INTER- RELATIONSHIP OF DEMOCRACY AND GLOBALIZATION - A DILECTIC DILEMMA: HOW ONE PROPAGATES THE OTHER

Submitted as per the course requirements of Changing Conception of Justice in the Globalised Legal Order

National Law School of India University

Submitted to:

Prof. Dr. T. Ramakrishna

Course Teacher

Submitted by:
PARUL SINHA PIYUSH RAJPUT ID No. 577and 578, 1st year

ACKNOWLEDGEMENT

With Profound Gratitude and sense of indebtedness we place on record our sincerest thanks to Prof Dr. T. Ramakrishna, National Law School of India University, Bangalore, for his invaluable guidance, sound advice and affectionate attitude during the course of our studies. We have no hesitation in saying that he molded a raw clay into whatever we are through his incessant efforts and keen interest shown throughout our academic pursuit. It is due to his patient guidance that we have been able to complete the task. At the same time we take this opportunity to Thank Mr. Satya Deep, Ms. Arti Priya and Miss Nimrat Kaur for there guidance, we also express our regards to the Library staff for cooperating with us and made available the books for this research paper.

Thank you! PARUL SINHA & PIYUSH RAJPUT I.D. No. 577 & 578 LL.M. 2nd TRIMESTER (BUSINESS LAW)

TABLE OF CONTENTS 1. Introduction 2.

RESEARCH METHODOLOGY

AIM AND OBJECTIVEThe Aim of the topic is to study the concept of globalization, and the impact of the globalization on the democracy. The author shall also seek to establish the interrelationship between globalization and the democracy The objective of the research are as follows1. To study the concept of the globalization 2. To study whether there exists any relationship between the term globalization and democracy. 3. The Project shall make a brief study as to whether or if there exists relationship between he two concepts how the one propagates the other or it hinders one another or is it just a dialectic dilemma.

SCOPE AND LIMITATIONThe field of globalization is vast enough if one goes on to extensive research. Same is the concept of democracy. The scope of the present research shall deal specifically with the interrelationship between the abovementioned two terms and how the one has the effect on another, how one helps in the propagation of another. The concept of globalization and the democracy is so wide that it cannot be covered under one head and therefore the project shall be limited as to how the globalization in terms of economy and not to the political, social and other aspects of globalization. RESEARCH QUESTION1. Does globalization and democracy are so intervened that they cannot be separated or these two are solely independent concept which intersect or co exist at the same time?

2. Whether in terms of economy does globalization has any effect so as to further the democracy within a nation and promote the same? 3. Does globalization produces more domestic losers than winners, at least in the short run, and it also diminishes the ability of the state to compensate the losers financially? 4. What impact does any regional organisation and its policies has on the promotion of democracy through globalization specially in the context of the least developed countries?

HYPOTHESIS-

RESEARCH METHODOLOGYThe researcher in project has relied on Doctrinal Method of research. This method was considered apt as it is a theory based topic

MODE OF CITATIONA uniform system of citation as per the NLS guide compiled with uniform legal citation, has been adopted by the researcher for the particular paper.

INTER- RELATIONSHIP OF DEMOCRACY AND GLOBALIZATION

Globalization has changed the world in many ways and has brought several countries together. However, as well as bringing countries together in some ways, it has also driven them apart. One of the most controversial changes it has made is to the political culture of many countries around the world. Many scholars such as David Held would agree that democracy is commonly being regarded as the best form of government. However, is globalization solely responsible for the spread of democracy around the world? The concept of democracy is derived from the Ancient Greek term dmokrata which means rule of the people and it defines a form of government in which the supreme power is vested in the people and exercised directly by them or by their elected agents under a free electoral system. This form of government, however, has become increasingly popular since the demise of communism in the late 1980s. Hence it is widely regarded that Democracy is a cornerstone of human dignity and the good society. A public should shape its own destiny, even if some might doubt the wisdom of certain of democratic decisions taken. A society that is not striving after democracy tends to be a less worthy and also more dangerous place.1

Whereas, globalization has also become an increasingly popular process that countries are opening themselves too. The concept was created in the late 1800s by American entrepreneur Charles Russell, but was only popularized in the 1960s by economists and social scientists. Proglobalists would argue it is inevitable for countries to open themselves up to globalization. There are too many benefits and the ones that do not, become isolated from the rest of the world. In order to examine if globalization has led these countries to opt for a democratic form of government and if so, what the reasons were behind it.

