evidence and arguments from readings of the entire semester in developing the arguments. [Note: you may choose some other issue, like culture, environment, or innovation - and examine globalization’s effects. But there’s not enough in the readings to make that possible, so you’d have to do extra reading. For the topics listed above, it is possible to write a good essay without further research.]
• Opponents of globalization argue that it weakens national governments making it difficult or impossible for them to maintain social welfare policies, environmental policies, and other fiscal redistributive measures. Others claim there is little or no evidence of national governments’ decline. Yet other writers seem to think that whatever the effects of globalization on governments, they are likely to be beneficial for long-term economic growth. Please analyze the claims laid out in this controversy, and try to argue the strongest case you can in favor of the view(s) you find most convincing. In doing so be sure to consider seriously the case that might be made against your position, and why you reject it.

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What Is Globalization?

Explore examples of globalization to understand the benefits and challenges of our increasingly interconnected world in this video.

What are the effects of globalization?

We live in an increasingly interconnected and interdependent world. The growing interdependence of the world’s economies, cultures and populations—or "globalization"—touches every part of our lives, from the products we buy to the food we eat to the ways we communicate with one another. Globalization is also tied to some of the other biggest issues we face in the modern era, including climate change , trade , terrorism , and the spread of deadly diseases.

The intertwining of countries and markets all over the world has both benefits and downsides, so policies that support integration have both proponents and detractors. No matter which side you’re on, globalization is simply a reality of modern life; therefore, it’s important to understand how it affects us and the choices we make.

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Globalization: A Resource Guide

Introduction.

• Defining Globalization
• Historical Analysis
• History of International Economics & Trade
• History of International Finance & Global Markets
• Elements of Globalization
• Trends in Globalization
• Globalization and Pandemics
• Organizations & Research Institutions
• Periodicals
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• Using the Library of Congress

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This resource guide is created to help users understand globalization, its history, the elements it comprises, and the current trends. It also provides resources for keeping current with the latest research on the subject for further exploration.

Global integration, driven by technology, transportation, and international cooperation, has resulted in our present-day interconnected world. Increased flow of goods, knowledge and people across borders brought prosperity to many countries, lifting many people out of poverty. Countries benefit from comparative advantage of specializing in what they do best as participants of the global economy by producing more goods at lower prices that lower-income households can afford thus raising their living standards.

Current labor market landscape reflects our deep economic interconnections. While many manufacturing workers lost their jobs to cheaper labor overseas there are a number of industries dependent on migrant workers. Critics of globalization point at the loss of manufacturing jobs as a downside of globalization. Many economists, however, have concluded that overall benefits of globalization outweigh the costs to individual workers or groups and suggest putting in place domestic policies that help workers adapt to the changing job market rather than limiting free trade. This and many other debates on pros and cons of globalization, and current trends are discussed in the resources included in this guide.

Even though the term ‘globalization’ came into more common use in the 1980s, it is not a 20th century phenomenon. This guide offers sources for exploring the history of globalization that can be traced back for centuries.

While our interconnections encompass nearly every aspect of life this guide focuses on the economic aspects of globalization, mainly trade, financial markets, migration and labor markets, and technological progress. We did include resources on the role of globalization in spreading pandemics in light of the devastation the COVID-19 pandemic has caused across the globe both in human lives and economy.

International and research organizations that provide current research on globalization, academic journals and databases included in the guide will help those interested in deeper exploration of the topic. Search the Online Catalog section lists subject headings on globalization and related topics, which allow the user to launch a search for additional materials in the Library of Congress Online Catalog directly from the guide.

Related Guides

U.S. Trade Policy: A Research Guide - This guide provides information on elements of trade policy, policy development process and participants, the effects of trade policies on trade and industry, the place of the U.S. in WTO, and more.

U.S. Trade with China: Selected Resources - This publication provides a brief overview and a selective guide to resources on U.S. trade with China. The resources included address the trade situation between the two countries.

Corporate Social Responsibility (CSR): A Resource Guide - This research guide includes lists of historical resources, current standards, and company/facility information relating to corporate social responsibility.

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Understanding Globalization

• First Online: 30 September 2016

Cite this chapter

• Laura M. Portnoi 2  

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‘Understanding Globalization’ provides a comprehensive overview of the history of globalization and the various ways this contested term has been conceptualized. Portnoi outlines the economic, political, cultural, social, technological, and ecological dimensions of globalization as well as its costs, benefits, and dilemmas. Key areas of debate around globalization include the formation of a world culture, the inevitability of globalization, and the role of nation-states. These debates draw from multiple disciplines, including globalization studies, political science, and education.

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Laura M. Portnoi

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Portnoi, L.M. (2016). Understanding Globalization. In: Policy Borrowing and Reform in Education. Palgrave Macmillan, New York. https://doi.org/10.1057/978-1-137-53024-0_1

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Article contents

Globalization and education.

• Liz Jackson Liz Jackson University of Hong Kong
• https://doi.org/10.1093/acrefore/9780190264093.013.52
• Published online: 26 October 2016

Few would deny that processes of globalization have impacted education around the world in many important ways. Yet the term “globalization” is relatively new, and its meaning or nature, conceptualization, and impact remain essentially contested within the educational research community. There is no global consensus on the exact time period of its occurrence or its most significant shaping processes, from those who focus on its social and cultural framings to those that hold global political-economic systems or transnational social actors as most influential. Intersecting questions also arise regarding whether its influence on human communities and the world should be conceived of as mostly good or mostly bad, which have significant implications for debates regarding the relationship between globalization and education. Competing understandings of globalization also undergird diverse methodologies and perspectives in expanding fields of research into the relationship between education and globalization.

There are many ways to frame the relationship of globalization and education. Scholars often pursue the topic by examining globalization’s perceived impact on education, as in many cases global convergence around educational policies, practices, and values has been observed in the early 21st century. Yet educational borrowing and transferal remains unstraightforward in practice, as educational and cultural differences across social contexts remain, while ultimate ends of education (such as math competencies versus moral cultivation) are essentially contested. Clearly, specificity is important to understand globalization in relation to education. As with globalization generally, globalization in education cannot be merely described as harmful or beneficial, but depends on one’s position, perspective, values, and priorities.

Education and educators’ impacts on globalization also remain a worthwhile focus of exploration in research and theorization. Educators do not merely react to globalization and related processes, but purposefully interact with them, as they prepare their students to respond to challenges and opportunities posed by processes associated with globalization. As cultural and political-economic considerations remain crucial in understanding globalization and education, positionality and research ethics and reflexivity remain important research concerns, to understand globalization not just as homogeneity or oppressive top-down features, but as complex and dynamic local and global intersections of people, ideas, and goods, with unclear impacts in the future.

• globalization
• economic integration
• education borrowing
• global studies in education
• comparative education
• education development

Few would deny that processes of globalization have impacted education around the world in many important ways. Yet the term “globalization” is relatively new, and its meaning or nature, conceptualization, and impact remain essentially contested within the educational research community. Competing understandings of globalization undergird diverse methodologies and perspectives in the expanding web of fields researching the relationship between education and globalization examined below. The area of educational research which exploded at the turn of the 21st century requires a holistic view. Rather than take sides within this contentious field, it is useful to examine major debates and trends, and indicate where readers can learn more about particular specialist areas within the field and other relevant strands of research.

The first part below considers the development of the theorization and conceptualization of globalization and debates about its impact that are relevant to education. The next section examines the relationship between education and globalization as explored by the educational research community. There are many ways to frame the relationship between globalization and education. First explored here is the way that globalization can be seen to impact education, as global processes and practices have been observed to influence many educational systems’ policies and structures; values and ideals; pedagogy; curriculum and assessment; as well as broader conceptualizations of teacher and learner, and the good life. However, there is also a push in the other direction—through global citizenship education, education for sustainable development, and related trends—to understand education and educators as shapers of globalization, so these views are also explored here. The last section highlights relevant research directions.

The Emergence of Globalization(s)

At the broadest level, globalization can be defined as a process or condition of the cultural, political, economic, and technological meeting and mixing of people, ideas, and resources, across local, national, and regional borders, which has been largely perceived to have increased in intensity and scale during the late 20th and early 21st centuries. However, there is no global consensus on the exact time period of its occurrence, or its most significant shaping processes, from social and cultural framings to those that hold global political-economic systems or transnational social actors as most influential. Intersecting questions also arise regarding whether its influence on human communities and the world should be conceived as mostly good or mostly bad, which have clear and significant implications for understanding debates regarding the relationship between globalization and education.

Conceptualizing Globalization

Globalization is a relatively recent concept in scholarly research, becoming popular in public, academic, and educational discourse only in the 1980s. However, many leading scholars of globalization have argued that the major causes or shapers of globalization, particularly the movement and mixing of elements beyond a local or national level, is at least many centuries old; others frame globalization as representing processes inherent to the human experience, within a 5,000–10,000-year time frame. 1 Conceptualizations of globalization have typically highlighted cultural, political-economic, and/or technological aspects of these processes, with different researchers emphasizing and framing the relationships among these different aspects in diverse ways in their theories.

Cultural framings: Emphasizing the cultural rather than economic or political aspects of globalization, Roland Robertson pinpointed the occurrence of globalization as part of the process of modernity in Europe (though clearly similar processes were occurring in many parts of the world), particularly a growing mutual recognition among nationality-based communities. 2 As people began identifying with larger groups, beyond their family, clan, or tribe, “relativization” took place, as people saw others in respective outside communities similarly developing national or national-like identities. 3 Through identifying their own societies as akin to those of outsiders, people began measuring their cultural and political orders according to a broader, international schema, and opening their eyes to transnational inspirations for internal social change.

Upon mutual recognition of nations, kingdoms, and the like as larger communities that do not include all of humanity, “emulation” stemming from comparison of the local to the external was often a next step. 4 While most people and communities resisted, dismissed, or denied the possibility of a global human collectivity, they nonetheless compared their own cultures and lives with those beyond their borders. Many world leaders across Eurasia looked at other “civilizations” with curiosity, and began increasing intercultural and international interactions to benefit from cultural mixing, through trade, translation of knowledge, and more. With emulation and relativization also came a sense of a global standard of values, for goods and resources, and for the behavior and organization of individuals and groups in societies, though ethnocentrism and xenophobia was also often a part of such “global” comparison. 5

Political-economic framings: In political theory and popular understanding, nationalism has been a universalizing discourse in the modern era, wherein individuals around the world have been understood to belong to and identify primarily with largely mutually exclusive national or nation-state “imagined communities.” 6 In this context, appreciation for and extensive investigation of extranational and international politics and globalization were precluded for a long time in part due to the power of nationalistic approaches. However, along with the rise historically of nationalist and patriotic political discourse, theories of cosmopolitanism also emerged. Modern cosmopolitanism as a concept unfolded particularly in the liberalism of Immanuel Kant, who argued for a spirit of “world citizenship” toward “perpetual peace,” wherein people recognize themselves as citizens of the world. 7 Martha Nussbaum locates cosmopolitanism’s roots in the more distant past, however, observing Diogenes the Cynic (ca. 404–323 bce ) in Ancient Greece famously identifying as “a citizen of the world.” 8 This suggests that realization of commonality, common humanity, and the risks of patriotism and nationalism as responses to relativization and emulation have enabled at least a “thin” kind of global consciousness for a very long time, as a precursor to today’s popular awareness of globalization, even if such a global consciousness was in ancient history framed within regional rather than planetary discourse.

In the same way as culturally oriented globalization scholars, those theorizing from an economic and/or political perspective conceive the processes of globalization emerging most substantively in the 15th and 16th centuries, through the development of the capitalist world economic system and the growth of British- and European-based empires holding vast regions of land in Africa, Asia, and the Americas as colonies to enhance trade and consumption within empire capitals. According to Immanuel Wallerstein’s world system theory, which emerged before globalization theory, in the 1970s, the capitalist world economic system is one of the most essential framing elements of the human experience around the world in the modern (or postmodern) era. 9 Interaction across societies primarily for economic purposes, “ not bounded by a unitary political structure,” characterizes the world economy, as well as a capitalist order, which conceives the main purpose of international economic exchange as being the endless generation and accumulation of capital. 10 A kind of global logic was therein introduced, which has expanded around the globe as we now see ourselves as located within an international financial system.

Though some identify world system theory as an alternative or precursor to globalization theories (given Wallerstein’s own writing, which distinguished his view from globalization views 11 ), its focus on a kind of planetary global logic interrelates with globalization theories emerging in the 1980s and 1990s. 12 Additionally, its own force and popularity in public and academic discussions enabled the kind of global consciousness and sense of global interrelation of people which we can regard as major assumptions underpinning the major political-economic theories of globalization and the social imaginary of globalization 13 that came after.

Globalization emerged within common discourse as the process of international economic and political integration and interdependency was seen to deepen and intensify during and after the Cold War era of international relations. At that time, global ideologies were perceived which spanned diverse cultures and nation-states, while global economic and military interdependency became undeniable facts of the human condition. Thus, taking world systems theory as a starting point, global capitalism models have theorized the contemporary economic system, recognizing aspects of world society not well suited to the previously popular nationalistic ways of thinking about international affairs. Leslie Sklair 14 and William Robinson 15 highlighted the transnational layer of capitalistic economic activity, including practices, actors and social classes, and ideologies of international production and trade, elaborated by Robinson as “an emergent transnational state apparatus,” a postnational or extranational ideological, political, and practical system for societies, individuals, and groups to interact in the global space beyond political borders. 16 Globalization is thus basically understood as a process or condition of contemporary human life, at the broadest level, rather than a single event or activity.

Technological framings: In the 1980s and 1990s, the impact of technology on many people’s lives, beliefs, and activities rose tremendously, altering the global political economy by adding an intensity of transnational communication and (financial and information) trading capabilities. Manuel Castells argued that technological advancements forever altered the economy by creating networks of synchronous or near-synchronous communication and trade of information. 17 Anthony Giddens likewise observed globalization’s essence as “time-space distanciation”: “the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa.” 18 As information became present at hand with the widespread use of the Internet, a postindustrial society has also been recognized as a feature of globalization, wherein skills and knowledge to manipulate data and networks become more valuable than producing goods or trading material resources.

Today, globalization is increasingly understood as having interrelating cultural, political-economic, and technological dimensions, and theorists have thus developed conceptualizations and articulations of globalization that work to emphasize the ways that these aspects intersect in human experience. Arjun Appadurai’s conception of global flows frames globalization as taking place as interactive movements or waves of interlinked practices, people, resources, and ideologies: ethnoscapes, mediascapes, technoscapes, finanscapes, and ideoscapes. 19 Ethnoscapes are waves of people moving across cultures and borders, while mediascapes are moving local, national, and international constructions of information and images. Technoscapes enable (and limit) interactions of peoples, cultures, and resources through technology, while finanscapes reflect intersection values and valuations; human, capital, and national resources; and more. Ideoscapes reflect competing, interacting, reconstructing ideologies, cultures, belief systems, and understandings of the world and humanity. Through these interactive processes, people, things, and ideas move and move each other, around the world. 20

Evaluating Globalization

While the explanatory function of Appadurai’s vision of globalization’s intersecting dimensions is highlighted above, many theories of globalization emphasize normative positions in relation to the perceived impact of global and transnational processes and practices on humanity and the planet. Normative views of globalization may be framed as skeptical , globalist , or transformationalist . As Fazal Rizvi and Bob Lingard note, these are ideal types, rather than clearly demarcated practical parties or camps of theorists, though they have become familiar and themselves a part of the social imaginary of globalization (that is, the way globalization is perceived in normative and empirical ways by ordinary people rather than researchers). 21 The positions are also reflected in the many educational discourses relating to globalization, despite their ideological rather than simply empirical content.

Skeptical views: Approaches to globalization in research that are described as skeptical may question or problematize globalization discourse in one of two different ways. The first type of skepticism questions the significance of globalization. The second kind of skepticism tends to embrace the idea of globalization, but regards its impact on people, communities, and/or the planet as negative or risky, overall.

As discussed here, global or international processes are hardly new, while globalization became a buzzword only in the last decades of the 20th century. Thus a first type of skeptic may charge that proponents of globalization or globalization theory are emphasizing the newness of global processes for ulterior motives, as a manner of gaining attention for their work, celebrating that which should instead be seen as problematic capitalist economic relations, for example. Alternatively, some argue that the focus on globalization in research, theorization, and popular discourse fails to recognize the agency of people and communities as actors in the world today, and for this reason should be avoided and replaced by a focus on the “transnational.” As Michael Peter Smith articulates, ordinary individual people, nation-states, and their practices remain important within the so-called global system; a theory of faceless, ahistorical globalization naturalizes global processes and precludes substantive elaboration of how human (and national) actors have played and continue to play primary roles in the world through processes of knowledge and value construction, and through interpersonal and transnational activities. 22

The second strand of globalization skepticism might be referred to as antiglobalist or antiglobalization positions. Thinkers in this vein regard globalization as a mark of our times, but highlight the perceived negative impacts of globalization on people and communities. Culturally, this can include homogenization and loss of indigenous knowledge, and ways of life, or cultural clashes that are seen to arise out of the processes of relativization and emulation in some cases. George Ritzer coined the term “McDonaldization” to refer to the problematic elements of the rise of a so-called global culture. 23 More than simply the proliferation of McDonalds fast-food restaurants around the world, McDonaldization, according to Ritzer, includes a valuation of efficiency over humanity in production and consumption practices, a focus on quantity over quality, and control and technology over creativity and culture. Global culture is seen as a negative by others who conceive it as mainly the product of a naïve cultural elite of international scholars and business people, in contrast with “low-end globalization,” which is the harsher realities faced by the vast majority of people not involved in international finance, diplomacy, or academic research. 24

Alternatively, Benjamin Barber 25 and Samuel Huntington 26 have focused on “Jihad versus McWorld” and the “clash of civilizations,” respectively, as cultures can be seen to mix in negative and unfriendly ways in the context of globalization. Although Francis Fukuyama and other hopeful globalists perceived a globalization of Western liberal democracy at the turn of the 21st century, 27 unforeseen global challenges such as terrorism have fueled popular claims by Barber and Huntington that cultural differences across major “civilizations” (international ideological groupings), particularly of liberal Western civilization and fundamentalist Islam, preclude their peaceful relativization, homogenization, and/or hybridization, and instead function to increase violent interactions of terrorism and war.

Similarly, but moving away from cultural aspects of globalization, Ulrich Beck highlighted risk as essential to understanding globalization, as societies face new problems that may be related to economy or even public health, and as their interdependencies with others deepen and increase. 28 Beck gave the example of Mad Cow disease (bovine spongiform encephalopathy) as one instance where much greater and more broadly distributed risks have been created through global economic and political processes. Skeptical economic theories of globalization likewise highlight how new forms of inequality emerge as global classes and labor markets are created. For instance, Michael Hardt and Antonio Negri argue that a faceless power impersonally oppresses grassroots people despite the so-called productivity of globalization (that is, the growth of capital it enables) from a capitalist economic orientation. 29 It is this faceless but perceived inhumane power that has fueled globalization protests, particularly of the meetings of the World Trade Organization in the 1990s and 2000s, in the United States and Europe.

In light of such concerns, Walden Bello argued for “deglobalization,” a reaction and response by people that aims to fight against globalization and reorient communities to local places and local lifestyles. Bello endorsed a radical shift to a decentralized, pluralistic system of governance from a political-economic perspective. 30 Similarly, Colin Hines argues for localization, reclaiming control over local economies that should become as diverse as possible to rebuild stability within communities. 31 Such ideas have found a broad audience, as movements to “buy local” and “support local workers” have spread around the world rapidly in the 2000s.

Globalist views: Globalists include researchers and advocates who highlight the benefits of globalization to different communities and in various areas of life, often regarding it as necessary or natural. Capitalist theories of globalization regard it as ideal for production and consumption, as greater specialism around the world increases efficiency. 32 The productive power of globalization is also highlighted by Giddens, who sees the potential for global inclusivity and enhanced creative dialogue arising (at least in part) from global processes. 33 In contrast with neoliberal (pro-capitalism) policies, Giddens propagated the mixture of the market and state interventions (socialism and Keynesian economy), and believed that economic policies with socially inclusive ideas would influence social and educational policies and thus promote enhanced social development.

The rise of global culture enhances the means for people to connect with one another to improve life and give it greater meaning, and can increase mutual understanding. As democracy becomes popular around the world as a result of global communication processes, Scott Burchill has argued that universal human rights can be achieved to enhance global freedom in the near future. 34 Joseph Stiglitz likewise envisioned a democratizing globalization that can include developing countries on an equal basis and transform “economic beings” to “human beings” with values of community and social justice. 35 Relatedly, some globalists contend against skeptics that cultural and economic-political or ideological hybridity and “glocalization,” as well as homogenization or cultural clashes, often can and do take place. Under glocalization , understood as local-level globalization processes (rather than top-down intervention), local actors interact dynamically with, and are not merely oppressed by, ideas, products, things, and practices from outside and beyond. Thus, while we can find instances of “Jihad” and “McWorld,” so too can we find Muslims enjoying fast food, Westerners enjoying insights and activities from Muslim and Eastern communities, and a variety of related intercultural dialogues and a dynamic reorganization of cultural and social life harmoniously taking place.

Transformationalist views: Globalization is increasingly seen by educators (among others) around the globe to have both positive and negative impacts on communities and individuals. Thus, most scholars today hold nuanced, middle positions between skepticism and globalism, such as David Held and Anthony McGrew’s transformationalist stance. 36 As Rizvi and Lingard note, globalization processes have material consequences in the world that few would flatly deny, while people increasingly do see themselves as interconnected around the globe, by technology, trade, and more. 37 On the other hand, glocalization is often a mixed blessing, from a comparative standpoint. Global processes do not happen outside of political and economic contexts, and while some people clearly benefit from them, others may not appear to benefit from or desire processes and conditions related to globalization.

Thus, Rizvi and Lingard identify globalization “as an empirical fact that describes the profound shifts that are taking place in the world; as an ideology that masks various expression of power and a range of political interests; and as a social imaginary that expresses the sense people have of their own identity and how it relates to the rest of the world, and … their aspirations and expectations.” 38 Such an understanding of globalization enables its continuous evaluation in terms of dynamic interrelated practices, processes, and ideas, as experienced and engaged with by people and groups within complex transnational webs of organization. Understandings of globalization thus link to education in normative and empirical ways within research. It is to the relationship of globalization to education that we now turn.

Historical Background

Globalization and education are highly interrelated from a historical view. At the most basic level, historical processes that many identify as essential precursors to political-economic globalization during the late modern colonial and imperialist eras influenced the development and rise of mass education. Thus, what we commonly see around the world today as education, mass schooling of children, could be regarded as a first instance of globalization’s impact on education, as in many non-Western contexts traditional education had been conceived as small-scale, local community-based, and as vocational or apprenticeship education, and/or religious training. 39 In much of Africa, Asia, the Middle East, and the indigenous Americas and Australasia, institutionalized formal schools emerged for the first time within colonial or (often intersecting) missionary projects, for local elite youth and children of expatriate officials.

