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The term "globalization" refers to the increase in international, cross-border interdependence in many areas, such as economy, politics, culture, environment, communication, between individuals, societies, institutions and states. Economists utilise a number of macro-economic indicators in an attempt to measure the relative performances of individual country, region and sector economies. The greatest failing of these indicators is their inability to account for intangibles.


Globalisation is complex multidimensional process of delimitation and despatialisation, on the one hand, and of concentration and networking on the other [Tetzlaff, 2000, p. 24].

Globalization can be viewed as expansion, intensification, acceleration and increase in efficiency in a global process of interconnection, encompassing all dimensions of social life, cultural and criminal, financial, political, intellectual and media dimensions. [Held et al., 1999, S. 16]

[Gabler Business Lexikon] General: Form of the strategy of a cross-border enterprise in which competitive advantages are to be built around the world by exploiting location advantages and achieving economies of scale. Environmental policy: Tendency to intensify global interdependencies in economic, political, cultural and information technology areas. Ethics: globalization leads to an increase in both cooperation opportunities as well as conflicts of interest (competition).

Globalization leads to two opposing reaction patterns: On the one hand, the globalization of economics and the universalization of cultures and value systems, on the other hand of fragmentation and new fundamentalism and nationalism. [Grobbauer et al, 2012].

Criticism: the traditional/religious perspective views the Western (modern) world and its values as basically negative and reprehensible - The prosperity of the West changes the value systems in developing countries and gives rise to completely unfulfillable expectations. On the other hand, criticism comes from the camp of the fundamental enemies of capitalism, with elements of the class struggle, on the assumption that globalization imposes a model that they in principle reject. [Friedrich M. Zimmerman, Nachhaltigkeit Wofür, p. 88]

Coase Theorem

The Coase Theorem proposes that there would be a point of maximum efficiency, where the marginal benefits of pollution control equal the marginal costs of pollution control.

Coase Bargaining graph
This graph illustrates the simple principle that initial pollution control investment usually results in cost-effective returns. Attempts to reduce pollution beyond point Q are inefficient in terms of the investment to returns ratio.

Up to that point, it is worth investing in reducing pollution or its effects; beyond the efficiency point, the costs outweigh the potential benefits.

GNI Gross National Income

GNI Gross National Income is a measure of the performance of a national economy. It is calculated from the total of the domestic and foreign output of residents, subtracting the domestic income of non-residents.

GNI is used by the European Union to determine the performance of member state economies, from which contributions to the EU budget are calculated, on the basis of a uniform percentage rate applied to the total of member states' GNIs. Currently, the average GNI is around € 25 000 per capita in Europe.

Analysts can gain an insight into national economic trends by comparing the GNI index with the GDP. Favourable GNI rates against GDP indicate a growth in capital creation. A decrease in the GNI/GDP ratio would indicate a 'leakage' of capital creation abroad.

Gini coefficient

The Gini coefficient or ratio was created by Corrado Gini in 1912. It measures inequality through statistical dispersion, and is the most-used benchmark for income disparity within nations.

A Gini coefficient of one (100%) is a hypothetical situation where one person owns all wealth, and zero would be a perfectly uniform distribution of all wealth.

Some examples of Gini coefficients (%):

  • OECD average: 33
  • USA: 41
  • UK: 33
  • Switzerland: 32
  • Germany: 30
  • Japan: 32
  • Mexico: 48
  • Lowest Gini coefficient in the OECD: Slovenia 25.6
  • Highest Gini coefficient in the OECD: Chile 50