Their significance is to be found in their recognition that global economic liberalisation may, without substantial reform, contain within it the seeds of its own downfall. In this context, it is the aim of this paper to set out--in stylised rather than systematic form--some of the major elements of a cost-benefit analysis of globalisation. .
The benefits--especially enhanced aggregate economic welfare--are better understood than the costs. While the costs are in many ways the other side of the benefit coin, what they are, and what their impact might be, remains hotly contested. It is for this reason that this paper focuses primarily on the costs. In so doing, it will address three general charges often laid at economic globalisation's door: (i) That it is widening the income gap between rich and the poor and generating uneven development both within states and between states; (ii) that economic liberalisation has proceeded too rapidly and this has led market failures, especially in financial markets of the type that have subsequently led to the financial crises of the last couple of years and the ensuing destabilisation of fragile political regimes; (iii) that globalisation is undoing the social bond that has held nation states together as they have developed in the post Westphalian era. .
The first two charges are the stuff of current popular and populist analysis of the international political economy of globalisation qua economic liberalisation. They find most resonance in developing countries, and especially those states of Southeast Asia for whom recent economic crises have brought back shades of the north-south contest between the developed and developing world that dominated the international agenda in the 1970s but largely disappeared throughout the 1980s and 1990s. They represent one side of a long standing ideological argument between advocates of a laissez faire capitalism on the one hand and a more dirigiste-cum-Keynesian approach on the other.