The first educational scholarship with a global character from a historical point of view would thus be research related to colonial educational projects, such as in India, Africa, and East Asia, which served to create elite local communities to serve colonial officials, train local people to work in economic industries benefiting the colony, and for preservation of the status quo. Most today would describe this education as not part of an overall development project belonging to local communities, but as a foreign intervention for global empire maintenance or social control. As postcolonial educational theorists such as Paulo Freire have seen it, this education sought to remove and dismiss local culture as inferior, and deny local community needs for the sake of power consolidation of elites, and it ultimately served as a system of oppression on psychological, cultural, and material levels. 40 It has been associated by diverse cultural theorists within and outside the educational field with the loss of indigenous language and knowledge production, with moral and political inculcation, and with the spread of English as an elite language of communication across the globe. 41

Massification of education in the service of local communities in most developing regions roughly intersected with the period after the Second World War and in the context of national independence movements, wherein nationally based communities reorganized as politically autonomous nation-states (possibly in collaboration with former colonial parties). In 1945 , the United Nations Educational, Scientific and Cultural Organization (UNESCO) emerged, as the United Nations recognized education as critical for future global peace and prosperity, preservation of cultural diversity, and global progress toward stability, economic flourishing, and human rights. UNESCO has advocated for enhancement of quality and access to education around the world through facilitating the transnational distribution of educational resources, establishing (the discourse of) a global human right to education, promoting international transferability of educational and teaching credentials, developing mechanisms for measuring educational achievement across countries and regions, and supporting national and regional scientific and cultural developments. 42 The World Bank, Organisation for Economic Co-operation and Development (OECD), and United Nations Children’s Fund (UNICEF) have engaged in similar work.

Thus, the first modern global educational research was that conducted by bodies affiliated with or housed under UNESCO, such as the International Bureau of Education, the UNESCO Institute for Statistics, and the International Institute of Educational Planning, which are regarded as foundational bodies sponsoring international and comparative research. In research universities, educational borrowing across international borders became one significant topic of research for an emerging field of scholars identified as comparative educational researchers. Comparative education became a major field of educational inquiry in the first half of the 20th century, and expanded in the 1950s and 1960s. 43 Comparative educational research then focused on aiding developing countries’ education and improving domestic education through cross-national examinations of educational models and achievement. Today, comparative education remains one major field among others that focuses on globalization and education, including international education and global studies in education.

Globalization as a contemporary condition or process clearly shapes education around the globe, in terms of policies and values; curriculum and assessment; pedagogy; educational organization and leadership; conceptions of the learner, the teacher, and the good life; and more. Though, following the legacy of the primacy of a nation-state and systems-theory levels of analysis, it is traditionally conceived that educational ideas and changes move from the top, such as from UNESCO and related bodies and leading societies, to the developing world, we find that often glocalization and hybridity, rather than simple borrowing, are taking place. On the other hand, education is also held by scholars and political leaders to be a key to enhancing the modern (or postmodern) human condition, as a symbol of progress of the global human community, realized as global citizenship education, education for sustainable development, and related initiatives. 44 The next subsections consider how globalization processes have been explored in educational research as shapers of education, and how education and educators can also be seen to influence globalization.

Research on Globalization’s Impact on Education

Global and transnational processes and practices have been observed to influence and impact various aspects of contemporary education within many geographical contexts, and thus the fields of research related to education and globalization are vast: they are not contained simply within one field or subfield, but can be seen to cross subdisciplinary borders, in policy studies, curriculum, pedagogy, higher education studies, assessment, and more. As mentioned previously, modern education can itself be seen as one most basic instance of globalization, connected to increased interdependency of communities around the world in economic and political affairs first associated with imperialism and colonialism, and more recently with the capitalist world economy. And as the modern educational system cannot be seen as removed or sealed off from cultural and political-economic processes involved in most conceptualizations of globalization, the impacts of globalization processes upon education are often considered wide-ranging, though many are also controversial.

Major trends: From a functionalist perspective, the globalization of educational systems has been influenced by new demands and desires for educational transferability, of students and educators. In place of dichotomous systems in terms of academic levels and credentialing, curriculum, and assessment, increasing convergence can be observed today, as it is recognized that standardization makes movement of people in education across societies more readily feasible, and that such movement of people can enhance education in a number of ways (to achieve diversity, to increase specialization and the promotion of dedicated research centers, to enhance global employability, and so on). 45 Thus, the mobility and paths of movement of students and academics, for education and better life opportunities, have been a rapidly expanding area of research. A related phenomenon is that of offshore university and school campuses—the mobility of educational institutions to attract and recruit new students (and collect fees), such as New York University in Abu Dhabi and Shanghai. By implication, education is often perceived as becoming more standardized around the globe, though hybridity can also be observed at the micro level.

How economic integration under globalization impacts local educational systems has been traced by Rizvi and Lingard. 46 As they note, from a broad view, the promotion of neoliberal values in the context of financial adjustment and restructuring of poorer countries under trade and debt agreements led by intergovernmental organizations, most notably the OECD, encouraged, first, fiscal discipline in educational funding (particularly impacting the payment of educators in many regions) and, second, the redistribution of funds to areas of education seen as more economically productive, namely primary education, and to efforts at privatization and deregulation of education. While the educational values of countries can and do vary, from democracy and peace, to social justice and equity, and so on, Rizvi and Lingard also observed that social and economic efficiency views have become dominant within governments and their educational policy units. 47 Though human capital theory has always supported the view that individuals gain proportionately according to the investment in their education and training, this view has become globalized in recent decades to emphasize how whole societies can flourish under economic interdependency via enhanced education.

These policy-level perspectives have had serious implications for how knowledge and thus curriculum are increasingly perceived. As mentioned previously, skills for gaining knowledge have taken precedent over knowledge accumulation, with the rise of technology and postindustrial economies. In relation, “lifelong learning,” learning to be adaptive to challenges outside the classroom and not merely to gain academic disciplinary knowledge, has become a focal point for education systems around the globe in the era of globalization. 48 Along with privatization of education, as markets are seen as more efficient than government systems of provision, models of educational choice and educational consumption have become normalized as alternatives to the historical status quo of traditional academic or intellectual, teacher-centered models. Meanwhile, the globalization of educational testing—that is, the use of the same tests across societies around the world—has had a tremendous impact on local pedagogies, assessment, and curricula the world over. Though in each country decision-making structures are not exactly the same, many societies face pressure to focus on math, science, and languages over other subjects, as a result of the primacy of standardized testing to measure and evaluate educational achievement and the effectiveness of educational systems. 49

However, there remains controversy over what education is the best in the context of relativization and emulation of educational practices and students, and therefore the 2010s have seen extraordinary transfers of educational approaches, not just from core societies to peripheral or developing areas, but significant horizontal movements of educational philosophies and practices from West to East and East to West. With the rise of global standardized tests such as the OECD’s Programme for International Student Assessment (PISA), educational discourse in Western societies has increasingly emphasized the need to reorient education to East Asian models (such as Singapore or Shanghai), seen as victors of the tests. 50 On the other hand, many see Finland’s educational system as ideal in relation to its economic integration in society and focus on equity in structure and orientation, and thus educators in the Middle East, East Asia, and the United States have also been seen to consider emulating Finnish education in the 2010s. 51

Evaluations: From a normative point of view, some regard changes to local education in many contexts brought about by globalization as harmful and risky. Freire’s postcolonial view remains salient to those who remain concerned that local languages and indigenous cultural preservation are being sacrificed for elite national and international interests. 52 There can be no doubt that language diversity has been decreasing over time, while indigenous knowledge is being reframed within globalist culture as irrelevant to individual youths’ material needs. 53 Many are additionally skeptical of the sometimes uncritical adoption of educational practices, policies, and discourse from one region of the globe to another. In many countries in Africa and the Middle East, ideas and curricula are borrowed from the United Kingdom, the United States, or Finland in an apparently hasty manner, only to be discarded for the next reform, when it is not found to fit neatly and efficiently within the local educational context (for instance, given local educational values, structures and organizations, and educator and student views). 54 Others argue, in parallel to globalization skeptics, that globalization’s major impact on education has actually been the promotion of a thin layer of aspirational, cosmopolitan values among global cultural elites, who largely overlook the realities, problems, and challenges many face. 55

On the other hand, the case for globalization as a general enhancer of education worldwide has compelling evidence as well. Due to the work of UNESCO, the OECD, and related organizations, educational attainment has become more equitable globally, by nation, race, gender, class, and other markers of social inequality; and educational access has been recognized as positively aligned with personal and national economic improvement, according to quantitative educational researchers. 56 (David Hill, Nigel Greaves, and Alpesh Maisuria argue from a Marxist viewpoint that education in conjunction with global capitalism reinforces rather than decreases inequality and inequity; yet they also note that capitalism can be and often has been successfully regulated to diminish rather than increase inequality generally across countries. 57 ) As education has been effectively conceived as a human right in the era of globalization, societies with historically uneven access to education are on track to systematically enhance educational quality and access.

Changes to the way knowledge and the learner have been conceived, particularly with the rise of ubiquitous technology, are also often regarded as positive overall. People around the world have more access to information than ever before with the mass use of the Internet, and students of all ages can access massive open online courses (MOOCs); dynamic, data-rich online encyclopedias; and communities of like-minded scholars through social networks and forums. 58 In brick-and-mortar classrooms, educators and students are more diverse than ever due to enhanced educational mobility, and both are exposed to a greater variety of ideas and perspectives that can enhance learning for all participants. Credentials can be earned from reputable universities online, with supervision systems organized by leading scholars in global studies in education in many cases. Students have more choices when it comes to learning independently or alongside peers, mentors, or experts, in a range of disciplines, vocations, and fields.

The truth regarding how globalization processes and practices are impacting contemporary education no doubt lies in focusing somewhere in between the promises and the risks, depending on the context in question: the society, the educational level, the particular community, and so on. Particularly with regard to the proposed benefits of interconnectivity and networked ubiquitous knowledge spurred by technology, critics contend that the promise of globalization for enhancing education has been severely overrated. Elites remain most able to utilize online courses and use technologies due to remaining inequalities in material and human resources. 59 At local levels, globalization in education (more typically discussed as internationalization) remains contentious in many societies, as local values, local students and educators, and local educational trends can at times be positioned as at odds with the priorities of globalization, of internationalizing curricula, faculty, and student bodies. As part of the social imaginary of globalization, international diversity can become a buzzword, while cultural differences across communities can result in international students and faculty members becoming ghettoized on campus. 60 International exchanges of youth and educators for global citizenship education can reflect political and economic differences between communities, not merely harmonious interconnection and mutual appreciation. 61 In this context of growing ambivalence, education and educators are seen increasingly as part of the solution to the problems and challenges of the contemporary world that are associated with globalization, as educators can respond to such issues in a proactive rather than a passive way, to ensure globalization’s challenges do not exceed its benefits to individuals and communities.

Education’s Potential Impact on Globalization

As globalization is increasingly regarded with ambivalence in relation to the perceived impact of global and transnational actors and processes on local educational systems, educators are increasingly asked not to respond passively to globalization, through enacting internationalization and global economic agendas or echoing simplistic conceptualizations or evaluations of globalization via their curriculum. Instead, education has been reframed in the global era as something youth needs, not just to accept globalization but to interact with it in a critical and autonomous fashion. Two major trends have occurred in curriculum and pedagogy research, wherein education is identified as an important potential shaper of globalization. These are global citizenship education (also intersecting with what are called 21st-century learning and competencies) and education for sustainable development.

Global citizenship education: Global citizenship education has been conceived by political theorists and educational philosophers as a way to speak back to globalization processes seen as harmful to individuals and communities. As Martha Nussbaum has argued, educators should work to develop in students feelings of compassion, altruism, and empathy that extend beyond national borders. 62 Kathy Hytten has likewise written that students need to learn today as part of global citizenship education not just feelings of sympathy for people around the world, but critical skills to identify root causes of problems that intersect the distinction of local and global, as local problems can be recognized as interconnected with globalization processes. 63 In relation to this, UNESCO and nongovernmental organizations and foundations such as Oxfam and the Asia Society have focused on exploring current practices and elaborating best practices from a global comparative standpoint for the dissemination of noncognitive, affective, “transversal” 21st-century competencies, to extend civic education in the future in the service of social justice and peace, locally and globally. 64

Questions remain in this area in connection with implementation within curriculum and pedagogy. A first question is whether concepts of altruism, empathy, and even harmony, peace, and justice, are translatable, with equivalent meanings across cultural contexts. There is evidence that global citizenship education aimed at educating for values to face the potential harms of globalization is converging around the world on such aims as instilling empathy and compassion, respect and appreciation of diversity, and personal habits or virtues of open-mindedness, curiosity, and creativity. However, what these values, virtues, and dispositions look like, how they are demonstrated, and their appropriate expressions remain divergent as regards Western versus Eastern and African societies (for example). 65 By implication, pedagogical or curriculum borrowing or transferral in this area may be problematic, even if some basic concepts are shared and even when best practices can be established within a cultural context.

Additionally, how these skills, competencies, and dispositions intersect with the cognitive skills and political views of education across societies with different cultures of teaching and learning also remains contentious. In line with the controversies over normative views of globalization, whether the curriculum should echo globalist or skeptical positions remains contested by educators and researchers in the field. Some argue that a focus on feelings can be overrated or even harmful in such education, given the immediacy and evidence of global social justice issues that can be approached rationally and constructively. 66 Thus, token expressions of cultural appreciation can be seen to preclude a deeper engagement with social justice issues if the former becomes a goal in itself. On the other hand, the appropriate focus on the local versus the global, and on the goods versus the harms of globalization, weighs differently across and within societies, from one individual educator to the next. Thus, a lack of evidence of best practices in relation to the contestation over ultimate goals creates ambivalence at the local level among many educators about what and how to teach global citizenship or 21st-century skills, apart from standardized knowledge in math, science, and language.

Education for sustainable development: Education for sustainable development is a second strand of curriculum and pedagogy that speaks back to globalization and that is broadly promoted by UNESCO and related intergovernmental and nongovernmental organizations. Education for sustainable development is, like global citizenship education, rooted in globalization’s impact upon individuals in terms of global consciousness. Like global citizenship, education for sustainable development also emphasizes global interconnection in relation to development and sustainability challenges. It is also a broad umbrella term that reflects an increasingly wide array of practices, policies, and programs, formal and informal, for instilling virtues and knowledge and skills seen to enable effective responses to challenges brought about by globalization. 67 In particular, education for sustainable development has seen global progress, like globalization, as enmeshed in intersecting cultural, social, and economic and political values and priorities. Education for All is an interrelated complementary thread of UNESCO work, which sees access to education as a key to social justice and development, and the improvement of human quality of life broadly. In developed societies, environmental sustainability has come to be seen as a pressing global issue worth curricular focus, as behaviors with regard to consumption of natural resources impact others around the world, as well as future generations. 68

A diversity of practices and views also marks this area of education, resulting in general ambiguity about overall aims and best means. Controversies over which attitudes of sustainability are most important to inculcate, and whether it is important to inculcate them, intertwine with debates over what crises are most pertinent and what skills and competencies students should develop. Measures are in place for standardizing sustainability knowledge in higher education worldwide, as well as for comparing the development of prosustainability attitudes. 69 However, some scholars argue that both emphases miss the point, and that education for sustainable development should first be about changing cultures to become more democratic, creative, and critical, developing interpersonal and prosocial capabilities first, as the challenges of environmental sustainability and global development are highly complex and dynamic. 70 Thus, as globalization remains contested in its impacts, challenges, and promise at local levels, so too does the best education that connects positively with globalization to enhance local and global life. In this rich and diverse field, as processes of convergence and hybridity of glocalization continue to occur, the promise of globalization and the significance of education in relation to it will no doubt remain lively areas of debate in the future, as globalization continues to impact communities in diverse ways.

Research Considerations

There is no shortage of normative and explanatory theories about globalization, each of which points to particular instances and evidence about domains and contexts of globalization. However, when it comes to understanding the interconnections of globalization and education, some consensus regarding best practices for research has emerged. In fields of comparative and international education and global studies in education, scholars are increasingly calling today for theories and empirical investigations that are oriented toward specificity, particularity, and locality, in contrast with the grand theories of globalization elaborated by political scholars. However, a challenge is that such scholarship should not be reduced artificially to one local level in such a way as to exclude understanding of international interactions, in what has been called in the research community “methodological nationalism.” 71 Such reductive localism or nationalism can arise particularly in comparative education research, as nation-states have been traditional units for comparative analysis, but are today recognized as being too diverse from one to the next to be presumed similar (while global processes impact them in disparate ways). 72 Thus, Rizvi has articulated global ethnography as a focused approach to the analysis of international educational projects that traces interconnections and interactions of local and global actors. 73 In comparative educational research, units of analysis must be critically pondered and selected, and it is also possible to make comparisons across levels within one context (for instance, from local educational interactions to higher-level policy-making processes in one society). 74

Qualitative and quantitative analyses can be undertaken to measure global educational achievements, values, policy statements, and more; yet researcher reflexivity and positionality, what is traditionally conceived of as research ethics, is increasingly seen as vital for researchers in this politically and ethically contentious field. Although quantitative research remains important for highlighting convergences in data in global educational studies, such research cannot tell us what we should do, as it does not systematically express peoples’ values and beliefs about the aims of education, or their experiences of globalization, and so on, particularly effectively. On the other hand, normative questions about how people’s values intersect with globalization and related educational processes can give an in-depth view of one location or case, but should be complemented by consideration of generalizable trends. 75

In either case, cultural assumptions can interfere or interact in problematic or unintentional ways with methodologies of data gathering and analysis, for instance, when questions or codes (related to race, ethnicity, or class, for example) are applied across diverse sites by researchers, who may not be very familiar and experienced across divergent cultural contexts. 76 Thus, beyond positionality, the use of collaborative research teams has become popular in global and comparative educational research, to ensure inevitable cultural and related differences across research domains are sufficiently addressed in the research process. 77 In this context, researchers must also contend with the challenges of collaborating across educational settings, as new methods of engaging, saving, and sharing data at distance through technology continue to unfold in response to ongoing challenges with data storage, data security, and privacy.

Among recent strands of educational research fueled by appreciation for globalization is the exploration of the global economy of knowledge. Such research may consider the practices and patterns of movement, collaboration, research production and publication, and authorship of researchers, and examine data from cultural, political, and economic perspectives, asking whose knowledge is regarded as valid and most prized, and what voices dominate in conversations and discourse around globalization and education, such as in classrooms studying global studies in education, or in leading research journals. 78 Related research emerging includes questions such as who produces knowledge, who is the subject of knowledge, and where are data gathered, as recurring historical patterns may appear to be reproduced in contemporary scholarship, wherein those from the global North are more active in investigating and elaborating knowledge in the field, while those from the global South appear most often as subjects of research. As globalization of education entails the globalization of knowledge itself, such inquiries can be directed to various sites and disciplines outside of education, in considering how communication, values, and knowledge are being dynamically revised today on a global scale through processes of globalization.

Research that focuses on globalization and education uses a wide array of approaches and methods, topics, and orientations, as well as diverse theoretical perspectives and normative assumptions. The foregoing sections have explored this general field, major debates, and topics; the relationships have been traced between globalization and education; and there have been brief comments on considerations for research. One key point of the analysis has been that the way globalization is conceived has implications for how its relationship with education is understood. This is important, for as is illustrated here, the ways of conceptualizing globalization are diverse, in terms of how the era of globalization is framed chronologically (as essential to the human condition, to modernity, or as a late 20th-century phenomena), what its chief characteristics are from cultural, political-economic, and technological views, and whether its impact on human life and history is seen as good or bad. A broad consideration of viewpoints has highlighted the emergence of a middle position within research literature: there is most certainly an intertwined meeting and movement of peoples, things, and ideas around the globe; and clearly, processes associated with globalization have good and bad aspects. However, these processes are uneven, and they can be seen to impact different communities in various ways, which are clearly not, on the whole, simply all good or all bad.

That the processes associated with globalization are interrelated with the history and future of education is undeniable. In many ways global convergence around educational policies, practices, and values can be observed in the early 21st century. Yet educational borrowing and transferral remain unstraightforward in practice, as educational and cultural differences across social contexts remain, while the ultimate ends of education (such as math competencies versus moral cultivation) are essentially contested. Thus, specificity is important to understand globalization in relation to education. As with globalization generally, globalization in education cannot be merely described as harmful or beneficial, but depends on one’s position in power relations, and on one’s values and priorities for local and global well-being.

Education and educators’ impact on globalization also remains an important area of research and theorization. Educators are no longer expected merely to react to globalization, they must purposefully interact with it, preparing students around the world to respond to globalization’s challenges. As cultural and political-economic considerations remain crucial in understanding major aspects of both globalization and education, positionality and research ethics and reflexivity remain important research concerns, to understand globalization not just as homogeneity or oppressive top-down features, but as complex and dynamic local, global, and transnational intersections of people, ideas, and goods, with unclear impacts in the future.

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1. W. I. Robinson (2007), Theories of globalization, in G. Ritzer (Ed.), The Blackwell Companion to Globalization (pp. 125–143) (Malden, MA: Blackwell).

2. R. Robertson (1992), Globalization: Social theory and global culture (Thousand Oaks: SAGE, 1992).

3. Robertson, Globalization .

4. Robertson, Globalization.

5. For an historical example of how negative cultural comparison has interconnected with international political relations, see H. Kotef (2015), Little Chinese feet encased in iron shoes: Freedom, movement, gender, and empire in Western political thought, Political Theory, 43 , 334–355.

6. B. Anderson (1983), Imagined communities (London: Verso).

7. Anderson, Imagined communities.

8. M. Nussbaum (1996), For love of country? (Boston: Boston Press).

9. I. Wallerstein (1974), The modern world system (New York: Academic Press).

10. I. Wallerstein (2000), Globalization or the age of transition? International Sociology, 15 , 249–265.

11. Wallerstein, Globalization.

12. Robinson, Theories.

13. F. Rizvi and B. Lingard (2010), Globalizing educational policy (London: Routledge).

14. L. Sklair (2002), Globalization: Capitalism and its alternatives (New York: Oxford University Press).

15. W. I. Robinson (2003), Transnational conflicts: Central America, social change, and globalization (London: Verso)

16. Robinson, Theories.

17. M. Castells (1996), The rise of the network society (Oxford: Blackwell).

18. A. Giddens (1990), The consequences of modernity (Cambridge, U.K.: Polity), 64 ; see also D. Harvey (1990), The condition of post-modernity (London: Blackwell).

19. A. Appadurai (1997), Modernity at large: Cultural dimensions of globalization (Minneapolis: University of Minnesota Press).

20. See also D. Held , A. G. McGrew , D. Goldblatt , and J. Perraton (1999), Global transformations: Politics, economics, and culture (Stanford, CA: Stanford University Press) ; M. Waters (1995), Globalization (London: Routledge).