Many scholars would agree with the idea that globalization poses a threat to the democratic state instead of aiding its expansion. It is believed that it undermines the essential requirements of
1

Scholte, Jan Aart. Globalization: A Critical Introduction.New York, USA.: Palgrave Macillan, 2005.

state autonomy, patriotism and national identity.2 For this reason, it could be argue that political globalization could be a contradiction in terms. One of the anti-globalist theories is that globalization is causing the decline of the nation state, as governments no longer have control over their economy, their trade and their borders. Nation states may have in the past been in complete control of their markets, exchange rates and capital. Now, trans-national companies are becoming increasingly imperative to the economy, and the state is becoming obsolete. This supports the argument that globalization is reducing the power of democracy and the state, resulting in hollow democracy. It was believed that while globalization promotes opportunity for growth and increase in wealth, it has also increased the socio-economic disparity between people, making nations less democratic and progressively more ruled by the wealthy multi nationals. This means that governments now try and compete for foreign capital and design their policies to please global investors and firms, who may not act in the best interest of, nor be held accountable to, the voters. It follows that the level of democracy declines. 3 Also, scholars argue that globalization cripples even more those who are less fortunate, as previously stated. Companies who are unable to compete with multi nationals on an international scale lose from more economic openness. The results of this loss cause a weakening in the countrys democracy.4

The unfortunate losers in the globalization battle thus, tend to seek support and unity with their identities, usually based on religion or ethnicity. This encourages the prosperous economic winners to maintain their edge over the poorer and reduce their competition. These actions intensify social inequality and undermine the progress democracy has made.5 This inequality, however, is not only carried out on a national scale. Even in the international community, globalization has increased the cleavage between the developed countries from the north and the developing countries from the south.

Bartelson, Jens. Political Globalization. Distinktion: Scandinavian Journal of Social Theory. 2004, available at http://www.distinktion.dk/archive/d8.shtml (accessed March 12th, 2010 3 Quan & Reuveny, Li & Rafael. Economic Globalization and Democracy: An Empirical Analysis . British Journal of Political Science, January 2003: 29-54. 4 Drucker, Peter F. The Age of Social Transformation Atlantic Monthly, November 1994: 53-80. 5 Robertson, Roland. Globalization: Social Theory and Global Culture, London: Sage Publications, 1992.

In international organizations such as the United Nations it is commonly witnessed that the elite wealthy countries always have the final say in conflicts or important issues that are discussed, which ends up swaying the domestic politics of less developed countries to their favour.

Another argument which is made is that in order for a stable and functioning democracy to work, the concept of citizenship and participation must be active and embedded in the population. Globalization has transformed the common citizen into an individual who is more willing to pursue its own economic interest than to be concerned with the content of public policy.6

As observed, there are many reasons as to how globalization has weakened democracy around the world. However, like any controversial issue, it is important to evaluate the two sides of the argument to fully comprehend the implications of the statement. For this reason, there are several claims of notable scholars that defend the idea that globalization has spread democracy around the world. According to Schumpeters Capitalism, Socialism and Democracy globalization has helped promote economic development which has augmented the number of educated and well trained citizens, which has resulted, contrastingly to previous statements, in a decrease in economic inequality. This illustrates the freedom and development of the people in allowing them to prosper from the benefits of globalization.

