• 1

  • Likes

Globalisation can be summarised as the global circulation of not only goods, services, and capital, but also of information, ideas, and people. Its root lies in the concept of comparative advantage (Ricardo, 1817). The theory demonstrates that if two countries, each producing two commodities engage in trade with each other, then each country will increase its overall consumption by exporting the good for which it has a comparative advantage, provided there are differences in productivity between the two countries. This holds true for goods and services, and for information as well. Thus, the countries are able to gain more by being part of a globalised world. However, if the approach is beneficial for all then why are we witnessing signs of de-globalisation in Donald Trump’s victory and Britain’s exit from the European Union? It is important to understand the reasons for this shift from globalisation to de-globalisation. This article talks about the various factors – both economic and political – that are causing this shift. The article focuses on factors that are responsible for de-globalisation in developed economies only as other countries haven’t been yet been affected by this shift.

In 1990, just before India started pursuing policies of liberalisation, privatisation and globalisation, its GDP was estimated to be $ 326 billion whereas that of United States was $ 5.9 trillion. By 2015, India’s GDP was $ 2 trillion whereas that of United States’ was $ 18 trillion. In nominal terms, the gap might have increased but in proportional terms, India’s growth is significant. In 1990, India’s GDP used to be one-eighteenth of the United States’ GDP but in 2015 it is one-ninth of United States’ GDP. If we compare with that of United Kingdom then the figures are even more surprising. UK’s GDP has grown from $ 1 trillion to $ 2.8 trillion in the same time as India has grown from $ 326 billion to $ 2 trillion. India is just an example. Developing nations like India, China and Japan have grown rapidly over the last few decades. The economic power has been shifting from the West to these Asian Nations. This has not only worried Western policy makers but also the general public. Although western nations have benefitted immensely from globalisation by expanding the reach of their MNC’s and by the acquisition of talented individuals, public support towards it has been waning fast. Developed nations now have more to lose than to gain. The people of these nations are not against the concept of globalisation but are worried about its consequences.

One of these perceived consequences of globalisation is rising security concerns. Increased exchange and mutual trade between nations have made it increasingly tough to maintain global security. Terrorist organisations like ISIS and Al-Qaeda that are anti-globalisation at their core, use tools of globalisation such as the internet to propagate their agenda. Each terrorist attack that takes place in these developed nations brings more people in support of de-globalisation. The public in the developed nations feels that the consequences of free trade and cooperation with nations is too high. To cut off from rest of the world feels safer. Self-Protectionism seems to be rising. Tackling rising security concerns was a prominent part of Donald Trump’s plan to “Make America Great Again”. His executive order to put a travel ban on six Muslim majority nations, even though criticised and finally revoked, was a step towards Self-Protection and a sign of de-globalisation.

Another factor that plays a role in support of de-globalisation is refugee crisis. The Syrian civil war and constant unrest in western Asian nations have caused a severe refugee crisis. The majority of the citizens from these nations have taken refuge, legally or illegally in European nations. The government of most European countries are burdened with the additional responsibility of providing for these refugees. This is a huge cause of concern for these debt-stricken economies. When these economies are unable to grow or create enough employment opportunities for their own people then the voice against globalisation grows stronger. The United Kingdom’s exit from the European Union is a similar story of self-protectionism and a step towards de-globalisation. It is a significant change in the Eurozone landscape that shakes the very fundamentals upon which European integration is based upon.

Ironically, the reasons that brought about globalisation are now the ones behind de-globalisation. Globalisation created millions of jobs for Americans and provided the perfect platform for expansion of their companies by taking advantage of cheap labour in developing nations, like India. The election of Donald Trump into presidential office is a product of the public orientation towards de-globalisation. He made the public believe that the developing nations have been taking away American jobs thus changing the public sentiment against globalisation. The once advocates of globalisation are now imposing restrictions on free trade. The Donald Trump administration has pulled the United States out of the Trans-Pacific Partnership and has increasingly threatened to put high import tariffs on goods and services.

Although a majority of the nations still support and believe in globalisation today, things may change very soon in the future. When developed countries like the United States and the United Kingdom take a step towards de-globalisation, other developing nations who look up to them may follow suit. Multiple factors are causing this shift from globalisation to de-globalisation. As economic power shifts from the Western to Asian nations, the U.S. and the U.K. have adopted self-protection policies. Rising security concerns and refuge crisis also play a role in creating support for de-globalisation.



  1. Ricardo, D. (1817). Principles of Political Economy and Taxation.
  2. Moyo, D. (2017). US Protectionism and Deglobalisation Spell Inflation. Financial Times Blog. Accessed from http://blogs.ft.com/the-exchange/2017/02/06/protectionism-anddeglobalisation-spell-inflation-and-debt-defaults/?mhq5j=e3
  3. Gross Domestic Product. Data Bank. World Bank. Accessed from http://databank.worldbank.org/data/reports.aspx?source=2&series=NY.GDP.MKTP.CD&countr
  4. Unemployment Rate. U.S. Bureau of Labour Statistics. Accessed from https://data.bls.gov/timeseries/LNU04000000?years_option=all_years&periods_option=specific _periods&periods=Annual+Data
  5. Mandala, R. (2017). Battling de-globalisation. The Indian Express. Accessed from http://indianexpress.com/article/opinion/columns/battling-de-globalisation-donald-trump-indiaus-relations-politics-business-science-4523344/
  6. Gregory, N. (2016). De-Globalisation - The Cycle Is Turning. The Equity Master. Accessed from https://www.equitymaster.com/outsideview/detail.asp?date=12/28/2016&story=1&title=DeGlobalisation---The-Cycle-Is-Turning-Nitin-Gregory

Share this article

Written By Purushottam Mohanty

Economics Undergrad | Delhi University

Leave A Reply