21. Rizvi and Lingard, Globalizing.

22. M. P. Smith (2001), Transnational urbanism: Locating globalization (Oxford: Blackwell).

23. G. Ritzer (1993), The McDonaldization of society (Boston: Pine Forge).

24. G. Mathews (2011), Ghetto at the center of the world (Hong Kong: Hong Kong University Press).

25. B. Barber (1995), Jihad versus McWorld (New York: Random House).

26. S. Huntington (1993), The clash of civilizations? Foreign Affairs, 72 (3), 22–49.

27. F. Fukuyama (1992), The end of history and the last man (London: Free Press).

28. U. Beck (1992), The risk society: Toward a new modernity (Cambridge, U.K.: Polity).

29. M. Hardt and A. Negri (2000), Empire (Cambridge, MA: Harvard University Press) ; Hardt and Negri (2004), Multitude: War and democracy in the age of empire (New York: Penguin).

30. W. Bello (2004), Deglobalization: Ideas for a new world economy (London: New York University Press) ; Bello (2013), Capitalism’s last stand? Deglobalization in the age of austerity (London: Zed Books).

31. C. Hines (2000), Localization: A global manifesto (New York: Routledge).

32. See D. Harvey (1989), The condition of post-modernity: An enquiry into the conditions of cultural change (Oxford: Blackwell).

33. A. Giddens (1990), The consequences of modernity (Cambridge, U.K.: Polity).

34. S. Burchill (2009), Liberalism, in S. Burchill , A. Linklater , R. Devetak , J. Donnelly , T. Nardin , M. Paterson , C. Reus-Smit , and J. True (Eds.) (pp. 57–85), Theories of international relations (New York: Palgrave Macmillan).

35. See, for instance, J. Stiglitz (2006), Making globalization work (New York: W. W. Norton).

36. D. Held and A. McGrew (Eds.) (2000), The global transformation reader: An introduction to the globalization debate (Cambridge, U.K.: Polity).

37. Rizvi and Lingard, Globalizing.

38. Rizvi and Lingard, Globalizing , 24.

39. T. Reagan (2000), Non-Western educational traditions: Alternative approaches to educational thought (Mahwah, NJ: Lawrence Erlbaum). Of course, scholars such as Michael P. Smith would reject describing these processes as belonging to globalization, as people, nations, and communities played significant roles.

40. P. Freire (1972), Pedagogy of the oppressed (Victoria: Penguin).

41. B. Ashcroft , G. Griffiths , and H. Tiffin (Eds.) (1995), The post-colonial studies reader (London: Routledge).

42. R. E. Wanner (2015), UNESCO’s origins, achievements, problems and promise: An inside/outside perspective from the US (Hong Kong: Comparative Education Research Centre/University of Hong Kong).

43. M. Manzon (2011), Comparative education: The construction of a field (Hong Kong: Comparative Education Research Centre/University of Hong Kong).

44. S. Walby (2009), Globalization and inequalities (London: SAGE).

45. See for instance J. Stier (2004), Taking a critical stance toward internationalization ideologies in higher education: idealism, instrumentalism and educationalism, Globalisation, Societies and Education, 2 , 1–28.

46. Rizvi and Lingard, Globalizing .

47. Rizvi and Lingard, Globalizing .

48. Rizvi and Lingard, Globalizing .

49. Rizvi and Lingard, Globalizing .

50. See for instance M. S. Tucker and L. Darling-Hammond (2011), Surpassing Shanghai: An agenda for American education built on the world’s leading systems (Cambridge, MA: Harvard University Press).

51. See for instance P. Sahlberg (2014), Finnish lessons 2.0: What can the world learn from educational change in Finland? (New York: Teachers College Press).

52. A. Darder (2015), Paulo Freire and the continuing struggle to decolonize education, in M. A Peters and T. Besley (Eds.), Paulo Freire: The global legacy (pp. 55–78) (New York: Peter Lang).

53. S. J. Shin (2009), Bilingualism in schools and society (London: Routledge) ; H. Norberg-Hodge (2009), Ancient futures: Lessons from Ladakh for a globalizing world (San Francisco: Sierra Club).

54. L. Jackson (2015), Challenges to the global concept of student-centered learning with special reference to the United Arab Emirates: “Never Fail a Nahayan,” Educational Philosophy and Theory, 47 , 760–773.

55. T. Besley (2012), Narratives of intercultural and international education: Aspirational values and economic imperatives, in T. Besley and M. A. Peters (Eds.), Interculturalism: Education and dialogue (pp. 87–112) (New York: Peter Lang).

56. W. J. Jacob and D. B. Holsinger (2008), Inequality in education: A critical analysis, in D. B. Holsinger and W. J. Jacob (Eds.), Inequality in education: Comparative and international perspectives (pp. 1–33) (Hong Kong: Comparative Education Research Centre/University of Hong Kong).

57. D. Hill , N. M. Greaves , and A. Maisuria (2008), Does capitalism inevitably increase inequality? in D. B. Holsinger and W. J. Jacob (Eds.), Inequality in education: Comparative and international perspectives (pp. 59–85) (Hong Kong: Comparative Education Research Centre/University of Hong Kong).

58. D. M. West (2013), Digital schools : How technology can transform education (Washington, DC: Brookings Institute Press) ; N. Burbules and T. Callister (2000), Watch IT: The risks and promises of technologies for education (Boulder, CO: Westview).

59. Burbules and Callister, Watch IT.

60. Stier, Critical Stance.

61. See for example, S. K. Gallwey and G. Wilgus (2014), Equitable partnerships for mutual learning or perpetuator of North-South power imbalances? Ireland–South Africa school links, Compare: A Journal of Comparative and International Education, 44 , 522–544.

62. M. C. Nussbaum (2001), Upheavals of thought: The intelligence of emotions (Cambridge, U.K.: Cambridge University Press).

63. K. Hytten (2009), Education for critical democracy and compassionate globalization, in R. Glass (Ed.), Philosophy of Education 2008 (pp. 330–332) (Urbana, IL: Philosophy of Education Society).

64. See for example, Report to the UNESCO of the International Commission on Education for the Twenty-First Century (1996), Learning: The treasure within (Paris: UNESCO) ; Asia Society (2015), A Rosetta Stone for noncognitive skills: Understanding, assessing, and enhancing noncognitive skills in primary and secondary education (New York: Asia Society).

65. See S. Y. Kang (2006), Identity-centered multicultural care theory: White, Black, and Korean caring, Educational Foundations, 20 (3–4), 35–49 ; L. Jackson (2016), Altruism, non-relational caring, and global citizenship education, in M. Moses (Ed.), Philosophy of Education 2014 (Urbana, IL: Philosophy of Education).

66. Jackson, Altruism.

67. L. Jackson (2016), Education for sustainable development: From environmental education to broader view, in E. Railean , G. Walker , A. Elçi , and L. Jackson (Eds.), Handbook of research on applied learning theory and design in modern education (pp. 41–64) (Hershey, PA: IGI Press).

68. Jackson, Education for Sustainable Development.

69. Jackson, Education for Sustainable Development.

70. P. Vare and W. Scott (2007), Learning for change: Exploring the relationship between education and sustainable development, Journal of Education for Sustainable Development, 1 , 191–198.

71. P. Kennedy (2011), Local lives and global transformations: Towards a world society (London: Palgrave).

72. M. Manzon (2015), Comparing places, in M. Bray , B. Adamson , and M. Mason (Eds.), Comparative education research: Approaches and methods (pp. 85–121) (Hong Kong: Comparative Education Research Centre/University of Hong Kong).

73. F. Rizvi (2009), Global mobility and the challenges of educational policy and research, in T. S. Popkewitz and F. Rizvi (Eds.), Globalization and the study of education (pp. 268–289) (Oxford: Blackwell).

74. Manzon, Comparing places.

75. G. P. Fairbrother , Qualitative and quantitative approaches to comparative education, in Bray , Adamson , and Mason (Eds.), Comparative education research (pp. 39–62).

76. L. Jackson (2015), Comparing race, class, and gender, in Bray , Adamson , and Mason (Eds.), Comparative education research (pp. 195–220).

77. M. Bray , B. Adamson , and M. Mason (2015), Different models, different emphases, different insights, in Bray , Adamson , and Mason (Eds.), Comparative education research , 421.

78. See, for instance, H. Tange and S. Miller (2015), Opening the mind? Geographies of knowledge and curricular practices, Higher Education , 1–15.

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Trade and Globalization

How did international trade and globalization change over time? What is the structure today? And what is its impact?

By: Esteban Ortiz-Ospina , Diana Beltekian and Max Roser

This page was first published in 2014 and last revised in April 2024.

On this topic page, you can find data, visualizations, and research on historical and current patterns of international trade, as well as discussions of their origins and effects.

Other research and writing on trade and globalization on Our World in Data:

• Is globalization an engine of economic development?
• Is trade a major driver of income inequality?

Related topics

Economic Growth

See all our data, visualizations, and writing on economic growth.

Economic Inequality

See all our data, visualizations, and writing on economic inequality.

See all our data, visualizations, and writing on migration.

See all interactive charts on Trade and Globalization ↓

Trade has changed the world economy

Trade has grown remarkably over the last century.

One of the most important developments of the last century has been the integration of national economies into a global economic system. This process of integration, often called globalization, has resulted in a remarkable growth in trade between countries.

The chart here shows the growth of world exports over more than the last two centuries. These estimates are in constant prices (i.e. have been adjusted to account for inflation) and are indexed at 1913 values.

The chart shows an extraordinary growth in international trade over the last couple of centuries: Exports today are more than 40 times larger than in 1913.

You can switch to a logarithmic scale under ‘Settings’. This will help you see that, over the long run, growth has roughly followed an exponential path.

The increase in trade has even outpaced economic growth

The chart above shows how much more trade we have today relative to a century ago. But what about trade relative to total economic output?

Over the last couple of centuries the world economy has experienced sustained positive economic growth , so looking at changes in trade relative to GDP offers another interesting perspective.

The next chart plots the value of traded goods relative to GDP (i.e. the value of merchandise trade as a share of global economic output).

Up to 1870, the sum of worldwide exports accounted for less than 10% of global output. Today, the value of exported goods around the world is around 25%. This shows that over the last hundred years, the growth in trade has even outpaced rapid economic growth.

Trade expanded in two waves

The first "wave of globalization" started in the 19th century, the second one after ww2.

The following visualization presents a compilation of available trade estimates, showing the evolution of world exports and imports as a share of global economic output .

This metric (the ratio of total trade, exports plus imports, to global GDP) is known as the “openness index”. The higher the index, the higher the influence of trade transactions on global economic activity. 1

As we can see, until 1800 there was a long period characterized by persistently low international trade – globally the index never exceeded 10% before 1800. This then changed over the course of the 19th century, when technological advances triggered a period of marked growth in world trade – the so-called “first wave of globalization”.

This first wave came to an end with the beginning of World War I, when the decline of liberalism and the rise of nationalism led to a slump in international trade. In the chart we see a large drop in the interwar period.

After World War II trade started growing again. This new – and ongoing – wave of globalization has seen international trade grow faster than ever before. Today the sum of exports and imports across nations amounts to more than 50% of the value of total global output.

Before the first wave of globalization, trade was driven mostly by colonialism

Over the early modern period, transoceanic flows of goods between empires and colonies accounted for an important part of international trade. The following visualizations provide a comparison of intercontinental trade, in per capita terms, for different countries.

As we can see, intercontinental trade was very dynamic, with volumes varying considerably across time and from empire to empire.

Leonor Freire Costa, Nuno Palma, and Jaime Reis, who compiled and published the original data shown here, argue that trade, also in this period, had a substantial positive impact on the economy. 2

The first wave of globalization was marked by the rise and collapse of intra-European trade

The following visualization shows a detailed overview of Western European exports by destination. Figures correspond to export-to-GDP ratios (i.e. the sum of the value of exports from all Western European countries, divided by the total GDP in this region). You can use “Settings” to switch to a relative view and see the proportional contribution of each region to total Western European exports.

This chart shows that growth in Western European trade throughout the 19th century was largely driven by trade within the region: In the period 1830-1900 intra-European exports went from 1% of GDP to 10% of GDP, and this meant that the relative weight of intra-European exports doubled over the period. However, this process of European integration then collapsed sharply in the interwar period.

After the Second World War trade within Europe rebounded, and from the 1990s onwards exceeded the highest levels of the first wave of globalization. In addition, Western Europe then started to increasingly trade with Asia, the Americas, and to a smaller extent Africa and Oceania.

The next graph, using data from Broadberry and O'Rourke (2010) 3 , shows another perspective on the integration of the global economy and plots the evolution of three indicators measuring integration across different markets – specifically goods, labor, and capital markets.

The indicators in this chart are indexed, so they show changes relative to the levels of integration observed in 1900. This gives us another perspective on how quickly global integration collapsed with the two World Wars. 4

The second wave of globalization was enabled by technology

The worldwide expansion of trade after the Second World War was largely possible because of reductions in transaction costs stemming from technological advances, such as the development of commercial civil aviation, the improvement of productivity in the merchant marines, and the democratization of the telephone as the main mode of communication. The visualization shows how, at the global level, costs across these three variables have been going down since 1930.

Reductions in transaction costs impacted not only the volumes of trade but also the types of exchanges that were possible and profitable.

The first wave of globalization was characterized by inter-industry trade. This means that countries exported goods that were very different from what they imported – England exchanged machines for Australian wool and Indian tea. As transaction costs went down, this changed. In the second wave of globalization, we are seeing a rise in intra -industry trade (i.e. the exchange of broadly similar goods and services is becoming more and more common). France, for example, now both imports and exports machines to and from Germany.

The following visualization, from the UN World Development Report (2009) , plots the fraction of total world trade that is accounted for by intra-industry trade, by type of goods. As we can see, intra-industry trade has been going up for primary, intermediate, and final goods.

This pattern of trade is important because the scope for specialization increases if countries are able to exchange intermediate goods (e.g. auto parts) for related final goods (e.g. cars).

Trade and trade partners by country

Above, we examined the broad global trends over the last two centuries. Let's now examine country-level trends over this long and dynamic period.

This chart plots estimates of the value of trade in goods, relative to total economic activity (i.e. export-to-GDP ratios).

These historical estimates obviously come with a large margin of error (in the measurement section below we discuss the data limitations); yet they offer an interesting perspective.

You can edit the countries and regions selected. Each country tells a different story. 6

In the next chart we plot, country by country, the regional breakdown of exports. India is shown by default, but you can edit the countries and regions shown.

When switching to displaying relative values under ‘Settings’, we see the proportional contribution of purchases from each region. For example, we see that more than a third of Indian exports went to Asian countries in recent decades.

This gives us an interesting perspective on the changing nature of trade partnerships. In India, we see the rising importance of trade with Africa—a pattern that we discuss in more detail below .

Trade around the world today

How much do countries trade, trade openness around the world.

The metric trade as a share of GDP gives us an idea of global integration by capturing all incoming and outgoing transactions of a country.

The charts shows that countries differ a lot in the extent to which they engage in trade. Trade, for example, is much less important to the US economy than for other rich countries.

If you press the play button on the map, you can see changes over time. This reveals that, despite the great variation between countries, there is a common trend: over the last couple of decades trade openness has gone up in most countries.

Exports and imports in real dollars

Expressing the value of trade as a share of GDP tells us the importance of trade in relation to the size of economic activity. Let's now take a look at trade in monetary terms – this tells us the importance of trade in absolute, rather than relative terms.

The chart shows the value of exports (goods plus services) in dollars, country by country.

The main takeaway here is that the trend towards more trade is more pronounced than in the charts showing shares of GDP. This is not surprising: most countries today produce more than a couple of decades ago , and at the same time they trade more of what they produce. 7

What do countries trade?

Trade in goods vs. trade in services.

Trade transactions include goods (tangible products that are physically shipped across borders by road, rail, water, or air) and services (intangible commodities, such as tourism, financial services, and legal advice).

Many traded services make merchandise trade easier or cheaper—for example, shipping services, or insurance and financial services.

Trade in goods has been happening for millennia , while trade in services is a relatively recent phenomenon.

In some countries services are today an important driver of trade: in the UK services account for around half of all exports; and in the Bahamas, almost all exports are services.

In other countries, such as Nigeria and Venezuela, services account for a small share of total exports.

Globally, trade in goods accounts for the majority of trade transactions. But as this chart shows, the share of services in total global exports has slightly increased in recent decades. 8

How are trade partnerships changing?

Bilateral trade is becoming increasingly common.

If we consider all pairs of countries that engage in trade around the world, we find that in the majority of cases, there is a bilateral relationship today: most countries that export goods to a country also import goods from the same country.

The interactive visualization shows this. 9 In the chart, all possible country pairs are partitioned into three categories: the top portion represents the fraction of country pairs that do not trade with one another; the middle portion represents those that trade in both directions (they export to one another); and the bottom portion represents those that trade in one direction only (one country imports from, but does not export to, the other country).

As we can see, bilateral trade is becoming increasingly common (the middle portion has grown substantially). However, many countries still do not trade with each other at all.

South-South trade is becoming increasingly important

The next visualization here shows the share of world merchandise trade that corresponds to exchanges between today's rich countries and the rest of the world.

The 'rich countries' in this chart are: Australia, Austria, Belgium, Canada, Cyprus, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Israel, Italy, Japan, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom and the United States. 'Non-rich countries' are all the other countries in the world.

As we can see, up until the Second World War, the majority of trade transactions involved exchanges between this small group of rich countries. But this has changed quickly over the last couple of decades, and today, trade between non-rich countries is just as important as trade between rich countries.

In the past two decades, China has been a key driver of this dynamic: the UN Human Development Report (2013) estimates that between 1992 and 2011, China's trade with Sub-Saharan Africa rose from $1 billion to more than $140 billion. 10

The majority of preferential trade agreements are between emerging economies

The last few decades have not only seen an increase in the volume of international trade, but also an increase in the number of preferential trade agreements through which exchanges take place. A preferential trade agreement is a trade pact that reduces tariffs between the participating countries for certain products.

The visualization here shows the evolution of the cumulative number of preferential trade agreements in force worldwide, according to the World Trade Organization (WTO). These numbers include notified and non-notified preferential agreements (the source reports that only about two-thirds of the agreements currently in force have been notified to the WTO) and are disaggregated by country groups.

This figure shows the increasingly important role of trade between developing countries (South-South trade), vis-a-vis trade between developed and developing countries (North-South trade). In the late 1970s, North-South agreements accounted for more than half of all agreements – in 2010, they accounted for about one-quarter. Today, the majority of preferential trade agreements are between developing economies.

Trading patterns have been changing quickly in middle-income countries

An important change in the composition of exported goods in these countries has accompanied the increase in trade among emerging economies over the last half century.

The next visualization plots the share of food exports in each country's total exported merchandise. These figures, produced by the World Bank, correspond to the Standard International Trade Classification, in which 'food' includes, among other goods, live animals, beverages, tobacco, coffee, oils, and fats.

Two points stand out. First, the relative importance of food exports has substantially decreased in most countries since the 1960s (although globally, it has gone up slightly more recently). Second, this decrease has been largest in middle-income countries, particularly in Latin America.

Regarding levels, as one would expect, in high-income countries, food still accounts for a much smaller share of merchandise exports than in most low- and middle-income-countries.

Trade generates efficiency gains

The raw correlation between trade and growth.

Over the last couple of centuries, the world economy has experienced sustained positive economic growth , and over the same period, this process of economic growth has been accompanied by even faster growth in global trade .

In a similar way, if we look at country-level data from the last half century we find that there is also a correlation between economic growth and trade: countries with higher rates of GDP growth also tend to have higher rates of growth in trade as a share of output. This basic correlation is shown in the chart here, where we plot the average annual change in real GDP per capita, against growth in trade (average annual change in value of exports as a share of GDP). 11

Is this statistical association between economic output and trade causal?

Among the potential growth-enhancing factors that may come from greater global economic integration are: competition (firms that fail to adopt new technologies and cut costs are more likely to fail and be replaced by more dynamic firms); economies of scale (firms that can export to the world face larger demand, and under the right conditions, they can operate at larger scales where the price per unit of product is lower); learning and innovation (firms that trade gain more experience and exposure to develop and adopt technologies and industry standards from foreign competitors). 12

Are these mechanisms supported by the data? Let's take a look at the available empirical evidence.

Evidence from cross-country differences in trade, growth, and productivity

When it comes to academic studies estimating the impact of trade on GDP growth, the most cited paper is Frankel and Romer (1999). 13

In this study, Frankel and Romer used geography as a proxy for trade to estimate the impact of trade on growth. This is a classic example of the so-called instrumental variables approach . The idea is that a country's geography is fixed, and mainly affects national income through trade. So if we observe that a country's distance from other countries is a powerful predictor of economic growth (after accounting for other characteristics), then the conclusion is drawn that it must be because trade has an effect on economic growth. Following this logic, Frankel and Romer find evidence of a strong impact of trade on economic growth.

Other papers have applied the same approach to richer cross-country data, and they have found similar results. A key example is Alcalá and Ciccone (2004). 14

This body of evidence suggests trade is indeed one of the factors driving national average incomes (GDP per capita) and macroeconomic productivity (GDP per worker) over the long run. 15

Evidence from changes in labor productivity at the firm level

If trade is causally linked to economic growth, we would expect that trade liberalization episodes also lead to firms becoming more productive in the medium and even short run. There is evidence suggesting this is often the case.

Pavcnik (2002) examined the effects of liberalized trade on plant productivity in the case of Chile, during the late 1970s and early 1980s. She found a positive impact on firm productivity in the import-competing sector. She also found evidence of aggregate productivity improvements from the reshuffling of resources and output from less to more efficient producers. 16

Bloom, Draca, and Van Reenen (2016) examined the impact of rising Chinese import competition on European firms over the period 1996-2007 and obtained similar results. They found that innovation increased more in those firms most affected by Chinese imports. They also found evidence of efficiency gains through two related channels: innovation increased and new existing technologies were adopted within firms, and aggregate productivity also increased because employment was reallocated towards more technologically advanced firms. 17

Trade does not only increase efficiency gains

Overall, the available evidence suggests that trade liberalization does improve economic efficiency. This evidence comes from different political and economic contexts and includes both micro and macro measures of efficiency.

This result is important because it shows that there are gains from trade. But of course, efficiency is not the only relevant consideration here. As we discuss in a companion article , the efficiency gains from trade are not generally equally shared by everyone. The evidence from the impact of trade on firm productivity confirms this: "reshuffling workers from less to more efficient producers" means closing down some jobs in some places. Because distributional concerns are real it is important to promote public policies – such as unemployment benefits and other safety-net programs – that help redistribute the gains from trade.

Trade has distributional consequences

The conceptual link between trade and household welfare.

When a country opens up to trade, the demand and supply of goods and services in the economy shift. As a consequence, local markets respond, and prices change. This has an impact on households, both as consumers and as wage earners.

The implication is that trade has an impact on everyone. It's not the case that the effects are restricted to workers from industries in the trade sector; or to consumers who buy imported goods. The effects of trade extend to everyone because markets are interlinked, so imports and exports have knock-on effects on all prices in the economy, including those in non-traded sectors.

Economists usually distinguish between "general equilibrium consumption effects" (i.e. changes in consumption that arise from the fact that trade affects the prices of non-traded goods relative to traded goods) and "general equilibrium income effects" (i.e. changes in wages that arise from the fact that trade has an impact on the demand for specific types of workers, who could be employed in both the traded and non-traded sectors).