As previously stated, globalization has increased the power of multi-nationals. However, differently to what has been stated, international businesses demand an increase in democracy. In order for businesses to grow, peace and stability must be entrenched in all potential investment countries. Subsequently, as democratic countries scarcely ever fight with each other, there is an increase in the demand for a democratic form of government. As economic links among states expand, authoritarian countries experience an increase in pressure from trans-national companies for political liberalization. These authoritarian states, as a result of globalization have fewer incentives to cling to power or proceed with their radical policies. Globalization encourages authoritarian states to decentralize power as they hand over their control to make progress for the
6

ODonnell, G. The Browning of Latin America. New Perspectives Quarterly, October 1993: 50-53.

market, which is fundamentally democratic. This concept of allowing the economy to fluctuate is known as laissez-faire, a French expression meaning let it be which allows industries to be free from state involvement in restrictions such as taxes and state monopolies.

Many other advantages of globalization also help promote democracy. The reduction in information and travelling costs mean that people have access to a lot more information not only from their government but from all over the world. This means democracies can now promote their values and ideals to autocratic countries a lot more freely, as autocracies have diminishing control over information.7 Other advantages of globalization reducing borders is that is strengthens the distribution of democratic values over borders. The more democracies border non-democratic countries, the more the chances that country has of becoming democratic.

In addition, with the increase in the demand for human rights and humanitarian interventions in countries which abuse power, democracy is progressively becoming the only alternative to autocratic regimes. As the preponderance of states withholds democratic values, it is expected that any other state that is non-democratic is in violation of human rights as they are not allowing their citizens to voice their opinion and have a say in the way their government is run.

Hence, interventions have contributed to the democratization of numerous countries such as Iraq and several other countries in Sub-Saharan Africa. Currently, international organizations such as the IMF and the World Bank have reformed numerous of these authoritarian countries so that they become potential investment opportunities for multi-nationals, and this is only due to the result of the expansion of globalization to such nations.8

This, however, is one of the main causes of rising military conflict and tensions amongst nations in the international community. Many skeptics and especially countries with alternative values believe that the process of globalization has pressured them into becoming liberal democracies

Hanen, Tatu Van. The Process of Democratization: A Comparative Study of 147 State,.New York: Russak Publications, 1990.
8

Kura, Sulaiman Yusuf Balarabe, Globalisation and Democracy: A Dialectical Framework for Understanding

democratization.Globalization, ICAAP, 2005.

and believing in western capitalist values. Since the beginning of the cold war, there has always been a great tension between the western democracies and the rest of the world. Now, the few countries that do not withhold western values feel threatened and ever more forced into opening their economies and becoming a democratic system.

Globalization encourages democratic institutions which promote democracy. As the global market relies on capitalist democratic values, it is inevitable that organizations that reinforce these values are rewarded meaning they can expand into countries with other forms of government and promote these ideals. Hence, the increase involvement of INGOs and other businesses furthers the transparency and liability of institutions that reduce state intervention, all which facilitate democracy. Western policymakers and nongovernmental groups trying to promote greater political liberalization have placed their faith in the indirect effects of globalization. An authoritarian government agrees to a global regime to gain benefits of one sort but is forced to accept the political consequences that follow.9

Dalpino,Catharin E. Does Globalization promotes Democracy?: An early assessment Brookings. September 2001.

IMPACT OF ECONOMIC GLOBALIZATION ON DEMOCRATIZATION.

Since, developing countries have made tremendous progress toward democracy over the last decade. Particularly since the late 1980s, 70% of less developed countries (LDCs) made substantial efforts to expand political freedoms. Significantly, these important political advancements came at the heels of a more sweeping transformation that occurred in LDCs in the early 1980s: economic openness in trade and financial markets.

The extent to which political changes occurred after globalization pressures hit LDCs provides immediate credibility to policy makers who have long assumed that globalization leads to improvements in democracy. Yet, despite these developments, human freedom is still under threat in the developing world (Human Development Report 2002). Several countries that took important steps toward democracy during and before the early 1980s have since become more politically repressive (e.g., Pakistan, Peru, Venezuela, and Zimbabwe).

