From Globaloney to De-Globaloney

From Globaloney to De-Globaloney

By Dr Ashish Lall | April 21 2020, 3:52 PM SGT

 

Some may remember books like The Death of Distance (1997) and The World is Flat (2005). Apparently, we were in a globalized world and the internet had ‘levelled the playing field’. In contrast, I suspect a 2001 Harvard Business Review article (Distance Still Matters: The Hard Reality of Global Expansion) by then Harvard Business School Professor Pankaj Ghemawat was less read and less hyped. Ghemawat used hard data on not just trade, investment and capital flows, but also on Twitter followers, Facebook friends, international tourists, students and telephone calls etc. to show that we were living in a semi-globalized world. There were geographic, political and cultural barriers at play. And these have become very apparent in the present crisis. Western democracies can supposedly only learn from other Western democracies and not Asian Democracies. There is a culture against wearing masks in Western countries, and now there is a resistance to using Apps for contact tracing due to differences in privacy perceptions. Hopefully the coronavirus, which is way ahead of science, and disregards political, ideological and cultural barriers will teach us that we are all in the same soup and should learn from global best-practice to avoid protracted lockdowns. Good ideas can come from anywhere.

Ghemawat called the “elevated perceptions” of the depth of globalization: Globaloney. He conducted numerous surveys, of U.S. adults differentiated by age, gender, education attainment, income and other characteristics. He asked them to guess the depth of globalization on nine socio-economic indicators. The ratio of perception to reality averaged over the nine indicators was the Globaloney Index. In the U.S. guesses were 4.5 times as large as actual values. Ghemawat also surveyed 3000 students from 138 countries who took his MOOC course on Coursera. The Globaloney Index was 4.8 – Globaloney was a global phenomenon!

Here are some other results reported in his 2017 book (The Laws of Globalization and Business Applications). Young adults have a higher Globaloney index (5) than those above 60 (4.6). Students in emerging economies have a higher globaloney index (4.9) than students in advanced economies (4.6). High school graduates have a higher globaloney index (5.5) versus master’s graduates (4.5). And much to the disappointment of the Harvard Business School Professor, MBAs don’t have a lower globaloney index than those with a similar education in another field.

Not only is there a general bias, but those with exaggerated perceptions about globalization also tend to be more concerned about the apparent negative social consequences such as income inequality and global warming.

Now it appears the pendulum has swung to the other extreme. According to ‘experts’ and media ‘gurus’, the Coronavirus will either kill or reverse globalization. No – we will still be in a semi-globalized world. Domestic value creation accounted for about 80% of world GDP in 2017. If Professor Ghemawat repeated his survey now, he may find that we have moved from Globaloney to De-Globaloney.

Note: Professor Pankaj Ghemawat is at the NYU Stern School of Business and the DHL Global Connectedness Index is based on his work.

Ashish Lall has a PhD in Economics from Carleton University in Ottawa. He has taught at both Nanyang Business School (NTU) and the LKY School of Public Policy (NUS) and is presently Senior Advisor at ps-engage Global Government Relations. 

Image credits: iStockphoto

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