Considering all these complex interrelations, it's not surprising that economic theories predict that not everyone will benefit from international trade in the same way. The distribution of the gains from trade depends on what different groups of people consume, and which types of jobs they have, or could have. 18

The link between trade, jobs and wages

Evidence from chinese imports and their impact on factory workers in the us.

The most famous study looking at this question is Autor, Dorn and Hanson (2013): "The China syndrome: Local labor market effects of import competition in the United States". 19

In this paper, Autor and coauthors examined how local labor markets changed in the parts of the country most exposed to Chinese competition. They found that rising exposure increased unemployment, lowered labor force participation, and reduced wages. Additionally, they found that claims for unemployment and healthcare benefits also increased in more trade-exposed labor markets.

The visualization here is one of the key charts from their paper. It's a scatter plot of cross-regional exposure to rising imports, against changes in employment. Each dot is a small region (a 'commuting zone' to be precise). The vertical position of the dots represents the percent change in manufacturing employment for the working-age population, and the horizontal position represents the predicted exposure to rising imports (exposure varies across regions depending on the local weight of different industries).

The trend line in this chart shows a negative relationship: more exposure goes along with less employment. There are large deviations from the trend (there are some low-exposure regions with big negative changes in employment); but the paper provides more sophisticated regressions and robustness checks, and finds that this relationship is statistically significant.

This result is important because it shows that the labor market adjustments were large. Many workers and communities were affected over a long period of time. 20

But it's also important to keep in mind that Autor and colleagues are only giving us a partial perspective on the total effect of trade on employment. In particular, comparing changes in employment at the regional level misses the fact that firms operate in multiple regions and industries at the same time. Indeed, Ildikó Magyari found evidence suggesting the Chinese trade shock provided incentives for US firms to diversify and reorganize production. 21

So companies that outsourced jobs to China often ended up closing some lines of business, but at the same time expanded other lines elsewhere in the US. This means that job losses in some regions subsidized new jobs in other parts of the country.

On the whole, Magyari finds that although Chinese imports may have reduced employment within some establishments, these losses were more than offset by gains in employment within the same firms in other places. This is no consolation to people who lost their jobs. But it is necessary to add this perspective to the simplistic story of "trade with China is bad for US workers".

Evidence from the expansion of trade in India and the impact on poverty reductions

Another important paper in this field is Topalova (2010): "Factor immobility and regional impacts of trade liberalization: Evidence on poverty from India". 22

In this paper, Topalova examines the impact of trade liberalization on poverty across different regions in India, using the sudden and extensive change in India's trade policy in 1991. She finds that rural regions that were more exposed to liberalization experienced a slower decline in poverty and lower consumption growth.

Analyzing the mechanisms underlying this effect, Topalova finds that liberalization had a stronger negative impact among the least geographically mobile at the bottom of the income distribution and in places where labor laws deterred workers from reallocating across sectors.

The evidence from India shows that (i) discussions that only look at "winners" in poor countries and "losers" in rich countries miss the point that the gains from trade are unequally distributed within both sets of countries; and (ii) context-specific factors, like worker mobility across sectors and geographic regions, are crucial to understand the impact of trade on incomes.

Evidence from other studies

• Donaldson (2018) uses archival data from colonial India to estimate the impact of India’s vast railroad network. He finds railroads increased trade, and in doing so they increased real incomes (and reduced income volatility). 23
• Porto (2006) looks at the distributional effects of Mercosur on Argentine families, and finds this regional trade agreement led to benefits across the entire income distribution. He finds the effect was progressive: poor households gained more than middle-income households because prior to the reform, trade protection benefitted the rich disproportionately. 24
• Trefler (2004) looks at the Canada-US Free Trade Agreement and finds there was a group who bore "adjustment costs" (displaced workers and struggling plants) and a group who enjoyed "long-run gains" (consumers and efficient plants). 25

The link between trade and the cost of living

The fact that trade negatively affects labor market opportunities for specific groups of people does not necessarily imply that trade has a negative aggregate effect on household welfare. This is because, while trade affects wages and employment, it also affects the prices of consumption goods. So households are affected both as consumers and as wage earners.

Most studies focus on the earnings channel and try to approximate the impact of trade on welfare by looking at how much wages can buy, using as a reference the changing prices of a fixed basket of goods.

This approach is problematic because it fails to consider welfare gains from increased product variety, and obscures complicated distributional issues such as the fact that poor and rich individuals consume different baskets so they benefit differently from changes in relative prices. 26

Ideally, studies looking at the impact of trade on household welfare should rely on fine-grained data on prices, consumption, and earnings. This is the approach followed in Atkin, Faber, and Gonzalez-Navarro (2018): "Retail globalization and household welfare: Evidence from Mexico". 27

Atkin and coauthors use a uniquely rich dataset from Mexico, and find that the arrival of global retail chains led to reductions in the incomes of traditional retail sector workers, but had little impact on average municipality-level incomes or employment; and led to lower costs of living for both rich and poor households.

The chart here shows the estimated distribution of total welfare gains across the household income distribution (the light-gray lines correspond to confidence intervals). These are proportional gains expressed as a percent of initial household income.

As we can see, there is a net positive welfare effect across all income groups; but these improvements in welfare are regressive, in the sense that richer households gain proportionally more (about 7.5 percent gain compared to 5 percent). 28

Evidence from other countries confirms this is not an isolated case – the expenditure channel really seems to be an important and understudied source of household welfare. Giuseppe Berlingieri, Holger Breinlich, Swati Dhingra, for example, investigated the consumer benefits from trade agreements implemented by the EU between 1993 and 2013; and they found that these trade agreements increased the quality of available products, which translated into a cumulative reduction in consumer prices equivalent to savings of €24 billion per year for EU consumers. 29

Implications of trade’s distributional effects

The available evidence shows that, for some groups of people, trade has a negative effect on wages and employment opportunities; at the same time, it has a large positive effect via lower consumer prices and increased product availability.

Two points are worth emphasizing.

For some households, the net effect is positive. But for some households that's not the case. In particular, workers who lose their jobs can be affected for extended periods of time, so the positive effect via lower prices is not enough to compensate them for the reduction in earnings.

On the whole, if we aggregate changes in welfare across households, the net effect is usually positive. But this is hardly a consolation for the worse off.

This highlights a complex reality: There are aggregate gains from trade , but there are also real distributional concerns. Even if trade is not a major driver of income inequalities , it's important to keep in mind that public policies, such as unemployment benefits and other safety-net programs, can and should help redistribute the gains from trade.

Explaining trade patterns: Theory and Evidence

Comparative advantage, theory: what is 'comparative advantage' and why does it matter to understand trade.

In economic theory, the 'economic cost' – or the 'opportunity cost' – of producing a good is the value of everything you need to give up in order to produce that good.

Economic costs include physical inputs (the value of the stuff you use to produce the good), plus forgone opportunities (when you allocate scarce resources to a task, you give up alternative uses of those resources).

A country or a person is said to have a 'comparative advantage' if it can produce something at a lower opportunity cost than its trade partners.

The forgone opportunities of production are key to understanding this concept. It is precisely this that distinguishes absolute advantage from comparative advantage.

To see the difference between comparative and absolute advantage, consider a commercial aviation pilot and a baker. Suppose the pilot is an excellent chef, and she can bake just as well, or even better than the baker. In this case, the pilot has an absolute advantage in both tasks. Yet the baker probably has a comparative advantage in baking, because the opportunity cost of baking is much higher for the pilot.

The freely available economics textbook The Economy: Economics for a Changing World explains this as follows: "A person or country has comparative advantage in the production of a particular good, if the cost of producing an additional unit of that good relative to the cost of producing another good is lower than another person or country’s cost to produce the same two goods."

At the individual level, comparative advantage explains why you might want to delegate tasks to someone else, even if you can do those tasks better and faster than them. This may sound counterintuitive, but it is not: If you are good at many things, it means that investing time in one task has a high opportunity cost, because you are not doing the other amazing things you could be doing with your time and resources. So, at least from an efficiency point of view, you should specialize on what you are best at, and delegate the rest.

The same logic applies to countries. Broadly speaking, the principle of comparative advantage postulates that all nations can gain from trade if each specializes in producing what they are relatively more efficient at producing, and imports the rest: “do what you do best, import the rest”. 30

In countries with a relative abundance of certain factors of production, the theory of comparative advantage predicts that they will export goods that rely heavily upon those factors: a country typically has a comparative advantage in those goods that use its abundant resources. Colombia exports bananas to Europe because it has comparatively abundant tropical weather.

Is there empirical support for comparative-advantage theories of trade?

The empirical evidence suggests that the principle of comparative advantage does help explain trade patterns. Bernhofen and Brown (2004) 31 , for instance, provide evidence using the experience of Japan. Specifically, they exploit Japan’s dramatic nineteenth-century move from a state of near complete isolation to wide trade openness.

The graph here shows the price changes of the key tradable goods after the opening up to trade. It presents a scatter diagram of the net exports in 1869 graphed in relation to the change in prices from 1851–53 to 1869. As we can see, this is consistent with the theory: after opening to trade, the relative prices of major exports such as silk increased (Japan exported what was cheap for them to produce and which was valuable abroad), while the relative price of imports such as sugar declined (they imported what was relatively more difficult for them to produce, but was cheap abroad).

Trade diminishes with distance

The resistance that geography imposes on trade has long been studied in the empirical economics literature – and the main conclusion is that trade intensity is strongly linked to geographic distance.

The visualization, from Eaton and Kortum (2002), graphs 'normalized import shares' against distance. 32 Each dot represents a country pair from a set of 19 OECD countries, and both the vertical and horizontal axes are expressed on logarithmic scales.

The 'normalized import shares' in the vertical axis provide a measure of how much each country imports from different partners (see the paper for details on how this is calculated and normalized), while the distance in the horizontal axis corresponds to the distance between central cities in each country (see the paper and references therein for details on the list of cities). As we can see, there is a strong negative relationship. Trade diminishes with distance. Through econometric modeling, the paper shows that this relationship is not just a correlation driven by other factors: their findings suggest that distance imposes a significant barrier to trade.

The fact that trade diminishes with distance is also corroborated by data on trade intensity within countries. The visualization here shows, through a series of maps, the geographic distribution of French firms that export to France's neighboring countries. The colors reflect the percentage of firms that export to each specific country.

As we can see, the share of firms exporting to each of the corresponding neighbors is the largest close to the border. The authors also show in the paper that this pattern holds for the value of individual-firm exports – trade value decreases with distance to the border.

Institutions

Conducting international trade requires both financial and non-financial institutions to support transactions. Some of these institutions are fairly obvious (e.g. law enforcement); but some are less obvious. For example, the evidence shows that producers in exporting countries often need credit in order to engage in trade.

The scatter plot, from Manova (2013), shows the correlation between levels in private credit (specifically exporters’ private credit as a share of GDP) and exports (average log bilateral exports across destinations and sectors). 34 As can be seen, financially developed economies – those with more dynamic private credit markets – typically outperform exporters with less evolved financial institutions.

Other studies have shown that country-specific institutions, like the knowledge of foreign languages, for instance, are also important to promote foreign relative to domestic trade. 35

Increasing returns to scale

The concept of comparative advantage predicts that if all countries had identical endowments and institutions, there would be little incentive for specialization because the opportunity cost of producing any good would be the same in every country.

So you may wonder: why is it then the case that in the last few years, we have seen such rapid growth in intra-industry trade between rich countries?

The increase in intra-industry between rich countries seems paradoxical under the light of comparative advantage because in recent decades we have seen convergence in key factors, such as human capital , across these countries.

The solution to the paradox is actually not very complicated: Comparative advantage is one, but not the only force driving incentives to specialization and trade.

Several economists, most notably Paul Krugman, have developed theories of trade in which trade is not due to differences between countries, but instead due to "increasing returns to scale" – an economic term used to denote a technology in which producing extra units of a good becomes cheaper if you operate at a larger scale.

The idea is that specialization allows countries to reap greater economies of scale (i.e. to reduce production costs by focusing on producing large quantities of specific products), so trade can be a good idea even if the countries do not differ in endowments, including culture and institutions.

These models of trade, often referred to as “New Trade Theory”, are helpful in explaining why in the last few years we have seen such rapid growth in two-way exchanges of goods within industries between developed nations.

In a much-cited paper, Evenett and Keller (2002) show that both factor endowments and increasing returns help explain production and trade patterns around the world. 36

You can learn more about New Trade Theory, and the empirical support behind it, in Paul Krugman's Nobel lecture .

Measurement and data quality

There are dozens of official sources of data on international trade, and if you compare these different sources, you will find that they do not agree with one another. Even if you focus on what seems to be the same indicator for the same year in the same country, discrepancies are large.

Such differences between sources can also be found in rich countries where statistical agencies tend to follow international reporting guidelines more closely.

There are also large bilateral discrepancies within sources: the value of goods that country A exports to country B can be more than the value of goods that country B imports from country A.

Here we explain how international trade data is collected and processed, and why there are such large discrepancies.

What data is available?

The data hubs from several large international organizations publish and maintain extensive cross-country datasets on international trade. Here's a list of the most important ones:

• World Bank Open Data
• WTO Statistics
• UN Comtrade
• UNCTAD World Integrated Trade Solutions

In addition to these sources, there are also many other academic projects that publish data on international trade. These projects tend to rely on data from one or more of the sources above, and they typically process and merge series in order to improve coverage and consistency. Three important sources are:

• The Correlates of War Project . 37
• The NBER-United Nations Trade Dataset Project .
• The CEPII Bilateral Trade and Gravity Data Project . 38

How large are the discrepancies between sources?

In the visualization here, we compare the data published by several of the sources listed above, country by country, from 1955 to today.

For each country, we exclude trade in services, and we focus only on estimates of the total value of exported goods, expressed as shares of GDP. 39

As this chart clearly shows, different data sources often tell very different stories. If you change the country or region shown you will see that this is true, to varying degrees, across all countries and years.

Constructing this chart was demanding. It required downloading trade data from many different sources, collecting the relevant series, and then standardizing them so that the units of measure and the geographical territories were consistent.

All series, except the two long-run series from CEPII and NBER-UN, were produced from data published by the sources in current US dollars and then converted to GDP shares using a unique source (World Bank).

So, if all series are in the same units (share of national GDP) and they measure the same thing (value of goods exported from one country to the rest of the world), what explains the differences?

Let's dig deeper to understand what's going on.

Why doesn't the data add up?

Differences in guidelines used by countries to record and report trade data.

Broadly speaking, there are two main approaches used to estimate international merchandise trade:

• The first approach relies on estimating trade from customs records , often complementing or correcting figures with data from enterprise surveys and administrative records associated with taxation. The main manual providing guidelines for this approach is the International Merchandise Trade Statistics Manual (IMTS).
• The second approach relies on estimating trade from macroeconomic data , typically National Accounts . The main manual providing guidelines for this approach is the Balance of Payments and International Investment Position Manual (BPM6), which was drafted in parallel with the 2008 System of National Accounts of the United Nations (SNA 2008). The idea behind this approach is to record changes in economic ownership. 40

Under these two approaches, it is common to distinguish between 'traded merchandise' and 'traded goods'. The distinction is often made because goods simply being transported through a country (i.e., goods in transit) are not considered to change a country's stock of material resources and are hence often excluded from the more narrow concept of 'merchandise trade'.

Also, adding to the complexity, countries often rely on measurement protocols developed alongside approaches and concepts that are not perfectly compatible to begin with. In Europe, for example, countries use the 'Compilers guide on European statistics on international trade in goods'.

Measurement error and other inconsistencies

Even when two sources rely on the same broad accounting approach, discrepancies arise because countries fail to adhere perfectly to the protocols.

In theory, for example, the exports of country A to country B should mirror the imports of country B from country A. But in practice this is rarely the case because of differences in valuation. According to the BPM6, imports, and exports should be recorded in the balance of payments accounts on a ' free on board (FOB) basis', which means using prices that include all charges up to placing the goods on board a ship at the port of departure. Yet many countries stick to FOB values only for exports, and use CIF values for imports (CIF stands for 'Cost, Insurance and Freight', and includes the costs of transportation). 41

The chart here gives you an idea of how large import-export asymmetries are. Shown are the differences between the value of goods that each country reports exporting to the US, and the value of goods that the US reports importing from the same countries. For example, for China, the figure in the chart corresponds to the “Value of merchandise imports in the US from China” minus the “Value of merchandise exports from China to the US”.

The differences in the chart here, which are both positive and negative, suggest that there is more going on than differences in FOB vs. CIF values. If all asymmetries were coming from FOB-CIF differences, then we should only see positive values in the chart (recall that, unlike FOB values, CIF values include the cost of transportation, so CIF values are larger).

What else may be going on here?

Another common source of measurement error relates to the inconsistent attribution of trade partners. An example is failure to follow the guidelines on how to treat goods passing through intermediary countries for processing or merchanting purposes. As global production chains become more complex, countries find it increasingly difficult to unambiguously establish the origin and final destination of merchandise, even when rules are established in the manuals. 42

And there are still more potential sources of discrepancies. For example differences in customs and tax regimes, and differences between "general" and "special" trade systems (i.e. differences between statistical territories and actual country borders, which do not often coincide because of things like 'custom free zones'). 43

Even when two sources have identical trade estimates, inconsistencies in published data can arise from differences in exchange rates. If a dataset reports cross-country trade data in US dollars, estimates will vary depending on the exchange rates used. Different exchange rates will lead to conflicting estimates, even if figures in local currency units are consistent.

A checklist for comparing sources

Asymmetries in international trade statistics are large and arise for a variety of reasons. These include conceptual inconsistencies across measurement standards and inconsistencies in the way countries apply agreed-upon protocols. Here's a checklist of issues to keep in mind when comparing sources.

• Differences in underlying records: is trade measured from National Accounts data rather than directly from custom or tax records?
• Differences in import and export valuations: are transactions valued at FOB or CIF prices?
• Inconsistent attribution of trade partners: how is the origin and final destination of merchandise established?
• Difference between 'goods' and 'merchandise': how are re-importing, re-exporting, and intermediary merchanting transactions recorded?
• Exchange rates: how are values converted from local currency units to the currency that allows international comparisons (most often the US-$)?
• Differences between 'general' and 'special' trade system: how is trade recorded for custom-free zones?
• Other issues: Time of recording, confidentiality policies, product classification, deliberate mis-invoicing for illicit purposes.

Many organizations producing trade data have long recognized these factors. Indeed, international organizations often incorporate corrections in an attempt to improve data quality.

The OECD's Balanced International Merchandise Trade Statistics , for example, uses its own approach to correct and reconcile international merchandise trade statistics. 44

The corrections applied in the OECD's 'balanced' series make this the best source for cross-country comparisons. However, this dataset has low coverage across countries, and it only goes back to 2011. This is an important obstacle since the complex adjustments introduced by the OECD imply we can't easily improve coverage by appending data from other sources. At Our World in Data we have chosen to rely on CEPII as the main source for exploring long-run changes in international trade, but we also rely on World Bank and OECD data for up-to-date cross-country comparisons.

There are two key lessons from all of this. The first lesson is that, for most users of trade data out there, there is no obvious way of choosing between sources. And the second lesson is that, because of statistical glitches, researchers and policymakers should always take analyses of trade data with a pinch of salt. For example, in a recent high-profile report , researchers attributed mismatches in bilateral trade data to illicit financial flows through trade mis-invoicing (or trade-based money laundering). As we show here, this interpretation of the data is not appropriate, since mismatches in the data can, and often do arise from measurement inconsistencies rather than malfeasance. 45

Hopefully, the discussion and checklist above can help researchers better interpret and choose between conflicting data sources.

Interactive charts on Trade and Globalization

The openness index, when calculated for the world as a whole, includes double-counting of transactions: When country A sells goods to country B, this shows up in the data both as an import (B imports from A) and as an export (A sells to B).

Indeed, if you compare the chart showing the global trade openness index and the chart showing global merchandise exports as a share of GDP , you find that the former is almost twice as large as the latter.

Why is the global openness index not exactly twice the value reported in the chart plotting global merchandise exports? There a three reasons.

First, the global openness index uses different sources. Second, the global openness index includes trade in goods and services, while merchandise exports include goods but not services. And third, the amount that country A reports exporting to country B does not usually match the amount that B reports importing from A.

We explore this in more detail in our measurement section .

Leonor Freire Costa, Nuno Palma, and Jaime Reis (2015) – The great escape? The contribution of the empire to Portugal's economic growth, 1500–1800 Leonor Freire Costa Nuno Palma Jaime Reis European Review of Economic History, Volume 19, Issue 1, 1 February 2015, Pages 1–22, https://doi.org/10.1093/ereh/heu019

Broadberry and O'Rourke (2010) - The Cambridge Economic History of Modern Europe: Volume 2, 1870 to the Present. Cambridge University Press.

Integration in the goods markets is measured here through the 'trade openness index', which is defined by the sum of exports and imports as a share of GDP. In our interactive chart you can explore trends in trade openness over this period for a selection of European countries.

Broadberry and O'Rourke (2010) - The Cambridge Economic History of Modern Europe: Volume 2, 1870 to the Present. Cambridge University Press. The graph depicts the “evolution of three indicators measuring integration in commodity, labor, and capital markets over the long run. Commodity market integration is measured by computing the ratio of exports to GDP. Labor market integration is measured by dividing the migratory turnover by population. Financial integration is measured using Feldstein–Horioka estimators of current account disconnectedness.”

We also have the same chart but showing imports .

We also have the same chart, but showing imports .

This interactive chart shows trade in services as a share of GDP across countries and regions.

This chart was inspired by a chart from Helpman, E., Melitz, M., & Rubinstein, Y. (2007). Estimating trade flows: Trading partners and trading volumes (No. w12927). National Bureau of Economic Research.

We also have the same data, but as a stacked-area chart .

There are different ways of capturing this correlation. I focus here on all countries with data over the period 1945-2014. You can find a similar chart using different data sources and time periods in Ventura, J. (2005). A global view of economic growth. Handbook of economic growth, 1, 1419-1497. Online here .

The textbook The Economy: Economics for a Changing World explains this in more detail.

Frankel, J. A., & Romer, D. H. (1999). Does trade cause growth? American Economic Review, 89(3), 379-399.

Alcalá, F., & Ciccone, A. (2004). Trade and productivity . The Quarterly Journal of Economics, 119(2), 613-646.

There are many papers that try to answer this specific question with macro data. For an overview of papers and methods see: Durlauf, S. N., Johnson, P. A., & Temple, J. R. (2005). Growth econometrics. Handbook of economic growth, 1, 555-677.

Pavcnik, N. (2002). Trade liberalization, exit, and productivity improvements: Evidence from Chilean plants . The Review of Economic Studies, 69(1), 245-276.

Bloom, N., Draca, M., & Van Reenen, J. (2016). Trade induced technical change? The impact of Chinese imports on innovation, IT and productivity. The Review of Economic Studies, 83(1), 87-117. Available online here .

You can read more about these economic concepts, and the related predictions from economic theory, in Chapter 18 of the textbook The Economy: Economics for a Changing World .