More countries (including India, Guatemala, Ghana, Thailand, Argentina, and Turkey) seem to vacillate, sometimes expanding political freedoms and sometimes contracting them. In fact, in the 59-country only one country consistently maintained the highest level of democracy (Costa Rica), while almost 30% of LDCs witnessed a decline in democratic rights since globalization took root in the 1980s. In the time span between 1995 and 2005 eight out of the 30 established democracies show a (non-linear) decline in their quality over time. In the remaining 22 countries there was a (non-linear) positive development between 1995 and 2005.

The impact of economic globalization on the democracy can be analyzed in the sense that globalization seems to have a positive impact on the quality of democracy. However, it is foremost the economic openness and not the political internationalization that positively affects the quality of democracy. It is worth noting that one of the control variables inflation also exerts an influence on the quality of democracy. Apparently, economic crisis in terms of inflation diminishes the quality of democracy.

The quality of democracy seems to develop better in countries that in terms of their age can be considered stable democracies. Additionally, the stability of a country amplifies the impact of economic openness: the older a democratic regime is, the better it seems to be capable of taking advantage of economic globalization for the further development of its quality of democracy.

However, the positive impact of economic globalization decreases over time. Furthermore, considering the current state of worldwide economy, the finding that economic crises seem to have a negative impact on the quality of democracy is alarming. More and especially more detailed analyses are needed to examine this issue.

For example, the negative impact of inflation on the development of the quality of democracy is absorbed in stable democracies. The age of a democracy seemingly also helps to overcome financial crises. This finding questions to some degree the optimistic view: globalization indeed can be seen an opportunity for democracy and enhance its quality. However, established and stable democracies seem to profit more by open markets than younger democratic regimes. Globalization Has No Impact On Democracy

Since, the world economy is not as integrated as commonly believed. Most international trade takes place within geographical regions, MNCs typically have a home bias, and most foreign direct investment (FDI) concentrates in a few countries. Since the LDCs generally do not participate in the global economy, the effect of their economic openness on their democracy should not be large to begin with. Since the DCs are already stable democracies, globalization will not affect their levels of democracy.10

10

F. Scharpf, Crisis and Choice in European Social Democracy (New York: Cornell University Press, 1991); Jones, Globalization and Interdependence in the International Political Economy ; Robert Wade, 'Globalization and its Limits', in Susanne Berger and Ronald Core, eds, National Diversity and Global Capitalism (New York: Cornell University Press, 1996), pp. 60-88; Paul Hirst and Grahame Thompson, Globalization in Question: The International Economy and the Possibilities of Governance (Cambridge: Polity Press, 1996); Paul Hirst, 'The Global Economy: Myth and Realities', International Affairs, 73 (1997), 409-25.

There is also an assertion that globalization does not necessarily render the welfare state powerless. Increased national economic openness originates from the deliberate choices of states. Governments still exert considerable control over their own economies.

Moreover, the modern welfare state is still effective because it provides important collective goods under-supplied by markets (such as social stability, property rights, infrastructure) and compensates the losers from economic openness. By implication, one can argue that the level of democracy does not necessarily have to decline with economic openness.11

According to a third view, the effects of globalization vary across countries, depending on government policies, a country's location in the global pecking order, the domestic political institutions, the identity of the domestic winners and losers, whether economic sectors are privatized or not, and the current level of democracy. For example, though globalization-induced economic crises may force the exit of authoritarian regimes in favour of a democracy, these crises, if managed effectively, may instead increase the public support for authoritarian leaders. Hence, the effects of globalization on democracy may not be uniform.12 In sum, the assumption that globalization doesnt affect democracy, depicts that globalization is a buzzword, whose effect has been over exaggerated. Trade openness and portfolio investment inflows exert negative affect on democracy. The negative effect of trade is constant over time whereas the effect of portfolio investments strengthens. FDI inflows affect democracy positively, but the effect weakens overtime. The spread of democratic ideas promotes democracy persistently over time. Theses patterns hold for