David, H., Dorn, D., & Hanson, G. H. (2013). The China syndrome: Local labor market effects of import competition in the United States . American Economic Review, 103(6), 2121-68.

It's important to mention here that the economist Jonathan Rothwell wrote a paper suggesting these findings are the result of a statistical illusion. Rothwell's critique received some attention from the media , but Autor and coauthors provided a reply , which I think successfully refutes this claim.

Magyari, I. (2017). Firm Reorganization, Chinese Imports, and US Manufacturing Employment . US Census Bureau, Center for Economic Studies.

Topalova, P. (2010). Factor immobility and regional impacts of trade liberalization: Evidence on poverty from India . American Economic Journal: Applied Economics, 2(4), 1-41.

Donaldson, D. (2018). Railroads of the Raj: Estimating the impact of transportation infrastructure . American Economic Review, 108(4-5), 899-934.

Porto, G (2006). Using Survey Data to Assess the Distributional Effects of Trade Policy. Journal of International Economics 70 (2006) 140–160.

Trefler, D. (2004). The long and short of the Canada-US free trade agreement . American Economic Review, 94(4), 870-895.

See: (i) Feenstra, R. C., & Weinstein, D. E. (2017). Globalization, markups, and US welfare . Journal of Political Economy, 125(4), 1040-1074. (ii) Fajgelbaum, P. D., & Khandelwal, A. K. (2016). Measuring the unequal gains from trade . The Quarterly Journal of Economics, 131(3), 1113-1180.

Atkin, David, Benjamin Faber, and Marco Gonzalez-Navarro. "Retail globalization and household welfare: Evidence from Mexico." Journal of Political Economy 126.1 (2018): 1-73.

In the paper, Atkin and coauthors explore the reasons for this and find that the regressive nature of the distribution is mainly due to richer households placing higher weight on the product variety and shopping amenities on offer at these new foreign stores.

Berlingieri, G., Breinlich, H., & Dhingra, S. (2018). The Impact of Trade Agreements on Consumer Welfare—Evidence from the EU Common External Trade Policy. Journal of the European Economic Association.

Nobel laureate Paul Samuelson (1969) was once challenged by the mathematician Stanislaw Ulam: "Name me one proposition in all of the social sciences which is both true and non-trivial." It was several years later than he thought of the correct response: comparative advantage. "That it is logically true need not be argued before a mathematician; that is is not trivial is attested by the thousands of important and intelligent men who have never been able to grasp the doctrine for themselves or to believe it after it was explained to them."

(NB. This is an excerpt from https://www.wto.org/english/res_e/reser_e/cadv_e.htm)

Bernhofen, D., & Brown, J. (2004). A Direct Test of the Theory of Comparative Advantage: The Case of Japan. Journal of Political Economy, 112(1), 48-67. doi:1. Retrieved from http://www.jstor.org/stable/10.1086/379944 doi:1

Eaton, J., & Kortum, S. (2002). Technology, geography, and trade. Econometrica, 70(5), 1741-1779.

Crozet, M., & Koenig, P. (2010). Structural Gravity Equations with Intensive and Extensive Margins. The Canadian Journal of Economics / Revue Canadienne D'Economique, 43(1), 41-62. Retrieved from http://www.jstor.org/stable/40389555

Manova, Kalina. "Credit constraints, heterogeneous firms, and international trade." The Review of Economic Studies 80.2 (2013): 711-744.

Melitz, J. (2008). Language and foreign trade. European Economic Review, 52(4), 667-699.

Evenett, S. J., & Keller, W. (2002). On theories explaining the success of the gravity equation . Journal of Political Economy, 110(2), 281-316.

For more information on how the COW trade datasets were constructed see: (i) Barbieri, Katherine, and Omar M. G. Omar Keshk. 2016. Correlates of War Project Trade Data Set Codebook, Version 4.0. Available at http://correlatesofwar.org and (ii) Barbieri, Katherine, Omar M. G. Keshk, and Brian Pollins. 2009. TRADING DATA: Evaluating our Assumptions and Coding Rules. Conflict Management and Peace Science, 26(5): 471–491.

Further information on CEPII's methodology can be found in their working paper .

The chart includes series labeled by the sources as 'merchandise trade' and 'goods trade'. As we explain below, part of the asymmetries in trade data comes from the fact that, although 'merchandise' and 'goods' are equivalent in the dictionary, these two terms often measure related but different things.

For example, if there is no change in ownership (e.g. a firm exports goods to its factory in another country for processing, and then re-imports the processed goods) the manual says that statistical agencies should only record the net difference in value. You can find more details about this in an OECD Statistics Briefing .

This issue is actually also a source of disagreement between National Accounts data and customs data. You can read more about it in this report: Harrison, Anne (2013) FOB/CIF Issue in Merchandise Trade/Transport of Goods in BPM6 and the 2008 SNA, Twenty-Fifth Meeting of the IMF Committee on Balance of Payments Statistics, Washington, D.C .

Precisely because of the difficulty that arises when trying to establish the origin and final destination of merchandise, some sources distinguish between national and dyadic (i.e. 'directed') trade estimates.

For more details about general and special trade see the Eurostat glossary .

The OECD approach consists of four steps, which they describe as follows: "First, data are collected and organized, and imports are converted to FOB prices to match the valuation of exports. Secondly, data are adjusted for several specific large problems known to drive asymmetries. Presently these include “modular” adjustments for unallocated and confidential trade; for exports by Hong Kong, China; for Swiss non-monetary gold; and for clear-cut cases of product misclassifications. The list of modules is expected to grow over time. In the third step, adjusted data are balanced using a “Symmetry Index” that weights exports and imports. As the final step, the data are also converted to Classification of Products by Activity (CPA) products to better align with National Accounts statistics, such as in national Supply-Use tables." You can read more about it here . In addition to the OECD, other sources also use corrections. The IMF's DOTS dataset, for example, uses a 6 percent rule for converting import valuations (in CIF) into export values (in FOB). More information can be found in the IMF's (2018) working paper on 'New Estimates for Direction of Trade Statistics'.

For more details on this see Forstater, M. (2018) Illicit Financial Flows, Trade Misinvoicing, and Multinational Tax Avoidance: The Same or Different? , CGD Policy Paper 123.

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Globalization: Key Debates, Concepts, and Perspectives

Globalization Synopsis : This article defines globalization, provides some causes for the advancement of globalization, explores the different dimensions of globalization, presents three different perspectives through which the phenomenon has been examined, explores the relation between globalization and identity, and finally examines how globalization is connected to power and politics.

In sociological terms, globalization can be defined as “an ongoing process that involves interconnected changes in the economic, cultural, social, and political spheres of society” (Cole, 2019). The world’s economies, societies, and cultures are becoming more and more interconnected and reliant on one another. The result of such increased connection and interdependence between regions is, therefore, and increase in the influence that the people of these regions have on one another’s lives. The vast and intricate nature of these processes makes globalization a complex event and necessitates its examination. Like all other processes involving large-scale change, globalization also includes certain factors – advances in technology, transportation, and communication being the primary ones. These have made the mobility of goods, people, and ideas across borders easier, faster, and more efficient, thereby driving globalization.

Causes of Globalization

As mentioned before, a number of factors are responsible for globalization. Firstly, technological innovations have played a huge role in the way the process of globalization has made a speedy advance. Over time, mobile phones, the internet, and social media have undergone significant advancements and are now easily accessible to a larger portion of the population. Connecting to others has, therefore, become easier and quicker – we are now able to connect to one part of the world from another and spread any kind of information in a matter of seconds. The second factor responsible for globalization is infrastructural development, particularly when it comes to transport. Traveling by air has become considerably easy and cheap (although still largely unaffordable to the majority), owing mostly to the development of the aviation industry and expansion of international trade routes due to better relations between countries. Due to these technological advancements, people from countries across the globe find mobility easier and faster from one place to another.

Additionally, trade liberalization, which involves reducing or completely removing “restrictions or barriers on the free exchange of goods between nations” (Banton, 2021), has made international trade less costly and more efficient. As a result, a space has been created to foster the establishment and growth of multinational companies and global trade.

With the growing interdependence of economies worldwide, nations are collaborating more closely in pursuit of common objectives like fostering economic growth and development. However, factors of globalization are not limited to economic factors only–several cultural and social changes have also contributed to globalization. As we will discuss in later sections, the rigidity of cultural boundaries has seen significant collapse owing to the increased exchange of people from one country to another and growth of social media and mass culture.

Dimensions of Globalization: Economic, Social, and Cultural

Globalization also has social and cultural dimensions to it. A large part of why the world has become ‘smaller’ and people from different parts have gotten closer is popular culture, which includes music, movies, and fashion. Take for example the movie Parasite, directed bu Bong Joon Ho, which became the first movie in a ‘foreign’ language (i.e., language other than English) to win the Oscar for Best Picture, which is a result of the increased popularity of the Korean culture and entertainment industry across the globe.

Glocalization

Problems in defining globalization.

While it is assumed that there is a consensus about what globalization entails, in reality, the complexities of the phenomenon do not allow for an easy and universal way of defining the phenomenon. Firstly, there remains the problem of assuming that globalization impacts everyone everywhere in the same manner. Along with this is the problem of assuming that globalization impacts everyone in a positive manner. These assumptions do not hold true everywhere around the globe. Globalization has several negative effects on certain communities that do not have easy access to the tools that are necessary in a globalized world, such as the internet. Those without resources such as the internet are essentially left behind in the process of globalization, leading to their marginalization and social exclusion. Therefore, not only does globalization not take place in a homogenous manner all over the world, it also has the potential to negatively impact communities and individuals, which contradicts the positive assumption that one might take while trying to define globalization. Further, there is contradiction among sociologists and other social scientists as to which aspect of globalization out of economic, social, and cultural need to be prioritized.

Perspectives on Globalization

Karl Marx wrote extensively about the relationship between capitalism and globalization. In one of his most renowned works, The Communist Manifesto, Marx argued that capitalism’s inherent need for expansion–finding new sources for raw materials and labour and creating new markets for products–would eventually lead to the globalization. According to Marx, the “need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere” (Marx & Engels, 1848, p.16). For Marx, globalization also meant the exacerbated exploitation of workers by capitalists and, on a global scale, the uneven distribution of the way in which capitalist economies develop, with some countries becoming more wealthy and powerful at the expense of others. In brief, according to the Marxist view, globalization is advantageous for the capitalist class as it opens up new markets for their goods, fresh sources of labor and raw materials, and fresh prospects for earning profits. It also worsens certain issues of socio-economic concern, such as exploitation and inequalities, within and between countries around the world.

It is important that “economic globalization must (also) be understood in terms of the effects it has had on women, who make up a disproportionate percentage of the global poor” (Parekh & Wilcox, 2014). According to feminist scholars, men have disproportionately benefited from globalization while women have been exploited and subjugated. For instance, when it comes to the division of labor, industries that heavily rely on the cheaply available female labor in developing countries have been augmented by globalization, therefore leading to the exploitation of female workers and their marginalization. However, industries that require higher levels of skill and also provide higher wages, such as technology, keep growing due to globalization. Such industries are primarily male-dominated and therefore disproportionately benefit male workers in economies.

Postmodernist Perspective

Globalization and Identity

Globalization has had a significant impact on identity. It challenges traditional forms of identity based on nation-states, cultures, and religions and creates new opportunities for cultural exchange, hybridity, and fluidity. Identity, in a lot of different ways, has become more flexible and diverse.

Globalization has had both converging and diverging effects on cultures around the world. Convergence of culture has mostly been in terms of the West. Western values of culture, such as individualism and consumerism, has seen a significant increase, and due to its overpowering nature owing to a history of global colonialism, it has led to a homogenization of culture across the globe. In simple terms, it means that the diverse cultural patterns have given way to a considerably homogenous one lacking variations in beliefs and practices, especially when it comes to consumption. An example of this can be the hegemonic acceptance of English as the ‘official’ language for most countries of the world, including those for whom English is not the native language.

However, mostly as a result of such cultural homogenization and convergence, globalization has also revived an interest in local cultures and traditions among people who identify cultural convergence as a threat to their unique cultural identities. Cultural divergence has been the obvious outcome of such a critical view of globalization, with people striving to maintain their unique cultural practices.

Globalization, Western Ideology and Identity, and the Concept of Westernization

According to The Editors of Encyclopedia Britannica (2019), Westernization can be defined as “the adoption of the practices and culture of western Europe by societies and countries in other parts of the world, whether through compulsion or influence.” Western ideas are known to have had a huge impact on the rest of the world, regardless of whether they have been forced onto other countries or willingly accepted by them. Further, Western nations are often considered the ‘ideal’ models of so-called ‘modernity’ and ‘progress’ of human civilization. Globalization has facilitated the adoption of Western ideology throughout the rest of the world, leading to homogenization of culture across domains such as politics, economics, education, and media. This trend has sparked concerns that distinct cultural identities are being eroded as local traditions and practices are supplanted by more universalized norms. Scholars such as Kaul (2012) have emphasized the potential impact of this homogenization on the richness and diversity of human cultures, and urge us to consider the broader implications of globalization on cultural identity.

Identity is a complex thing, and globalization has only made it more complicated. It has created both new opportunities and challenges in terms of cultures, traditions, and shared experiences. Western ideology has influenced the way people view themselves, with western values and practices being seen as aspirational and desirable. The adoption of western values and practices has also created new forms of identity, including transnational and cosmopolitan identities, which transcend national and cultural boundaries. However, the adoption of western values and practices can also lead to cultural hybridization, where traditional practices are blended with western ones, challenging the notion of western cultural hegemony. Identity crisis, which has become a catchphrase, is most common in non-Western countries. For instance, Doku and Asante (2011) state that “globalization increases the proportion of young people in non- Western cultures who experience a state of identity confusion rather than successfully forming an identity.”

Ethnic Revitalization

An important phenomenon in relation to globalization, ethnic revitalization is the process by which ethnic groups that are considered minority respond to the threats to their socio-cultural identity that they face due to globalization and the resultant homogenization of cultures. It is a process of renewal of their cultural identity and fighting back the aspects of globalization that lead to destruction of their local cultures and traditions. It is through ethnic revitalization that communities, groups, and cultures that have been relegated to ‘minorities’ resist the negative effects of globalization. For example, the Māori culture, which was suppressed due to centuries of colonial rule, is under the process of being revived or revitalized in New Zealand rapid spread and increasing popularity of te reo Māori , or the Māori language, through development of classes and lessons dedicated towards the language (Roy, 2018).

Cultural Defense

According to Kim (1997), cultural defense is a “a legal strategy that uses evidence about a defendant’s cultural background to negate or to mitigate criminal liability (with a concomitant sentence reduction)” (p. 102-103). In other words, the usage of cultural defense necessitates that individuals should not be held accountable for certain actions or behaviors if they are consistent with their cultural beliefs and practices. In the context of globalization, cultural defense can be seen as a way in which individuals resist homogenization of legal instruments by putting forward their particular cultural context into consideration. However, such a ‘benefit’ of cultural defense also means that acts of crime, such as violence, assault, murder, and sexual offenses, are defended for by using this concept. In the context of globalization, by citing a ‘loss of culture’ or ‘harm to cultural beliefs’, cultural defense can potentially be used to justify actions that violate basic human rights or harm others. Broeck (2001) gives an example of a case in Netherlands where an act of throwing flowers into a river by a Hindu person was considered a crime because Dutch law mandates pollution of waterbodies to be a criminal offense, but for the Hindu, it was simply part of a religious ritual. Such an act can easily be defended on cultural grounds.

Hybrid Identities

Globalization, power, and politics, the spread of liberal democracy and human rights.

 Globalization has led to the spread of liberal democracy and human rights.  According to Dalpino (2001), one of “the most tangible evidence of globalization’s impact on democratization has been the infusion of democratic norms, and the principles of human rights that support them, into many international and regional institutions.” A complex interplay of power, politics, and cultural values has been central to this. Citizens have increasingly demanded for more political freedom and accountability from the government. Governments also face pressure for the same from international organizations – the UN, for instance – and other governments. These can and have led to changes in the way governments work around the world. International organizations and advocates have worked to promote human rights norms and standards. Unequal power dynamics among countries can, however, hinder progress. More powerful countries can marginalize and exploit less powerful countries.

Power and Politics

In terms of power and politics, globalization has had a significant impact on the power bestowed upon nation-states (Jotia, 2011). Traditional power structures have been questioned and dismantled, making way for newer forms of power to emerge. According to Jotia (2011), the globalization of trade, finance, and technology has created new opportunities for corporations and wealthy individuals to accumulate wealth and power on a global scale, often at the expense of national governments and local communities, such that “the nation-states’ sovereignty remains in limbo as power steadily shifts to the most powerful financial and corporate institutions” (p. 246).

Globalization and Social Movements

Banton, C. (2021, March 24). Trade liberalization: Definition, how it works, and example . Investopedia. https://www.investopedia.com/terms/t/trade-liberalization.asp#:~:text=What%20Is%20Trade%20Liberalization%3F

Dalpino, C. E. (2001, September). Does globalization promote democracy?: An early assessment . Brookings; Brookings. https://www.brookings.edu/articles/does-globalization-promote-democracy-an-early-assessment/

Doku, P., & Asante, K. (2011). Identity: Globalization, culture and psychological functioning . https://core.ac.uk/download/pdf/268072584.pdf

Kaul, V. (2012). Globalisation and crisis of cultural identity. Journal of Research in International Business and Management , 2 (13), 341–349. https://www.interesjournals.org/articles/globalisation-and-crisis-of-cultural-identity.pdf

Kim, N. (1997). The cultural defense and the problem of cultural preemption: A framework for analysis. N.M. L. Rev , 27 (1). https://core.ac.uk/download/pdf/151604531.pdf

McKane, R. (2014). The globalization of social movements: Exploring the transnational paradigm through collection action against neoliberalism from Latin America to the Occupy movement. Pursuit – the Journal of Undergraduate Research at the University of Tennessee , 5 (1). https://trace.tennessee.edu/pursuit/vol5/iss1/11

Parekh, S., & Wilcox, S. (2014). Feminist perspectives on globalization. In Stanford Encyclopedia of Philosophy . https://plato.stanford.edu/entries/feminism-globalization /

Soumili is currently pursuing her studies in Social Sciences at Tata Institute of Social Sciences, focusing on core subjects such as Sociology, Psychology, and Economics. She possesses a deep passion for exploring various cultures, traditions, and languages, demonstrating a particular fascination with scholarship related to intersectional feminism and environmentalism, gender and sexuality, as well as clinical psychology and counseling. In addition to her academic pursuits, her interests extend to reading, fine arts, and engaging in volunteer work.

• IT applications, infrastructure and operations

globalization

• Cameron Hashemi-Pour, Site Editor
• Ben Lutkevich, Site Editor

What is globalization?

Globalization is the process by which ideas, knowledge, information, goods and services spread around the world. In business, the term is used in an economic context to describe integrated economies marked by free trade, the free flow of capital among countries and easy access to foreign resources, including labor markets , to maximize returns and benefit for the common good.

Globalization is driven by the convergence of cultural and economic systems. This convergence promotes -- and in some cases necessitates -- increased interaction, integration and interdependence among nations. The more countries and regions of the world become intertwined politically, culturally and economically, the more globalized the world becomes.

How globalization works

In a globalized economy, countries specialize in the products and services they have a competitive advantage in. This generally means what they can produce and provide most efficiently, with the least amount of resources, at a lower cost than competing nations. If all countries were specializing in what they do best, production should be more efficient worldwide, prices lower, economic growth widespread and all countries benefiting -- in theory.

Policies that promote free trade, open borders and international cooperation drive economic globalization. They enable international businesses to access lower priced raw materials and parts, take advantage of lower cost labor markets, and access larger and growing markets around the world in which to sell their goods and services.

Money, products, materials, information and people flow more swiftly across national boundaries than ever. Advances in technology enable and accelerate this flow and the resulting international interactions and dependencies. These technological advances have been especially pronounced in transportation and telecommunications .

Among the recent technological changes that have played a role in globalization are the following:

Internet and internet communication. The internet has increased the sharing and flow of information and knowledge, access to ideas and exchange of culture among people of different countries. It has contributed to closing the digital divide between more and less advanced countries.

Communication technology. The introduction of 4G and 5G technologies has dramatically increased the speed and responsiveness of mobile and wireless networks.

Internet of things and artificial intelligence. IoT and AI technologies are enabling the tracking of assets in transit and as they move across borders, making cross-border product management more efficient.

Blockchain. This technology provides a transparent ledger that centrally records and vets transactions in a way that prevents corruption and breaches. It facilitates the secure access to data required in industries such as healthcare and banking. It has also enabled the development of decentralized databases and storage that support the tracking of materials in the supply chain .

Transportation. Advances in air transport and fast rail technology have facilitated the movement of people and products. Changes in shipping logistics technology have made it possible to move raw materials, parts and finished products around the globe more efficiently.

Manufacturing. Advances in manufacturing, such as automation and 3D printing, have reduced geographic constraints in manufacturing. 3D printing enables digital designs to be sent anywhere and physically printed, making distributed, smaller-scale production near the point of consumption easier. Automation speeds up processes and supply chains, giving workforces more flexibility and improving output.

Why is globalization important?

Globalization changes the way nations, businesses and people interact. Specifically, it changes the nature of international economic activity, expanding trade, opening global supply chains and providing access to natural resources and labor markets.

Changing the way trade and financial exchange and interaction occur among nations also promotes the cultural exchange of ideas. It removes the barriers caused by geographic constraints, political boundaries and political economies.

For example, globalization enables businesses in one nation to access another nation's resources. More open access changes the way products are developed, supply chains are managed and organizations communicate. Businesses find cheaper raw materials and parts, less expensive or more skilled labor and more efficient ways to develop products.

With fewer restrictions on trade, globalization creates opportunities to expand. Increased trade promotes international competition. This, in turn, spurs innovation and, in some cases, the exchange of ideas and know-how. In addition, people coming from other nations to do business and work bring with them their own cultures, which influence and mix with other cultures.

The many types of exchange that globalization facilitates can have positive and negative effects. For instance, the exchange of people and goods across borders can bring fresh ideas and help business. However, this movement can also increase the spread of disease and promote ideas that might destabilize political economies.

For example, increased international trade and travel in the late 1990s led to West Nile Virus being introduced to North America, likely as a result of infected species being transported or people traveling there.

History of globalization

Although many people consider globalization a twentieth-century phenomenon, the process has been happening for millennia. Examples include the following:

• The Roman Empire. Going back to 600 B.C., the Roman Empire spread its economic and governing systems through significant portions of the ancient world for centuries.
• Silk Road trade. These trade routes, which date from 130 B.C. to 1453 A.D., represented another wave of globalization. They brought merchants, goods and travelers from China, through Central Asia and the Middle East, to Europe.
• Pre-World War I. European countries made significant investments overseas in the decades before World War I. The period from 1870 to 1914 is called the golden age of globalization.
• Post-World War II. The United States led the effort to create a global economic system with a set of broadly accepted international rules. Multinational institutions were established such as the United Nations, International Monetary Fund, World Bank and World Trade Organization to promote international cooperation and free trade.

The term globalization as it's used today came to prominence in the 1980s, reflecting several technological advancements that increased international interactions. IBM's introduction of the personal computer in 1981 and the subsequent evolution of the modern internet are two examples of technology that helped drive international communication, commerce and globalization.

Globalization has ebbed and flowed throughout history, with periods of expansion and retrenchment. The 21st century has witnessed both. Global stock markets plummeted after the Sept. 11, 2001, terrorist attacks in the United States, but rebounded in subsequent years.

More recently, nationalist political movements have slowed immigration, closed borders and increased trade protectionism. The pandemic had similar effects on borders and immigration, and it also disrupted supply chains . However, overall, the early 21st century has seen a dramatic increase in the pace of global integration. Rapid advances in technology and telecommunications are responsible for much of this change, according to economists.

What is the G20?

The G20, or Group of Twenty, is an international forum that aims to foster international cooperation by addressing global economic issues, such as financial stability and climate change. The G20 is made up of 19 countries and the European Union, including most of the world's largest economies.

The nations involved account for 80% of the planet's population, 75% of global exports and 85% of world GDP. It was founded in 1999, following the 1997 financial crisis, and has met every year since then.

Since 2008, the G20 has held an annual summit that brings together heads of state to discuss important economic issues. The G20's president is selected annually on a rotating basis, and that person's home country hosts the summit.

In 2021, the summit was held in Rome, Italy, and it addressed issues such as climate change, vaccines, taxes, the global economy and development aid. The 2022 summit was held in Bali, Indonesia. The main themes addressed were energy, governance, health, industrial development, economics and investment, as well as countering Russian aggression in Ukraine. The 2023 summit was held in New Delhi, India , with a focus on similar issues as well as an agreement to dramatically expand sustainable energy.

The members of G20 are Argentina, Australia, Brazil, Canada, China, France, Germany, Japan, India, Indonesia, Italy, Mexico, Russia, South Africa, Saudi Arabia, South Korea, Turkey, the United Kingdom, the United States, the European Union and the African Union. Spain is a permanent guest of the organization.

Types of globalization: Economic, political, cultural

There are three types of globalization.

• Economic globalization. This type of globalization focuses on the integration of international financial markets and the coordination of financial exchange. Free trade agreements, such as the North American Free Trade Agreement and the Trans-Pacific Partnership, are examples of economic globalization. Multinational corporations , which operate in two or more countries, play a large role in economic globalization.
• Political globalization. This type covers the national policies that bring countries together politically, economically and culturally. International organizations such as NATO and the United Nations are part of the political globalization effort.
• Cultural globalization. This aspect of globalization focuses in large part on the technological and societal factors that are causing cultures to converge. These include increased ease of communication, the pervasiveness of social media and access to faster and better transportation.

These three types of globalization influence one another. For example, liberalized national trade policies drive economic globalization. Political policies also affect cultural globalization, enabling people to communicate and move around the globe more freely. Economic globalization also affects cultural globalization through the import of goods and services that expose people to other cultures.

Effects of globalization

The effects of globalization can be felt locally and globally, touching the lives of individuals as well as the broader society in the following ways:

• Individuals. A variety of international influences affect ordinary people. Globalization can make it easier for people to access raw materials, products and services. It can also lower the prices they pay and their ability to travel to other countries.
• Communities. Globalization also changes how local and regional organizations, businesses and economies function and interact. It affects who lives in communities, where they work, who they work for, their ability to move out of their community and into one in another area, etc. Globalization also changes the way local cultures develop within communities.
• Institutions. Multinational corporations, national governments and other organizations such as colleges and universities are all affected by their country's approach to and acceptance of globalization. Globalization affects the ability of a company to grow and expand, a university's ability to diversify and grow its student body and a government's ability to pursue specific economic policies.

While the effects of globalization can be observed, analyzing the net impact is more complex. Proponents often see specific results as positive, and critics of globalization view the same results as negative or somewhat ineffective. A relationship that benefits one entity may damage another, and whether globalization benefits the world at large remains a point of contention.

Examples of globalization

Multinational corporations are a tangible example of globalization. Some examples include the following:

• McDonald's had more than 40,000 fast-food restaurants in 118 countries and territories in 2022.
• Ford Motor Company works with about 1,400 tier 1 suppliers around the globe.
• Amazon has expanded in recent years and now has nearly 10 million sellers globally and employs approximately 1.5 million employees.

Multinational corporations influence the social and economic development of the countries that host them. They also embody the contradictions of globalization. They bring jobs, skills and wealth to the region they're investing or doing business in. But they also can destroy local businesses, exploit cheap labor and threaten indigenous cultures. The benefits they offer are often unsustainable because the loyalty of multinationals is to their investors and bottom lines and not to the local people, economies and cultures where they're doing business.

Another example of globalization is the response to the COVID-19 pandemic. Because the world was able to communicate across boundaries, some nations worked together to quickly produce vaccines for the virus. In addition, doctors traveled where they were needed. For example, Cuba sent doctors to Italy at the beginning of the pandemic to assist with the crisis as it developed there.

However, countries also enacted strict travel restrictions, and many closed their borders to cut down on the free movement of people and spread of the virus.

Benefits of globalization

Globalization enables countries to access less expensive natural resources and lower cost labor. As a result, they can produce lower cost goods that can be sold globally. Proponents of globalization argue that a global economy improves the state of the world in many ways, such as the following:

• Solving economic problems. Globalization moves jobs and capital to places that need these resources. It gives more developed countries access to lower cost resources and labor, and less developed countries access to jobs and the investment funds they need for development.
• Promoting free trade. Globalization puts pressure on nations to reduce tariffs, subsidies and other barriers to free trade. This promotes economic growth, creates jobs, makes companies more competitive and lowers prices for consumers.
• Spurring economic development. Globalization can give developing countries access to foreign capital and technology they wouldn't otherwise have, thus bridging the digital divide. Foreign investment can result in an improved standard of living for the citizens of those nations.
• Encouraging positive trends in human rights and the environment. Advocates of globalization point to improved attention to human rights on a global scale and a shared understanding of the impact of people and production on the environment.
• Promoting shared cultural understanding. Advocates view the increased ability to travel and experience new cultures as a positive part of globalization that can contribute to international cooperation and peace.

Negative consequences of globalization

Many proponents view globalization as a way to solve systemic problems in the world economy, but critics see it as increasing global income inequality. Among the critiques of globalization are the following issues:

• Destabilizes markets. Critics of globalization blame the elimination of trade barriers and the freer movement of people for undermining national policies and local cultures. Labor markets in particular are affected when people move across borders in search of higher paying jobs and companies outsource work and jobs to lower cost labor markets.
• Damages the environment. The transport of goods and people among nations generates greenhouse gases and all the negative effects it has on the environment. Global travel and trade also can introduce, sometimes inadvertently, invasive species to foreign ecosystems. Industries such as fishing and logging tend to go where business is most lucrative or the regulatory environment is less restrictive, which has resulted in overfishing and deforestation in some parts of the world.
• Lowers living standards. When companies move operations overseas to minimize costs, such moves can eliminate jobs, increasing unemployment in sectors of the home country.
• Facilitates global recessions. Tightly integrated global markets carry a greater risk of global recessions. The 2007-2009 financial crisis and Great Recession is a good example of how intertwined global markets are and how financial problems in one country or region can quickly affect other parts of the world. Globalization reduces the ability of individual nations to use monetary and fiscal policies to control the national economy.
• Damages cultural identities. Critics of globalization decry the decimation of unique cultural identities and languages that comes with the international movement of businesses and people. At the same time, the internet and social media are driving this trend even without the movement of people and commerce.
• Increases the likelihood of pandemics. Increased travel has the potential to increase the risk of pandemics. The H1N1 swine flu outbreak of 2009 and coronavirus in 2020 and 2021 are two examples of serious diseases that spread to multiple nations quickly.

Examples of deglobalization

Globalization critics promote deglobalization, where nations are skeptical of global integration. Independence, particularly economic independence, is viewed as more beneficial than interdependence on other nations.

For example, the COVID-19 pandemic's effect on global supply chains caused bottlenecks and shortages of many goods, straining various nations' economies. To proponents of deglobalization, a shift toward locally sourced raw materials and products made sense.

However, it's not just countries that are becoming deglobalized. Companies are disengaging from certain countries, as well. Many companies closed their offices in Russia and suspended service in light of the Russia-Ukraine war. Others have partially ceased operations there, as Sketchers did in suspending shipments to Russia but not online sales.

In recent decades, companies in certain sectors -- particularly manufacturing -- have outsourced operations to other countries to take advantage of lower labor costs. More recently, there have been targeted efforts to reduce reliance on countries like China and reshore U.S. manufacturing so that products can be sourced in the U.S. For example, Intel is building two semiconductor plants in central Ohio, and Hyundai is building an electric vehicle and battery manufacturing plant in Georgia.

Future of globalization

Technological advances, particularly in blockchain, mobile communication and banking, are fueling economic globalization.

Nonetheless, rising levels of protectionism and antiglobalization sentiment could slow or even reverse the rapid pace of globalization. Nationalism and increasing trends toward conservative economic policies are driving these antiglobalization efforts.

Global trade is also made more difficult by rising threats from other factors, such as the following:

• Climate change.
• Decaying infrastructure.
• Cyber attacks.
• Human rights abuses.

The takeaway

Globalization is a longstanding trend that's in the process of changing and possibly slowing. There are advantages to the open border and free trade that globalization promotes, especially with technological advancements that facilitate international trade, in terms of both imports and exports. There are also negative consequences.

In the post-pandemic world, individuals, businesses and countries must consider both sides of the globalization issue. The fact that there are pros and cons to consider is shaping how companies are rethinking global supply chains to avoid disruption while still reaping some benefits of globalization.

Globalized supply chains can slow down due to component supply issues or shrinking demand. Find out how the recent decline in global smartphone shipments exemplifies this.

Continue Reading About globalization

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The State of Globalization in 2022

• Steven A. Altman
• Caroline R. Bastian

Its collapse has been vastly overstated, according to an analysis of international flows of trade, capital, information, and people.

As companies contemplate adjustments to their global strategies, it is important to recognize how much continuity there still is even in a period of wrenching change. The idea of a world where economic efficiency alone drives patterns of international flows was always a myth. Globalization has always been an uneven process, with cross-country differences and international conflicts significantly dampening international flows. That’s a big part of why — even before the present crisis in Ukraine — only about 20% of global economic output ended up in a different country from where it was produced. As the landscape shifts, global strategies must be updated, but managers should avoid the costly overreactions that tend to follow major shocks to globalization.

Russia’s invasion of Ukraine has led to a new round of predictions that the end of globalization is nigh , much like we saw at the beginning of the Covid-19 pandemic . However, global cross-border flows have rebounded strongly since the early part of the pandemic. In our view, the war will likely reduce many types of international business activity and cause some shifts in their geography, but it will not lead to a collapse of international flows.

• Steven A. Altman is a senior research scholar, adjunct assistant professor, and director of the DHL Initiative on Globalization at the NYU Stern Center for the Future of Management .
• CB Caroline R. Bastian is a research scholar at the DHL Initiative on Globalization.

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Effects of Economic Globalization

Globalization has led to increases in standards of living around the world, but not all of its effects are positive for everyone.

Social Studies, Economics, World History

Bangladesh Garment Workers

The garment industry in Bangladesh makes clothes that are then shipped out across the world. It employs as many as four million people, but the average worker earns less in a month than a U.S. worker earns in a day.

Photograph by Mushfiqul Alam

Put simply, globalization is the connection of different parts of the world. In economics, globalization can be defined as the process in which businesses, organizations, and countries begin operating on an international scale. Globalization is most often used in an economic context, but it also affects and is affected by politics and culture. In general, globalization has been shown to increase the standard of living in developing countries, but some analysts warn that globalization can have a negative effect on local or emerging economies and individual workers. A Historical View Globalization is not new. Since the start of civilization, people have traded goods with their neighbors. As cultures advanced, they were able to travel farther afield to trade their own goods for desirable products found elsewhere. The Silk Road, an ancient network of trade routes used between Europe, North Africa, East Africa, Central Asia, South Asia, and the Far East, is an example of early globalization. For more than 1,500 years, Europeans traded glass and manufactured goods for Chinese silk and spices, contributing to a global economy in which both Europe and Asia became accustomed to goods from far away. Following the European exploration of the New World, globalization occurred on a grand scale; the widespread transfer of plants, animals, foods, cultures, and ideas became known as the Columbian Exchange. The Triangular Trade network in which ships carried manufactured goods from Europe to Africa, enslaved Africans to the Americas, and raw materials back to Europe is another example of globalization. The resulting spread of slavery demonstrates that globalization can hurt people just as easily as it can connect people. The rate of globalization has increased in recent years, a result of rapid advancements in communication and transportation. Advances in communication enable businesses to identify opportunities for investment. At the same time, innovations in information technology enable immediate communication and the rapid transfer of financial assets across national borders. Improved fiscal policies within countries and international trade agreements between them also facilitate globalization. Political and economic stability facilitate globalization as well. The relative instability of many African nations is cited by experts as one of the reasons why Africa has not benefited from globalization as much as countries in Asia and Latin America. Benefits of Globalization Globalization provides businesses with a competitive advantage by allowing them to source raw materials where they are inexpensive. Globalization also gives organizations the opportunity to take advantage of lower labor costs in developing countries, while leveraging the technical expertise and experience of more developed economies. With globalization, different parts of a product may be made in different regions of the world. Globalization has long been used by the automotive industry , for instance, where different parts of a car may be manufactured in different countries. Businesses in several different countries may be involved in producing even seemingly simple products such as cotton T-shirts. Globalization affects services, too. Many businesses located in the United States have outsourced their call centers or information technology services to companies in India. As part of the North American Free Trade Agreement (NAFTA), U.S. automobile companies relocated their operations to Mexico, where labor costs are lower. The result is more jobs in countries where jobs are needed, which can have a positive effect on the national economy and result in a higher standard of living. China is a prime example of a country that has benefited immensely from globalization. Another example is Vietnam, where globalization has contributed to an increase in the prices for rice, lifting many poor rice farmers out of poverty. As the standard of living increased, more children of poor families left work and attended school. Consumers benefit also. In general, globalization decreases the cost of manufacturing . This means that companies can offer goods at a lower price to consumers. The average cost of goods is a key aspect that contributes to increases in the standard of living. Consumers also have access to a wider variety of goods. In some cases, this may contribute to improved health by enabling a more varied and healthier diet; in others, it is blamed for increases in unhealthy food consumption and diabetes. Downsides Not everything about globalization is beneficial. Any change has winners and losers, and the people living in communities that had been dependent on jobs outsourced elsewhere often suffer. Effectively, this means that workers in the developed world must compete with lower-cost markets for jobs; unions and workers may be unable to defend against the threat of corporations that offer the alternative between lower pay or losing jobs to a supplier in a less expensive labor market. The situation is more complex in the developing world, where economies are undergoing rapid change. Indeed, the working conditions of people at some points in the supply chain are deplorable. The garment industry in Bangladesh, for instance, employs an estimated four million people, but the average worker earns less in a month than a U.S. worker earns in a day. In 2013, a textile factory building collapsed, killing more than 1,100 workers. Critics also suggest that employment opportunities for children in poor countries may increase negative impacts of child labor and lure children of poor families away from school. In general, critics blame the pressures of globalization for encouraging an environment that exploits workers in countries that do not offer sufficient protections. Studies also suggest that globalization may contribute to income disparity and inequality between the more educated and less educated members of a society. This means that unskilled workers may be affected by declining wages, which are under constant pressure from globalization. Into the Future Regardless of the downsides, globalization is here to stay. The result is a smaller, more connected world. Socially, globalization has facilitated the exchange of ideas and cultures, contributing to a world view in which people are more open and tolerant of one another.

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What Is Globalization?

• How It Works
• Pros & Cons

The Bottom Line

• Macroeconomics

Globalization in Business With History and Pros and Cons

Globalization refers to the growing interconnection of nations' economies. It represents the flow of financial products, goods, technology, information, and jobs across national borders and cultures. In economic terms, it describes an interdependence of countries around the globe fostered through free trade .

Key Takeaways

• Globalization is the spread of products, technology, information, and jobs across nations.
• Corporations in developed nations can gain a competitive edge through globalization.
• Developing countries also benefit from globalization as they tend to be more cost-effective locations and therefore attract jobs.
• The benefits of globalization have been questioned as the positive effects are not necessarily distributed equally.
• One clear result of globalization is that an economic downturn in one country can have a domino effect on its trade partners.

Alex Dos Diaz / Investopedia

Understanding Globalization

Corporations gain a competitive advantage on multiple fronts from globalization. They can reduce operating costs by manufacturing abroad, buy raw materials more cheaply because of the reduction or removal of tariffs , and most of all, gain access to millions of new consumers.

What Globalization Means

Globalization is a social, cultural, political, and legal phenomenon. 

• Socially, it leads to greater interaction among various populations.
• Culturally, globalization represents the exchange of ideas, values, and artistic expression among cultures.
• Globalization also represents a trend toward the development of a single world culture. 
• Politically, globalization has shifted attention to intergovernmental organizations like the United Nations (UN) and the World Trade Organization (WTO) .
• Legally, globalization has altered how international law is created and enforced.

On the one hand, globalization has created new jobs and economic growth through the cross-border flow of goods, capital, and labor. On the other hand, this growth and job creation are not distributed evenly across industries or countries.

Specific industries in certain countries, such as textile manufacturing in the United States or corn farming in Mexico, have suffered severe disruption or outright collapse as a result of increased international competition.

Globalization's motives are idealistic, as well as opportunistic, but the development of a global free market has benefited large corporations based in the Western world. Its impact remains mixed for workers, cultures, and small businesses around the globe, in both developed and emerging nations .

Globalization has grown at an unprecedented pace, with public policy changes and communications technology innovations cited as the two main driving factors.

The History of Globalization

Globalization is not a new concept. Traders traveled vast distances in ancient times to buy commodities that were rare and expensive for sale in their homelands. The Industrial Revolution brought advances in transportation and communication in the 19th century that eased trade across borders.

The think tank Peterson Institute for International Economics (PIIE) states globalization stalled after World War I. Nations moved toward protectionism as they launched import taxes to guard their industries in the aftermath of the conflict. This trend continued through the Great Depression and World War II until the U.S. took on an instrumental role in reviving international trade .

One of the critical steps in the path to globalization came with the North American Free Trade Agreement (NAFTA) , signed in 1993. One of NAFTA's many effects was to give American auto manufacturers the incentive to relocate a portion of their manufacturing to Mexico where they could save on the costs of labor. NAFTA was replaced in 2020 by the United States-Mexico-Canada Agreement (USMC) .

Governments worldwide have integrated a free market economic system through  fiscal policies  and trade agreements in the 20th century. The core of most trade agreements is the removal or reduction of tariffs.

This evolution of economic systems has increased industrialization and financial opportunities in many nations. Governments now focus on removing barriers to trade and promoting international commerce.

Pros and Cons of Globalization

• Proponents of globalization believe it allows developing countries to catch up to industrialized nations through increased manufacturing, diversification, economic expansion, and improvements in standards of living .
• Outsourcing by companies brings jobs and technology to developing countries, which helps them to grow their economies. Trade initiatives increase cross-border trading by removing supply-side and trade-related constraints.
• Globalization has advanced  social justice  on an international scale as well, and advocates report that it has focused attention on human rights worldwide that might have otherwise been ignored on a large scale.
• One clear result of globalization is that an economic downturn in one country can have a domino effect on its trade partners. For example, the 2008 financial crisis had a severe impact on Portugal, Ireland, Italy, Greece, and Spain. All of these countries were members of the European Union , which had to bail out debt-laden nations, which were thereafter known by the acronym PIIGS .
• Globalization detractors argue that it has created a concentration of wealth and power in the hands of a small corporate elite that can gobble up smaller competitors around the globe.
• Globalization has become a polarizing issue in the U.S. with the disappearance of entire industries to new locations abroad. It's seen as a major factor in the economic squeeze on the middle class .
• For better or worse, globalization can reduce the cultural and social aspects unique to people and geographic areas around the world and increase product homogeneity. Starbucks, Nike, and Gap dominate commercial space in many nations. The sheer size and reach of the U.S. have made the cultural exchange among nations largely a one-sided affair.

A larger market for goods and services

Cheaper consumer prices

Outsourcing can benefit domestic firms and foreign labor

Increased standard of living

Concentrates wealth in richer countries

Some poorer countries can be left behind

Labor and the physical and intellectual resources of poorer countries can be exploited

Regions and cultures lose their uniqueness and products available around the world can become homogeneous

Why Is Globalization Important?

Globalization is important as it increases the size of the global market, and allows more and different goods to be produced and sold for cheaper prices. It is also important because it is one of the most powerful forces affecting the modern world, so much so that it can be difficult to make sense of the world without understanding globalization.

For example, many of the largest and most successful corporations in the world are in effect truly multinational organizations, with offices and supply chains stretched right across the world. These companies would not be able to exist if not for the complex network of trade routes, international legal agreements, and telecommunications infrastructure that were made possible through globalization. Important political developments, such as the ongoing trade conflict between the U.S. and China, are also directly related to globalization.

Is Globalization Good or Bad?

It depends. Proponents of globalization will point to the dramatic decline in poverty throughout the world for more than two decades after around year 2000, which many economists attribute in part to increased trade and investment between nations. Similarly, they will argue that globalization has allowed products and services such as cellphones, airplanes, and information technology to be spread far more widely throughout the world.

On the other hand, critics of globalization will point to the negative impact it has had on specific nations’ industries, which might face increased competition from international firms. Globalization can also have negative environmental impacts due to economic development, industrialization, and international travel.

How Does Globalization Impact Society?

Globalization has had a large impact on societies around the world, leading to massive migrations from rural to industrial or urban areas and to the rapid growth of cities and trade hubs. While this has meant an overall increase in incomes and a higher standard of living in general, it has also led to problems such as crime, domestic violence, homelessness, and poverty. Concepts of national identity, national or regional culture, and consumption patterns also change as goods from around the world become increasingly available and at low prices. The competitiveness of global capitalism may also lead to more individualistic ideals that contradict the cultural orientations of certain, more collectivist societies.

What Is an Example of Globalization?

A simple example of globalization would be a car manufactured in the U.S. that sources parts from China, Japan, South Korea, Sri Lanka, and South Africa. The car is then exported to Europe, where it is sold to a driver who fills the car's gas tank with gasoline refined from Saudi oil.

Globalization refers to the ongoing trend of increased interconnectivity of nations across the globe, as enabled by advancements in transportation and information technology, among others.

Globalization is facilitated economically by free trade agreements, which permit barrier-free imports and exports across borders. While globalization brings many advantages—including lower prices and higher standards of living to some—it also has drawbacks, including wealth concentration and cultural homogeneity.

Peterson Institute for International Economics. " What Is Globalization? "

Congressional Research Service. " The North American Free Trade Agreement ," Page 1.

Congressional Research Service. " The North American Free Trade Agreement ." Pages 16-17.

Office of the United States Trade Representative. " United States-Mexico-Canada Agreement ."