11

R. Vernon, Sovereignty at Bay (New York: Basic Books, 1971); P. Kurzer, Business and Banking: Political Change and Economic Integration in Western Europe (Ithaca, NY: Cornell University Press, 1993); J. A. Frieden and R. Rogowski, 'The Impact of the International Economy on National Policies: An Analytical Overview' , in R. O. Keohane and H. V. Milner, eds, Internationalization and Domestic Politics (Cambridge: Cambridge University Press, 1996), pp. 25-47; Geoffrey Garrett, 'Global Markets and National Politics: Collision Course or Virtuous Circle?' International Organization, 52 (1999), 787-824. 12 Haggard and Kaufman, The Political Economy of Democratic Transitions; H. V. Milner and R. O. Keohane, 'Internationalization and Domestic Politics ', in Keohane and Milner, eds, Internationalization and Domestic Politics, pp. 3-24; Frieden and Rogowski, 'The Impact of the International Economy on National Policies' ; Longworth, Global Squeeze; L. E. Armijo, 'Mixed Blessing: Foreign Capital Flows and Democracy in Emerging Markets' (presented at Annual Meeting of International Studies Association, Minneapolis, 1998).

all countries and the LDCs alone. In sum, the economic aspects of integration into the world economy are beginning to cause a decline in national democratic governance.

Implications Of Globalization Towards The Least Developed Countries Many attempts to make democracy a universally acceptable concept across the globe have been made. On the one hand, some states in the world believe that the process will have positive implications for the achievement of universal goals. On the other hand, it has been viewed as an undemocratic process by those who believe that it is there to exploit rather than to assist.13 Most of the challenges experienced are a result of the differences in the approach to certain issues such as the economic systems. It uses the European Unions policies that are normally used to implement democracy and globalization, especially in Africa. We will examine the impacts that these policies have on Africa. Although the powerful and the most developed countries continue to promote the globalised systems of governance, many obstacles need to be dealt with to achieve these international goals. The developed nations continue to use the traditional paradigms of international relations to get profits from the least developed nations. These outdated approaches result in a failure of the policies that are meant to assist all regions of the world. More so, the developing regions, for instance Africa, are severely affected when such incompatible policies are being incorporated in their development agenda. The new impetus developed in the post-cold war era requires a new political order for the universal economic liberalism to be attained.14 It is worth to note that the responsibility for attainment of the expected results lies in the nation itself. The policies developed by the European Union tend to be skewed in favor of the European nations. Therefore, in general, they mar the African development. The main aim of globalizing democracy was to achieve democracy and its positive values at a global level. However, there remains a big gap between what the concepts proponents hoped to achieve and what they have attained in reality over the years. Despite many positive effects of globalizing democracy, the ideology proved to have many setbacks, which is being spearheaded

13
14

Gilbert, A. (1990) Democratic Individuality Cambridge: Cambridge University Press. Cox, R. Globalization, Multilateralism and Democracy, Cambridge University Press, 1996.

by major world bodies such as the European Union, the United Nations, and other international organizations.15 Many first world countries have been championing globalization and democracy in the world. They encourage other countries to adopt democracy as a form of governance. They also advocate for democratization of globalization. They encourage other countries to concentrate mainly on production and marketing of those products that each country has a comparative advantage in. In a way, due to this, many third world countries remain poor as a result of dependence on agricultural based, unprocessed products which they export to the first world countries. In order to gain more influence in the global arena, both in trade and other sectors, countries have joined together into regional blocks which promote the member countries views and interests at the global level. Such regional blocks adopt policies which they use to influence trade, governance, social values, and other aspects of the society. The European Union is an example of such a regional block that has been championing for democracy and globalization among the third world countries. It makes policies which influence development and even social life of the member countries and of other non member countries with which it relates. Africa is one of the main regions to which the European Union has applied its economic, social and political policies on democracy and globalization. These policies have had both positive and negative impacts on Africa. Over the years, the EU has advocated and encouraged trade among European nations, African countries, and the world at large. In Africa, it has emphasized on trading with only those countries that respect democracy and uphold the key values and principles of democracy. There is a high level of trade between African countries and the EU member countries. In order to control the trade and advance the ideologies of globalizing democracy and democratizing globalization, the European Unions have certain policies on trade that ensure their Unions goals are completely met. For example, the Africa-Strategy of the European Commission stresses on the importance of a socio-economical environment favoring the democracy. The strategy emphasizes on the creation
15