FasterCapital. “ Financial Bailout: PIIGS and Financial Bailouts: Lessons From the Crisis .”

Macrotrends. “ World Poverty Rate 1981-2024 .”

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• Published: 13 September 2024

Globalization of wild capture and farmed aquatic foods

• Jessica A. Gephart   ORCID: orcid.org/0000-0001-6836-9291 1 ,
• Rahul Agrawal Bejarano   ORCID: orcid.org/0000-0002-3944-4149 2 , 3 ,
• Kelvin Gorospe 2 ,
• Alex Godwin 4 ,
• Christopher D. Golden   ORCID: orcid.org/0000-0002-2258-7493 5 ,
• Rosamond L. Naylor   ORCID: orcid.org/0000-0002-1260-3322 6 ,
• Kirsty L. Nash   ORCID: orcid.org/0000-0003-0976-3197 7 ,
• Michael L. Pace 8 &
• Max Troell   ORCID: orcid.org/0000-0002-7509-8140 9 , 10  

Nature Communications volume  15 , Article number:  8026 ( 2024 ) Cite this article

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Aquatic foods are highly traded, with nearly 60 million tonnes exported in 2020, representing 11% of global agriculture trade by value. Despite the vast scale, basic characteristics of aquatic food trade, including species, origin, and farmed vs wild sourcing, are largely unknown due to the reporting of trade data. Consequently, we have a coarse picture of aquatic food trade and consumption patterns. Here, we present results from a database on species trade that aligns production, conversion factors, and trade to compute apparent consumption for all farmed and wild aquatic foods from 1996 to 2020. Over this period, aquatic foods became increasingly globalized, with the share of production exported increasing by 40%. Importantly, trends differ across aquatic food sectors. Global consumption also increased by 19.4% despite declining marine capture consumption, and some regions became increasingly reliant on foreign-sourced aquatic foods. To identify sustainable diet opportunities among aquatic foods, our findings, and underlying database enable a greater understanding of the role of trade in rapidly evolving aquatic food systems.

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Aquatic foods to nourish nations

Effect of trade on global aquatic food consumption patterns

Blue food demand across geographic and temporal scales

Introduction.

Aquatic food systems are an important source of human nutrition 1 , livelihoods 2 , and revenue 3 throughout the world. Aquatic foods also show promise to reduce environmental pressures of food production due to low average resource use and emissions 4 . However, aquatic foods are incredibly diverse, comprising over 2400 marine and freshwater species that are captured and farmed with a range of methods 5 . Consequently, aquatic foods vary widely in their nutrient composition 1 and associated environmental pressures 4 . This has prompted work to identify and support aquatic food systems that improve nutrition, sustainability, and human well-being 6 , 7 , 8 , 9 . With the international trade of aquatic food representing 40% of production 3 , accounting for trade is central to meeting these objectives.

Trade brings a range of benefits and risks for food security, resilience, and sustainability. Benefits include providing consumers with diverse and out-of-season foods, supplying products at lower prices, stimulating local economic growth, diversifying sourcing in the face of local shocks, and reducing environmental impacts when products are sourced from regions better suited for production 10 . However, risks stemming from globalization include accelerating the nutrition transition to unhealthy diets 11 , undermining domestic production by suppressing prices 12 , exposing local markets to international shocks 13 , degrading local environments to meet distant market demand 14 , 15 , and facilitating shifting production to locations with relaxed environmental and labor regulations 16 , 17 .

Which trade-related benefits and risks are experienced, and by who is context-dependent. Unfortunately, our understanding of the distribution of global benefits and risks is limited by the low species resolution of global trade data relative to the vast diversity of aquatic foods, and because internationally reported trade data does not indicate the country of harvest. Consequently, we only have a coarse picture of the basic features of the aquatic food trade, including the geographical origin and production method (wild or farmed) 18 , 19 . Coarse trade data further places profound constraints on understanding aquatic food consumption patterns and therefore the potential role of aquatic foods in sustainable and resilient food systems.

Limited resolution of aquatic food consumption arises from a fundamental mismatch between production and trade data: production from capture fisheries and aquaculture is reported as species or species groups (e.g., Salmo salar or Oncorhynchus spp.) in terms of live weights whereas trade is reported as commodities (e.g., canned salmon) in terms of product weight, generally without farmed vs wild designations. Converting commodity trade to species trade is difficult because one species can contribute to multiple commodities (e.g., S. salar can be converted into whole frozen salmon or salmon filets), a single commodity can be made up of multiple species (e.g., salmon filets can be made from S. salar or Oncorhynchus tshawytscha ), and a traded commodity can be converted through processing and exported again (e.g. whole frozen salmon processed into salmon filets).

To improve understanding of global aquatic food trade and the associated implications for food security, resilience, and sustainability, we present a global database of species trade flows for all farmed and wild aquatic foods from across marine and inland waters from 1996 to 2020. The Aquatic Resource Trade in Species (ARTIS) database consists of over 2400 species/species groups, 193 countries, and over 35 million bilateral records. We estimated species trade flows by modeling each country’s conversion of wild and farmed production into commodities, conversion of imported commodities through processing, and apparent consumption. We then connected estimated species mixes and processing of foreign-sourced products to bilateral trade data to disaggregate global flows of aquatic foods. ARTIS improves upon previous efforts by estimating annual species-level trade across production methods and habitats rather than providing an aggregate snapshot of capture and aquaculture trade 20 , and by accounting for processing losses and foreign processing 21 . The resulting data and code accompanying this paper will serve as a critical resource for future research on aquatic food trade and consumption.

Using ARTIS, we characterize the global farmed and wild aquatic food trade, including all fish and aquatic invertebrate species destined for human consumption. We first detail the evolution of trade in marine and inland capture and aquaculture products, providing new measures of the degree of globalization across aquatic foods. We show that aquatic food trade more than doubled from 1996 to 2019, with aquaculture growing at a faster rate, but capture fisheries are still responsible for the majority of the aquatic food trade. We also demonstrate large differences in the export orientation of different aquatic food sectors, with a third of all marine production destined for export but only around 6% of inland aquaculture production being exported. Second, we evaluate how bilateral flows of aquatic foods have shifted since 1996, demonstrating shifts in key importers and exporters of aquaculture and marine capture products. Finally, we present trends in aquatic food apparent consumption, including shifts in import dependence. We find that although aquatic food consumption has increased overall, aquaculture is responsible for this trend, as consumption of capture fishery products has declined. However, both the production method and geographical sourcing patterns vary greatly by region, with the largest increases in aquaculture consumption and domestic sourcing in Asia, and growing aquaculture consumption but increasing import reliance in Europe and North America. Across each of these areas, we contextualize our findings with the implications for food security, sustainability, and resilience.

Results and discussion

Trends in aquatic food globalization.

Globalization describes the degree of international connectedness, which can be characterized by increasing flows of input, intermediate, and final products among countries. Globalization exposes countries to external shocks, while also serving as a buffer against local shocks. Recent work on trade characteristics associated with systemic risk to shocks suggests higher exposure when networks are densely connected and concentrated, and when countries are highly dependent on imports 22 , 23 , 24 . By disaggregating global aquatic food trade, we can evaluate the structural features of the aquatic food trade associated with resilience to shocks.

Aquatic food exports more than doubled from 1996 to 2019 (28.1–59.2 mil t; Fig.  1a ), on par with cereal products 25 . Over that period, both farmed and wild exports increased, though aquaculture grew faster, more than tripling, whereas capture exports grew by 74%. Corresponding with the start of the COVID-19 pandemic, global aquatic food exports declined 4% in 2020 relative to 2019, with a 3% decline in capture exports, but a 0.8% increase in aquaculture exports, highlighting differential impacts by sector (Fig.  1a ). Despite aquaculture comprising half of aquatic food production, capture fishery products still constitute 60% of exports.

a Exports of global marine and freshwater aquaculture and fishery products (in million t, live weight equivalent) from 1996 to 2020. b Percent of global marine and freshwater aquaculture and fishery production exported, excluding re-exports. c Average number of export partners (out-degree) by production method and environment, with the gray bands representing the 95% confidence interval. d Number of countries comprising 75% of global exports by production method and environment with the global total in the black line. e Number of countries comprising 75% of global imports by production method and environment with the global total in the black line.

Another measure of the degree of globalization is the share of production exported. Domestic exports increased from 15.7% to 21.5% of production between 1996 and 2019, while total exports, which include export of foreign-sourced products, reached 33.5% of all production in 2019—slightly lower than the FAO estimates 36% for all aquatic resources 3 . Trade statistics do not generally distinguish between exports sourced from domestic production and those sourced from imported products, including products moving through intermediate countries or undergoing foreign processing. Consequently, total exports represent a higher percentage of production. For comparison, the share of cereal production exported grew from around 10% in the late 1990s to 17% in the 2020s 26 . Increasing marine capture exports despite stagnating production resulted in marine capture products having the greatest share of production destined for export (32.5% of production) and the largest increases in the share exported (Fig.  1b ). Aquaculture production more than doubled from 1996 to 2019, but aquaculture exports grew even faster, increasing the share exported (Fig.  1b ). Despite increases, inland aquaculture still had the lowest share of production destined for export in 2019 (domestic exports represented only 6.3% of production) (Fig.  1b ). This finding clarifies standing debates about the orientation of aquaculture and export trends suggest a need to consider international markets when crafting nutrition-sensitive policies 27 , 28 , 29 . Understanding the retention and foreign flow of aquatic foods and their associated nutrients is central to current work on equity and justice within aquatic food systems. Consequently, this information is key to monitoring the progress of nutrition-sensitive policies and for crafting policies that appropriately reflect the global nature of aquatic foods.

We also identified shifts in the structure of the aquatic food trade networks. We found that aquatic food trade became more connected with the average number of export partners nearly doubling from 1996 to 2019 (from 21.9 to 41.5; Fig.  1c ). Marine capture networks are most highly connected, followed by marine aquaculture, with inland capture and aquaculture trade being the least connected.

Since 1996, aquatic food exports have become moderately less concentrated, with only 18 countries comprising 75% of exports in 1996 vs 21 countries in 2019. Compare this with crops where just 7 countries and the EU account for 90% of wheat exports and just four countries account for >80% of maize exports 26 . Declining concentration is driven by capture fishery exports, whereas aquaculture exports became somewhat more concentrated (Fig.  1d ). Aquaculture export concentration corresponds to the high concentration of aquaculture production in a few regions. Similarly, the concentration of trade for individual species tends to be much higher. Divergent trends in trade features and differences among aquatic food groups suggest differences in the degree and types of trade shock risks across aquatic foods, as was observed in the responses to COVID-19 30 . Understanding the risk of shocks across foods is a priority research area, as trade-related risks and aquatic food systems are underrepresented in the food systems shock literature 13 .

Though aquatic food production, distribution, and consumption remain highly uneven 31 , we found declining import concentration, with 12 countries comprising 75% of imports in 1996 vs 21 countries in 2019 (Fig.  1e ). More dispersed import patterns are likely associated with growing populations and expanding middle classes and urbanization, particularly in low- and middle-income countries, which often drive increasing aquatic food demand 3 , 32 . Yet, the relationship between aquatic food demand and income varies across aquatic foods, with demand generally increasing with income for higher quality fish but falling for lower quality fish 32 .

Shifts in global flows of aquatic foods

Given the geographic patchiness of capture and aquaculture production, trade helps meet aquatic food demand in many countries. Aquatic food imports are especially important where per capita demand is rising, aquaculture is limited, wild fishery catch is stagnant, and aquatic foods play an important nutritional role. Corresponding to the geographical variability, we find the top importers, exporters, and bilateral flows to differ by habitat and farmed vs wild source, underscoring the importance of disaggregating trade (Supplementary Figs.  1 – 3 ). For example, Asia and Europe, and to a lesser extent, North America recently dominated marine capture and aquaculture trade networks whereas Asia dominates all inland aquatic food trade (Supplementary Fig.  S1 ).

At the country level, although some countries rank among the top traders across all production methods, such as China for exports and China, the United States and Japan for imports, many countries are only top traders for one (Supplementary Fig.  2 ). Between 1996 and 2020, China and Russia took over as the top two marine capture exporters, with approximately half of China’s marine capture exports representing re-exported products (Supplementary Fig.  2 ), which aligns with previous findings that 75% of China’s total aquatic food imports are re-exported 33 . China, the United States, and Japan are the top importers of marine capture products (Supplementary Fig.  3 ). Meanwhile, Norway and Chile rank highest in marine aquaculture exports, with the United States and Japan leading imports (Supplementary Figs.  2 – 3 ). Inland aquatic food trade is dominated by aquaculture, with the highest exports from Vietnam and China and the highest imports by the United States, Japan, and South Korea (Supplementary Figs.  2 – 3 ). In general, inland production is oriented more toward domestic consumption, and what is exported tends to stay within the region, particularly within Asia (Fig.  2 and Supplementary Fig.  1 ).

Maps of national aquatic food consumption (in million tonnes, live weight equivalent) represented by fill color for marine capture, marine aquaculture, inland capture, and inland aquaculture, along with the top ten trade flows, with the arrow color indicating export volume. Accompanying each map is a ranked bar chart of the top five traded scientific names, each with two stacked bars to indicate the producing and consuming regions.

The patterns of top importers are reflected in the patterns of top consumption of foreign aquatic foods by habitat and production group, though the patterns of top flows are more distinct (Fig.  2 ). For example, although the United States is among the top importers for all four habitat and production groups, the sourcing varies, with the largest marine capture sourcing from Canada and Russia, the largest marine aquaculture sourcing from Chile, and its largest inland aquaculture sourcing from China and Vietnam (Fig.  2 ). The major sourcing flows are closely related to the production geographies of the top traded species by production group (Fig.  2 ). There is very little production method overlap in the top consumed traded species and the distributions are relatively flat, apart from marine aquaculture, which is dominated by white leg shrimp ( Litopenaeus vannamei ) and Atlantic salmon ( S. salar ) (Fig.  2 ).

Intraregional trade is generally higher than interregional trade due to shorter transport distances, historical ties, patterns of aquatic food preferences, and established regional trade agreements 34 . We find this pattern largely holds for aquatic food trade as intraregional trade is the highest for Asia, Africa, and Europe (Fig.  3b ). However, Oceania and North and South America all have the largest export to Asia, rather than to other countries in the same region (Fig.  3b ). Since 1996, trade increased or remained approximately stable between nearly all regional trade pairs, other than within North America (Supplementary Fig.  4 ). At the country level, trade increased between two-thirds of trade pairs. Despite trade increasing with partners across the globe, trade within Asia, Europe, and Africa grew faster. The largest average annual growth increases occurred for trade within Asia and Europe, followed by trade between Europe and Asia (Fig.  3b and Supplementary Fig.  4 ). Our trade estimates are ultimately from reported trade and therefore do not capture informal and unreported trade networks. Though estimated unreported trade is not globally available, it can be significant, especially for neighboring countries. For example, informal exports from Benin to Nigeria are estimated to be more than five times the formal exports 35 . Including informal trade would therefore likely strengthen some intraregional trade patterns.

a Total imports (positive) and exports (negative) colored by source, with net import trend in black. b Bilateral flows colored by production source with exporting region along the rows and importing region along the columns. Values represent a million tonnes in live weight equivalents. Note the y -axis scale differs for each row.

Increasing global trade, along with distant water fishing, drives an expanding divide between aquatic food production and consumption 36 . Distancing consumers from the environmental impacts stemming from production has been proposed to reduce incentives for improving environmental standards and weaken price signals related to fishery sustainability 37 . However, the specific impacts resulting from trade will depend upon the environmental management context. Complex international supply chains also pose a challenge for traceability, raising sustainability concerns, including the risk of mislabeled 38 and illegally sourced 39 products entering markets. We find increasing volumes of products moving through intermediate countries, either in transit or imported for processing and re-exported, which poses a traceability challenge (Supplementary Fig.  5 ). Certification and import monitoring schemes represent two tools aimed at improving traceability, and ultimately, sustainable sourcing. However, evidence of the effectiveness of aquatic food supply chain transparency initiatives is mixed 40 . Our findings on increasing globalization across the aquatic food sector underscore the importance of evaluating the effectiveness and social impacts of these sustainability tools across a range of settings, while the ARTIS database enables future work on this topic.

Across regions, Europe and North America have the highest net imports while South America has the highest net exports (Fig.  3a ). Least developed countries collectively are net exporters of aquatic foods across all production methods, with net exports more than tripling between 1996 and their 2018 peak (Supplementary Fig.  6 ). Least developed country net exports are dominated by marine capture products and transfer of aquatic foods from least developed countries are likely even higher when catch by foreign fleets are considered, which represents a related but distinct mechanism by which aquatic resource are removed from countries’ waters. Net exports of aquatic foods may be economically beneficial to least developed countries where high-value species are exported and revenue is used to purchase other foods 41 . However, economic and political barriers inhibit wealth-based benefits from being realized 31 , 42 . Further, recent work exploring the movement of nutrients derived from fisheries suggests international trade is driving the redistribution of essential micronutrients from areas of high deficiency in middle- and low-income countries to developed nations with greater nutrient security 43 .

Aquatic food consumption

Since direct measurements of human food consumption (e.g., dietary intake) are not collected globally, it is often represented by apparent consumption. Apparent consumption is calculated as production plus imports minus exports and waste. Trade is therefore central to estimating consumption and has historically limited understanding of aquatic food consumption patterns. By estimating species-level trade, we estimate the apparent consumption of aquatic foods by species/species group, production method, and geographical origin.

Globally, annual aquatic food apparent consumption increased from 15.7 kg/capita in 1996 to 20 kg/capita in 2019 (Fig.  4a ). Our estimates are similar to FAOSTAT 25 , which reports global aquatic food consumption at 15.6 kg/capita/year in 1996 and 20.7 kg/capita/year in 2019. Given the similarity in consumption, this finding reaffirms the nutritional importance of aquatic foods, which supply 17% of animal protein globally, and over 20% of animal protein for over 3.3. billion people 44 . We found aquatic food consumption increased across all regions outside of North America, which was relatively stable, and South America, where aquatic food consumption declined 35.5% (Fig.  4b ). Global increases were driven by inland and marine aquaculture, which increased by 162% (from 2.54 kg/capita/year in 1996 to 6.64 kg/capita/year in 2019) and 177% (from 1.23 kg/capita/year in 1996 to 3.4 kg/capita/year in 2019), respectively. Meanwhile, inland capture consumption grew from 1.16 kg/capita/year in 1996 to 1.51 kg/capita/year in 2019, while marine capture consumption declined 21.5% (from 10.8 kg/capita/year in 1996 to 8.45 kg/capita/year in 2019). Nevertheless, capture still makes up 49% of global aquatic food consumption, with its contribution to regional aquatic food consumption ranging from 76% in Oceania to 38% in Asia, where farmed consumption overtook wild consumption in 2008.

a Global aquatic food apparent consumption by production source over time. b Regional aquatic food apparent consumption by production source over time. c Global aquatic food domestic vs foreign sourcing over time. d Regional aquatic food domestic vs foreign sourcing over time. Here, domestic refers to aquatic foods produced by the consuming country and foreign refers to aquatic foods produced by a different country.

Estimating the foreign versus domestic source of consumption requires identifying the share of production retained in the country and tracking products that undergo foreign processing but are imported again. By estimating the source of traded aquatic foods, we can therefore track changes in reliance on foreign-sourced products. Globally the share of foreign-sourced consumption increased modestly, from 20.1% in 1996 to 20.9% in 2019 (Fig.  4c ). However, patterns vary greatly across regions with countries in Asia and South America dominated by domestic supply (11% and 20% foreign in 2019, respectively), but countries in Europe dominated by foreign supply (72% foreign in 2019) in 2019 (Fig.  4d ). High reliance on foreign-sourced foods can pose food security risk 45 , 46 , though it is not clear the extent to which these risks exist across aquatic foods. Nevertheless, countries have enacted policies to protect domestic supplies, including developing food stocks and subsidizing domestic food production 47 . The United States has used foreign dependence on aquatic foods as motivation for a suite of policy changes to boost domestic production, including expanding aquaculture and opening marine protected areas to fishing 18 .

The increasingly globalized aquatic food system poses both challenges and opportunities for food security, sustainability, and resilience. Our work illuminates the evolution of farmed and wild aquatic food trade over the past 24 years, a period of rapid change for the sector. We show that trade patterns and trends differ across aquatic food groups, underscoring the value of species-resolved trade data. Marine capture remains the most highly globalized group, but aquaculture trade is growing faster. These trade patterns reflect major shifts within the industry, including the rise of foreign processing and the growth of aquaculture. Further, the ARTIS database presented here lays the foundation for answering pressing questions about the role of trade in meeting global food system goals.

To estimate the aquatic food species trade network, we compiled and aligned data on fishery and aquaculture production, live weight conversion factors, and bilateral global trade. The data span the globe and encompass decades of changes in country and species names and product forms. Over 4000 live weight conversion factors were compiled and matched to 2000+ farmed and wild capture aquatic species which in turn were matched to 900+ traded seafood product descriptions. Though we include nonfood (e.g., fish meal and ornamental trade) production and trade in the database, we exclude this from the analysis of aquatic food production and consumption. We also exclude mammals, reptiles, fowl, and seaweeds, along with co-products (e.g., caviar, shark fins, and fish meat) to avoid double counting, from the model and resulting database.

Species trade flow estimation occur in two steps. First, we take a mass balance approach, where each country’s aquatic food exports must equal the domestic production, plus imports, minus domestic consumption, after accounting for processing losses. For each country, we estimate the proportion of production going into each possible commodity, the proportion of each imported commodity processed and exported, and the domestic consumption of each commodity. We then use these estimates with bilateral trade data to solve for the global species flows. This approach substantially improves upon previous efforts by estimating species-level trade, covering all production environments (marine and freshwater) and production methods (farmed and wild-caught), and including the processing and export of imported products.

ARTIS also differs from other available trade databases and models in important ways. Databases presenting reported bilateral trade, such as UN Comtrade, do not include the source country and are reported in terms of products which generally obscures the species and production method. Closely related or derived databases, such as BACI, thus have the same issues when trying to understand aquatic food origin and species (see below for more details on reported trade data). FAO also provides bilateral trade data on fishery products, with products at a greater disaggregation than what the 6-digit harmonized system (HS) offers, though this still does not provide sourcing or full species/production method information and the data is currently only available for 2019–2021. Multiregional input–output models do resolve flows to the source country and these methods could be adapted to derive a similar database once the species mix of domestically exported products is defined. However, existing input–output databases do not disaggregate aquatic foods at this resolution, generally representing “fisheries” and “food and beverages” as a single or in only a few sectors, as these models are generally constrained by the resolution of national input–output and supply and use tables. A notable exception is FABIO, which disaggregates food and agricultural flows into 130 agriculture, food, and forestry products, though seafood is represented as a single group 48 .