Paulsen, F. (2007). The Impact of EU`s policies on democratization in Sub-Sahara Africa, Available at http://essay.utwente.nl/706/1/scriptie_Paulsen.pdf

of a socio-economic environment in which democracy and its values are respected. It encourages European nations to engage in socio-economic activities and projects that promote economic development and social development, while at the same time spreading democracy within the African countries. In order to achieve this, the European Union and its member countries are supposed to set conditions in any Trade or Social development agreement or contract that will help realize democracy in the partner African countries. Through the European Trade policy, the European Union has managed to spread democracy ideology while at the same time democratize globalization. The trade policy is meant to encourage international trade between the EU member countries and other countries in the world, especially African countries. Through this policy, the EU has a potentially high influence on the macro-economic situation of its trade partners, particularly if these trade partners conduct the major part of their trade with the EU. For example, in the case of sub-Saharan African countries, trade might be the most important policy in the scope of responsibilities of the European Union which is having influence on developing countries". The absolute position of power of the EC in trade is often strengthened by the relatively weak position of the trade partners in Africa. 16 The EU trade relations with any African country account for only a small fraction of its entire external trade. However, for most African countries, trade with the EU has a very high importance, in some cases constituting more than 50% of such countries external trade. Thi s dependence on the European market gives EU and the European Commission a position of power over their trade partner African states. Outgoing from this position of power, the EU or the European Commission set certain conditions such as human rights and democracy observance in the African countries. The African countries have to meet such conditions for them to trade with the European Union and its member countries. This way, the European Union propagates democracy.

16

Id.

NEGATIVE EFFECTS OF THE EUROPEAN UNIONS POLICIES ON AFRICA In globalizing democracy and democratizing globalization, the European Union employs the use of conditional policies. Such policies, as seen in the discourse above, entail certain conditions, which have to be met by any African country interested in doing business with the European Union.17 The European Union sets such conditions from a position of power over poor African states, which to a great extent depends on the European market for sale of their unprocessed goods and products, knowing that such countries, due to their poverty state, have almost no other option but to follow whatever the EU wishes. Therefore, despite the European Unions intention of spreading democracy in the world and democratizing globalization, in the long run, the Union is a destructive force to the very ideologies it embraces and tries to spread. UNDEMOCRATIC TRADE POLICY The European Union, outgoing from its position of power, sets conditions in its trade policies without even consulting the affected African countries. It does this in a dictatorial manner, knowing that the African countries, due to their dependence on the European market, have little power to object to whatever condition the European Union sets. This practice of the European Union and European Council is very undemocratic. It goes against the very ideology of democracy the Union and the Commission stands for and spread. The European Trade Policy, for example, imposes certain conditions, which have to be met by any African country for such a country to engage in business with any European country that is a member of the European Union. Though the conditions are good themselves, the undemocratic way in which they are set and imposed on African countries make the treaty unfair and undemocratic. This, to a great extent, it is a big blow against globalization of democracy in the long run. Thus, it is evident that the EU has made many positive steps in globalizing democracy and democratizing globalization in Africa through its policies. However, as seen above, the negative effects of these policies on African countries have made Africa less off rather than helped it.
17

Galbraith, J. K. (2000). Foreword: The social Left and the market system. In A. Gilbert, Democratic Individuality. Cambridge: Cambridge University Press.

However, with a good democratic and participatory approach to the development of the European Unions policy, it is possible to counteract the negative effects that former policies have had on Africa and strengthen their positive effects. This will help realize globalization of democracy and democratization of globalization in Africa.

DOES DEMOCRACY SUPPORT GLOBALIZATION? Since, there is no consensus about the nature of the relation between growth and democracy. Econometric studies achieve opposite and frequently weak evidences 18 However, study shows that it is less risky to be democratic to obtain some "normal" long-run growth rate. Moreover, democracies produce greater stability in economic performances, handle better adverse shocks than autocracies, and pay higher wages.19 At a glance, the great democracies appear more open to trade but counter-examples can easily be found.20 Thus, the democratic institutions of India did not lead this country to open its economy more quickly than the Chinese dictatorship. It was during Pinochets government that Chile took the initiative of a trade and financial opening. During the 70s and 80s, Southern Asia registered the worlds highest trade expansion under similar authoritarian regimes. China is now following the same path. The Chilean and Asian cases undoubtedly contributed to encourage a pessimist and revisionist point of view in the political economy literature. Democratic institutions became a possible obstacle to the economic opening. Free riding is under a better control inside small groups than inside the large ones. So, a concentrated and organized industry has more chance to be rentseeker than consumers. The "political market" alternative in the democracies is a greater corruption in the authoritarian countries. However, this link is not completely obvious: on the one hand, oligarchies make more difficult the installation of anti-corruptive and counter-power institutions, but, conversely, they have a larger authority to fight it.. The empirical study highlights a negative (and weak) relation between democracy and corruption and between "natural" openness and corruption The explanation may be explained by the Montesquieus intuition: the autocratic regimes do not prevent all kinds of imports but predict a trade oriented to sumptuary goods imports (including weapons). Democracies would prefer import "economic" goods contributing more positively to the national welfare. Other authors renew the liberal tradition to underline the advantages of democratic regimes. An electoral regime neutralizes the capacity of big groups to be organized and reinforces the pro-trade consumers. The study

18 19

(Barro, 1996a & 1996b). (see also Rodrik, 1999). 20 Jean-Marc Siron, Globalization and democracy, Lecture EBAPE, April 7th, 2003.

confirms, with rare exceptions, that free-traders are also democratic. The great majority of the closed countries is among the least politically free. There are few democratic countries reluctant to free trade, India being the most important exception. In many countries, the political opening follows or precedes the trade opening. If we must be cautious about the causality, almost all countries opening their trade with an authoritarian regime have been also democratizing their political system, countries like Taiwan or South Korea.

ANNOTED BIBLOIGRAPHY

SECONDARY SOURCES

Quan Li and Rafael Reuveny, Economic Globalisation and Democracy, 29 British Journal of political science. 33, (Jan.2013).

The author in the paper argues that there are four aspects or views as to the affect of globalisation on the democracy. The four mentioned are the globalisation enhances globalisation and the second says that there is no effect, the third says there is no impact on the democracy and the fourth that globalisation does not necessarily affects globalisation. The authors tends to establish the relationship between the globalisation and democracy upon the abovementioned four criteria.

Nita Rudra, Globalization and the Strengthening of Democracy in the Developing World, 49 American Journal of Political Science. 704, (Oct. 2005).

This article shows that these two trends are indeed related, but not necessarily in the direct manner that has commonly been postulated. Combining theories of embedded liberalism and conflict-based theories of democracy, the model presented here depicts the process that affects decisions to strengthen democracy as trade and capital flows increase.

Barry Eichengreen and David Leblang, Democracy and Globalization, NBER Working Paper No. 12450. (Aug. 2006).

The connections between globalization and democracy are a classic question in international political economy and a topic much debated in foreign policy circles. The present paper applies approach to an extensive historical data set. The results suggest the existence of positive relationships running both ways between globalization and democracy.

J.Ernesto Lopez and Christopher M. Meissner, Democracy and Globalisation, Preliminary version Comments.(July 2004)

The presents paper seeks to analyse whether the international trade fosters democracy? The relationship between the trade and democracy is addressed via a gravity model of trade. It helps to rather obtain the casual impact of openness on democratization.

Nicholas Pretty, Interrelationship between Democracy and Capitalism, Integrated Studies Final Project Essay. 1 , ( December 2012).

The abovementioned paper demonstrates that a vast majority of people (i.e. general will) has little or no impact on how economic globalization forces are shaping the globe. The author proceeds with a hypothesis that the forces of capitalism, with a profit driven motive, are at odds with a fundamental principle of democracy, the general will.

WEBSITES.

www.heinonline.com. Jstor.com Lexisnexis.com