Food and Agriculture Organization (FAO) national capture and aquaculture production data 5 serves as a key data input for disaggregating trade into improved species/species group resolution in the ARTIS model. FAO compiles annual capture and aquaculture production data reported by around 240 countries, territories, or land areas from 1950 to 2020. Production data for around 550 farmed and 1600 wild capture species and species groups (e.g., Bivalvia ) is reported in tonnes, expressed in the live weight equivalent. FAO production data consists primarily of official national statistics, with some verifiable supplemental information from academic reviews, consultant reports, and other specialist literature. Data reported by nations are checked by the FAO for consistency and questionable values are verified with the reporting offices. When countries fail to report production, FAO uses past values to estimate production. For the purposes of this analysis, we do not distinguish between nationally reported and FAO estimated values.

According to the Coordinating Working Party on Fishery Statistics, catch and landings should be assigned to the country of the flag flown by the fishing vessel irrespective of the location of the fishing. This means that production resulting from a country operating a fishing vessel in a foreign country’s territory should be recorded in the national statistics of the foreign fishing vessel. However, if the vessel is chartered by a company based in the home country or the vessel is fishing for the country under a joint venture contract or similar agreement and the operation is integral to the economy of the host country, this does not apply. Consequently, our estimates of source country generally represent who harvested or caught the aquatic resource regardless of where it was produced (i.e., distant water fishing would generally be attributed to the flag state). In cases of exceptions related to select chartered foreign vessels, joint ventures, or other similar agreements, a catch by a foreign vessel but reported by the host country may not match trade reporting if the catch does not move through the customs boundary. These instances generate excess apparent consumption.

Bilateral trade data

We use the CEPII BACI world trade database, which is a reconciled version of the UN Comtrade database 49 . Trade data are reported to the UN by both importers and exporters following the HS codes. The HS trade code system organizes traded goods into a hierarchy, with the highest level represented by two-digit codes (e.g., Chapter 03 covers “Fish and Crustaceans, Molluscs and Other Aquatic Invertebrates”), which are broken down into 4-digit headings (e.g., heading 0301 covers “Live fish”), which are then subdivided into 6-digit subheadings (e.g., subheading 030111 covers “Live ornamental freshwater fish”). National statistics offices may further subdivide HS codes into 7- to 12-digit codes but since these are not standard across countries, the HS 6-digit codes are the most highly resolved trade codes available globally. HS codes are administered by the World Customs Organization, which updates the codes every five years. HS versions can be used from their introduction through the present, meaning that the HS 2002 version provides a time series of trade from 2002 to the present whereas the HS 2017 version only provides a time series back to 2017. Notably, HS version 2012 included major revisions to the HS codes relevant to fisheries and aquaculture products.

CEPII reconciles discrepancies in mirror trade records, which occur in around 35% of observations (for all traded commodities), by first removing transportation costs and using a weighting scheme based on each country’s reporting reliability to average discrepancies in reported mirror flows. BACI data focuses on trade flows between individual countries since 1994 and therefore drops flows within some groups of countries (e.g., Belgium-Luxembourg) to ensure consistent geographies. The resulting data set covers trade for over 200 countries and 5,000 products. Further details on the BACI data set are available in ref. 49 . While BACI resolves many data issues contained in the raw UN Comtrade database, it does not correct for all implausible trade flows, which can especially arise if one country misreports a value and the partner country does not report a value 50 . Further, there are instances where one country reports on trade that is optional, and the partner country does not. Here, we do not identify and re-estimate any values reported in BACI. Excessively large exports will generally result in high error terms, while high imports will result in high apparent consumption.

Trade statistics are managed by each territory and generally guided by the Kyoto Convention. For the purposes of trade data reporting, imports and exports represent all goods that add or subtract, respectively, from the stock of material resources within an economic territory, but not goods that merely pass through a country’s economic territory. The economic territory generally coincides with the customs territory, which refers to the territory in which the country’s customs laws apply. Goods that enter a country for processing are included in trade statistics. Goods that pass through a country “in transit,” including those that are transshipped, are not recommended to be reported in trade statistics, though there are exceptions 51 and known instances where one country reports trade that is “in transit” but the partner does not, which creates discrepancies that are not corrected for within BACI. Fishery products from within the country, the country’s waters, or obtained by a vessel of that country are considered goods wholly produced in that country. Catch by foreign vessels and catch by national vessels on the high seas landed in a country’s ports are recorded as imports by the country the products are landed in and as exports by the foreign nation, where economically or environmentally significant. For further trade statistic guideline details, see ref. 51 .

Live weight conversions

To satisfy a mass-balance problem, it is critical for the mass to be in the same units. However, trade data is generally reported in terms of the product weight (i.e., net weight), whereas production data is generally reported in the live weight equivalent. To convert product weight to the live weight equivalent, we include live weight conversion factors. We compiled live weight conversion factors from the European Market Observatory for Fisheries and Aquaculture Products (EUMOFA) 52 and national and international governmental reports. EUMOFA is updated annually and reports live weight conversion factors by CN-8 product code, the first 6 digits of which align with HS 6-digit codes, offering full coverage of traded aquatic food products. Therefore, we calculated the mean live weight conversion factor for each HS 6-digit code and drew most heavily from these values in the model. National and international reports that include live weight conversion factors often specify species-product form combinations, allowing us to better capture differences in product yields for different species. For national and international reports, we extracted the species name or categorized observations into taxa groups and identified the type of processing. To avoid double counting in the mass-balance model, we can only track the primary product. Consequently, we assign all co-products and byproducts a live weight conversion factor of zero, which effectively removes them from the model. Additionally, we assigned live animal trade a live weight conversion factor of 1 and assigned fishmeal an average value of 2.98 53 .

Live weight conversion factors are an important source of uncertainty and error for studies conducting mass-balance analyses with trade data. There are several important limitations of live weight conversion factors: (1) only one value per product code can generally be used despite the fact that some product codes include forms with vastly different live weight conversion factors (e.g., bivalve codes that include both shell on and shell-off products); (2) the species is often not specified, and even when it is, live weight conversion factors vary for individuals of different sizes; and (3) source of the data and information on the country and time point for values are often omitted, which represents a problem because there is known geographical and temporal variation in live weight conversion factors due to differences in processing technology.

All conversion factors were reported as live weight-to-product weight ratios. These conversion factors were mapped onto possible species-to-commodity or commodity-to-commodity conversions, described below. For commodity-to-commodity conversions, we estimate the conversion factors (i.e., processing loss rate) as the additional mass lost when converting from the live weight to the original product form relative to converting from the live weight to the processed product form. This can be calculated as the live weight conversion factor for the original product form divided by the live weight factor for the processed product form. We assume that mass cannot be gained through processing and therefore impose a maximum value of one to this ratio.

Seafood production and commodity conversion

For each country-year-HS version combination, we estimate the proportion of each species going into each commodity and the proportion of each imported commodity processed into each other commodity. Each species can only be converted into a subset of the commodities. For example, Atlantic salmon, S. salar , can be converted into whole frozen salmon or frozen salmon filets, but cannot be converted to a frozen tilapia filet. Similarly, each commodity can only be converted to a subset of other commodities through processing. For example, whole frozen salmon can be processed into frozen salmon filets, but not vice versa and neither salmon commodity can be converted to a tilapia commodity through processing. Defining possible conversions restricts the solution space to realistic results and improves estimation by reducing the number of unknowns. We describe this assignment process in detail below.

Taxonomic group to commodity assignment

A single commodity or product could include multiple species (e.g., a salmon fillet code could include multiple species of salmon) and a single species could be processed into multiple product forms (e.g., salmon fillets, whole salmon, or canned salmon). This creates a many-to-many matching problem. To match species to their appropriate codes, we extracted taxonomic information from each HS code and drew upon the taxonomic information for each species name appearing in the FAO production data. Additionally, we drew upon the HS system hierarchy to create matches for species “not elsewhere considered” within a given heading level.

To ensure species groups were matched to the correct 4-digit heading, we divided all species into finfish, crustaceans, mollusks, and other aquatic invertebrates. Within each group, we matched species to 6-digit codes according to the following:

Explicit taxa match—species or higher taxonomic information related to the species is included in the code description.

NEC match—species that fall within a 4-digit heading but are not included as an explicit taxa match within that heading are matched to the associated “not elsewhere considered” (NEC) code.

NEC by taxa match—the same matching logic as an NEC match, but restricted to a specified taxonomic category (e.g., Salmonidae, NEC).

Broad commodity match—if no specific taxonomic information is included, then the match occurs based on the broad taxonomic groups.

Aquarium trade match—species that have been identified as part of the global aquarium/ornamental trade 54 .

Fishmeal—assigned to fishmeal codes if at least 1% of production goes to fishmeal production globally during the study period based on the end-use designation from Sea Around Us production data 55 . Although an estimated 27% of fishmeal is derived from processing by-products 3 , the species, geographical, and temporal variation in that estimate is currently unknown. Consequently, fishmeal is currently treated as sourced from whole fish reduction. This does not affect the total trade or trade patterns of fishmeal but does result in an overestimate of the proportion of production going to fishmeal in cases where by-products are used.

After all species are matched to the appropriate HS codes, we use the list of species to define codes as inland, marine, diadromous, or mixed. Higher-order taxonomic groups are then only matched with HS codes that include their habitat. For example, the production of inland Actinopterygii is matched with codes that include inland species that fall within Actinopterygii , but not with exclusively marine codes, even if they contain species that fall within Actinopterygii .

Commodity to commodity processing assignment

As with the species-to-commodity assignment, the commodity-to-commodity assignment is a many-to-many data problem. Here, one commodity can be processed into multiple other commodities (i.e., frozen salmon can be processed into salmon filets or canned salmon), which also means one commodity could have come from multiple other commodities. To create these assignments, we established rules for which product transformations are technically possible. First, a product cannot transfer outside of its broad commodity group (e.g., fish, crustaceans, mollusks, aquatic invertebrates). Second, where a more refined species or species group was given (e.g., tunas, salmons, etc.) a product cannot be transformed outside that group. Third, products are classified in terms of their state (e.g., alive, fresh, frozen, etc.) and presentation (e.g., whole, fileted, salted/dried/preserved meats, reductions such as fish meal and fish oil, etc.) and cannot be converted into less processed forms (e.g., frozen salmon filets cannot turn into a frozen whole salmon). Fourth, specific commodities (i.e., mentioning specific species) and NEC commodities can become broad commodities (where appropriate), however, broad commodities cannot become more specific or NEC commodities.

Country standardization and regions

The FAO production and BACI trade datasets do not share the same set of countries and territories. For the production and trade data to balance, it is important for the set of territories falling under a given name to align across the datasets. To avoid instances where, for example, production is reported under a territory, but trade is reported under the sovereign nation, we generally group all territories with the sovereign nation. As countries gain independence, they are added as a trade partner in the database. Due to this country standardization circular flows may occur when a sovereign nation trades with their territory. These circular flows are filtered out of the standardized BACI trade flows (i.e., internal trade is not included).

Network estimation

Estimating species bilateral trade flows occurs in two steps: first, solving the national production-trade mass balance, and second, converting reported commodity trade flow estimates to species trade flow estimates based on the estimated species mix going into each domestic and foreign exported commodity.

National mass-balance

We start with the fact that exports must equal production and imports, minus consumption. Since exports are reported as commodities, we solve this mass balance problem in terms of commodities. Production data are reported for each species, so we estimate the elements of a matrix that represents the proportion of production going into each commodity. Since an imported commodity can be processed and exported as a different commodity, we also estimate the proportion of each import being converted into a different commodity. Then for a given country,

If \(n\) is the number of species and \(m\) is the number of commodities, then: \({V}_{1}\) is a sparse \((m\times n)\) matrix with product conversion factors corresponding to the unknowns in \(X\) ; \(X\) is a sparse \((m\times n)\) matrix of the proportion of each species in each commodity; \(p\) is a vector of domestic species production \((n\times 1)\) ; \({V}_{2}\) is a sparse \((m\times m)\) matrix with product conversion factors corresponding to the entries of \(W\) ; \(W\) is a \((m\times m)\) matrix of the processed imported commodities; \(g\) be a vector of imports \((m\times 1)\) , \(c\) is a vector of domestic consumption \((m\times 1)\) , and \(\epsilon\) is a vector of error terms \((m\times 1)\) .

We compiled reported values for \({V}_{1}\) , \({V}_{2}\) , \(e\) , \(p\) , and \(g\) , and estimated the entries of \(X\) , \(W\) , \(c\) , and \(\epsilon\) . We first converted this problem to a system of linear equations. Using the property that \({{{\rm{vec}}}}({ABC})=({C}^{T}\otimes A){{{\rm{vec}}}}(B)\) , we can create \({A}_{b}=({y}^{T}\otimes {D}_{m}){D}_{V}\) , where \({D}_{m}\) is a diagonal matrix of ones, with dimension \(m\) and \({D}_{V}\) is a diagonal matrix with the elements of \({{{\rm{vec}}}}(V)\) . The vector of unknowns is then \({x}_{b}={{{\rm{vec}}}}(Z)\) . We then solve this system of equations with a quadratic optimization solver such that the mass balance equalities are satisfied, trade codes with higher species resolution in \(X\) are prioritized, and the elements of \(X\) , \(W\) , and \(c\) are otherwise relatively even (i.e., we assume an even distribution of production among commodities unless the data suggests otherwise), that \(\epsilon\) is as small as possible (i.e., minimize the error), and all unknowns are greater than or equal to zero.

Positive error terms represent situations where reported production and imports cannot explain exports. This can occur due to under- or un-reported production or imports, over-reporting of exports, errors in the live weight conversion factors, or inconsistencies in the year production and trade are attributed to.

We solve the mass-balance problem for each country-year-HS version combination using the Python package “solve_qp.” The estimated species mixes in national production ( \(X\) ), processing of imports ( \(W\) ) and the error term ( \(\epsilon\) ) are passed to the next stage of the analysis.

Converting the product trade network to a species trade network

First, we compute the mix of species going into each trade code for each country’s domestic exports. To do this, we reweight \(X\) so it represents the proportion of each species in each code rather than the proportion of production of a species going into each product. Each country’s estimated \(X\) matrix is multiplied by \(p\) to get the mass of each species in each commodity. The total mass of each commodity is found by summing all the species volume grouped by commodity and the proportion of each species within a commodity is then calculated by dividing all volumes by their respective commodity mass totals.

Each country’s exports can be sourced from domestic production, imported products that are subsequently exported, with or without processing (i.e., foreign exports), or from an unknown source (i.e., error exports). Since the mix of these sources cannot be derived from the mass balance equation alone, we calculate a range for sourcing following 33 . We calculate the maximum possible domestic exports by taking the minimum between the domestic production and total exports. Similarly, we calculated the maximum volume of exports sourced from imports, by taking the minimum between each product’s imports (accounting for processing estimated by \(W\) ) and exports. The minimum domestic exports are calculated as the minimum between production and the difference in exports and the maximum calculated foreign exports, with the remainder as error exports (minimum foreign exports are calculated in an analogous way). The above results represent midpoint estimates.

For these three estimates (maximum, minimum, and midpoint) we calculate the domestic and foreign weights by dividing domestic export values and foreign export values by total export. We then distribute each country’s exports into domestic, foreign, and error exports by multiplying exports by domestic, foreign, and error proportions (Fig.  S8 ). For each export source, we apply a different species mix to each HS code based on the estimated source country. For domestic exports, we use the exporting country’s estimated \(X\) matrix (Fig.  S9 ). For error exports, the geographical origin is unknown and may arise from unreported production, so we cannot meaningfully assign a species mix to the code. Consequently, we identify the lowest taxonomic resolution common to all species within the code and assign that name to the trade flow.

For foreign exports, we trace the origins back in the supply chain a maximum of three steps (i.e., producer to the intermediate exporter to final exporter to final importer), with any remaining foreign export or flows less than 1 tonne left as “unknown” source (Supplementary Fig.  8 ). The small flows left unresolved comprise around 1% of total trade (Supplementary Fig.  8 ). To link an export of foreign origin to its source country, we use a reweighted version of \(W\) to estimate the original imported product codes and connect those to their source country, using a proportional breakdown of each country’s imports of that code. Foreign exports of one country that originated from foreign exports of another country are isolated and undergo the process above to identify the source country. The species mix for foreign trade flows is based on either the source country’s estimated \(X\) matrix or the method described above for error exports (Supplementary Fig.  9 ).

Network post-estimation processing

Once the species trade flow network is built, we remove all volumes traded below 0.1 tonnes, as the multiplication by small proportions generates overly specific, and likely unrealistic, small flows.

Next, to generate a complete time series, we need to compile estimates from across the HS versions. All HS versions are reported since they have been created, for example, HS96 reports trade from 1996 until the present. However, the more recent HS versions generally include more specific trade codes and therefore are preferred over older versions. It takes a few years before an HS version is fully adopted, resulting in lower total trade volumes for the first few years an HS version is available compared to the previous HS versions (Supplementary Fig.  7 ). To provide the most accurate representation of trade, we create a continuous time series by adopting the most recent HS version available after its total trade has met up with the total trade reported under previous HS versions. This results in HS96 being used for 1996–2004, HS02 for 2004–2009, HS07 for 2010–2012 and HS12 for 2013–2020.

To check the reasonability of estimated trade flows, we first confirmed that all trade flows sum to the original BACI trade flows when grouped by exporter, importer, year, and HS code and expressed as product weight. Note that some flows are slightly lower due to the 0.1-tonne threshold (maximum difference of 72 tonnes representing a percent difference of 0.19%). Second, we confirmed that the estimates from the mass balance problem satisfy the problem constraints. Third, we checked that domestic exports of species in live weight equivalent do not exceed the production of that species. Fourth, we confirmed that exports of foreign sources do not exceed imports of that species. Only 1.4% of cases across all years showed a country’s foreign export of a species exceeded the total import of that species.

The model was implemented in R and all packages used are listed in Supplementary Table  1 .

Calculation of apparent consumption (supply)

The species trade network and FAO production data were used to calculate national apparent consumption by scientific name, habitat, and method for each year.

First, domestic production of products is estimated by multiplying production data by the corresponding estimated \(X\) matrix. We then calculate domestic consumption by subtracting domestic exports by HS code from domestic production of products. Domestic consumption by species is then derived based on the volume of domestic consumption and the estimated species composition for the associated code.

Foreign consumption represents the quantity of product imported that was consumed in the country (i.e., not subsequently exported). To calculate foreign consumption, we subtract foreign exports from the quantity of processed imports. Processed imports represent the quantity of each product, by HS code, available after accounting for processing, by multiplying the appropriate estimated \(W\) by the import vector \(i\) . We convert processed imports to live weight by multiplying by the live weight conversion factor. To distinguish human consumable products, we filter out all products not destined for direct human consumption.

Finally, we disaggregated foreign consumption of processed HS products to species. We assume the species and trade sourcing distribution of foreign consumption of a given code is proportional to the species distribution of the original imported HS products from which a final code was sourced based on the estimated species trade network. We therefore disaggregate foreign consumption by multiplying foreign consumption by the trade flow proportions of imports across all trade partners and species information.

Since apparent consumption is based on a disappearance model, estimated values are subject to multiple sources of error. Due to discrepancies in production and trade reporting for select countries (e.g., as arises with joint ventures), a few countries had unrealistically large estimated per capita consumption. For country-specific consumption estimates, we capped total per capita consumption to 100 kg, as this is slightly above the upper estimate FAOSTAT 25 . We then adjusted the supply by export partners, scientific name, production method, habitat, and source country for those countries proportionally. A second factor that influences estimated apparent consumption relates to the approach for removing non-human consumable products, particularly the domestic production and use of fishmeal. While we base our estimates on the species mix entering HS code 230120, this is estimated based on exports and domestic use patterns could diverge, leading to errors in the volume removed. Additionally, since many species can enter code 230120 and there is limited empirical data to inform volumes of species entering fishmeal by country, there is greater uncertainty in the exact species mix, and therefore greater uncertainty in the species volumes to exclude from direct human consumption calculations.

Reporting summary

Further information on research design is available in the  Nature Portfolio Reporting Summary linked to this article.

Data availability

All input data, key intermediate data files, and data files required to reproduce these figures/results are archived in Zenodo ( https://doi.org/10.5281/zenodo.10034319 ). All input data for running the full ARTIS model are archived on KNB ( https://doi.org/10.5063/F1862DXT ) and the full ARTIS database is archived on KNB ( https://doi.org/10.5063/F1CZ35N7 ).  Source data are provided with this paper.

Code availability

The code to reproduce all results and figures is available at https://github.com/jagephart/ms-seafood-globalization and an archived version is available on Zenodo ( https://doi.org/10.5281/zenodo.10034319 ). The code for the model underlying the ARTIS database is available at https://github.com/Seafood-Globalization-Lab/artis-model/releases/tag/v1.0 and an archived version is available on KNB ( https://doi.org/10.5063/F1CZ35N7 ).

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Acknowledgements

We thank Sauleh Siddiqui and Ian Carrol for their input on the model development and Tess Geers for their comments on the manuscript. J.A.G., C.D.G., and R.A.B. received support from the National Science Foundation (NSF HNDS-I 2121238). J.A.G., A.G., C.D.G., and R.A.B. received support from the Environmental Defense Fund. J.A.G., R.A.B., and K.D.G. received support from Oceana and Seafood Watch. J.A.G. received additional funding from the Kenneth K. Chew Endowed Professorship in Aquaculture. K.L.N. received funding from the L’Oreal for Women in Science Fellowship.

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Jessica A. Gephart

Department of Environmental Science, American University, Washington, DC, USA

Rahul Agrawal Bejarano & Kelvin Gorospe

School of Environment and Sustainability, University of Michigan, Ann Arbor, MI, USA

Rahul Agrawal Bejarano

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Alex Godwin

Department of Nutrition, Harvard T.H. Chan School of Public Health, Boston, MA, USA

Christopher D. Golden

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Rosamond L. Naylor

Centre for Marine Socioecology, University of Tasmania, Hobart, TAS, Australia

Kirsty L. Nash

Department of Environmental Sciences, University of Virginia, Charlottesville, VA, USA

Michael L. Pace

Beijer Institute of Ecological Economics, The Royal Swedish Academy of Science, Stockholm, Sweden

Stockholm Resilience Centre, Stockholm University, Stockholm, Sweden

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The ARTIS database was conceptualized by J.A.G. and analysis of the database was conceptualized by J.A.G., C.D.G., R.L.N., and M.L.P. The methodology, software, formal analysis, and data curation were conducted by J.A.G., R.A.B., and K.G. The contribution to the visualizations presented by J.A.G., R.A.B., and A.G. The original draft was prepared by J.A.G., R.A.B., and K.G. The contribution to the review and editing by J.A.G., R.A.B., K.G., A.G., C.D.G., R.L.N., K.L.N., M.L.P., and M.T. The funding for this work was acquired by J.A.G., A.G., and C.D.G.

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Correspondence to Jessica A. Gephart .

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The Authors declare the following competing interests: J.A.G., C.D.G., and R.L.N. are members of the Oceana Science Advisor Board. The remaining authors declare no competing interests.

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Gephart, J.A., Agrawal Bejarano, R., Gorospe, K. et al. Globalization of wild capture and farmed aquatic foods. Nat Commun 15 , 8026 (2024). https://doi.org/10.1038/s41467-024-51965-8

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DOI : https://doi.org/10.1038/s41467-024-51965-8

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