Measuring Globalization

“Unsatisfactory” is the word that best describes the contemporary debate over globalization. There seems to be a consensus that globalization – whether economic, political, cultural, or environmental – is defined by increasing levels of interdependence over vast distances. But few people have undertaken the task of actually trying to measure those levels of interdependence. For instance, how do we determine the extent to which a country has become embedded within the global economy? How do we demonstrate that globalization is racing ahead, rather than just limping along? And how do we know just how worldwide the World Wide Web has become?

With this challenge in mind, we present the A.T. Kearney/FOREIGN POLICY Magazine Globalization Index™, which offers a comprehensive guide to globalization in 50 developed countries and key emerging markets worldwide. The Globalization Index “reverse-engineers” globalization and breaks it down into its most important component parts. On a country-by-country basis, it quantifies the level of personal contact across national borders by combining data on international travel, international phone calls, and cross-border remittances and other transfers. It charts the World Wide Web by assessing not only its growing number of users, but also the number of Internet hosts and secure servers through which they communicate, find information, and conduct business transactions.

The Globalization Index also measures economic integration. It tracks the movements of goods and services by examining the changing share of international trade in each country’s economy, and it measures the permeability of national borders through the convergence of domestic and international prices. The index also tracks the movements of money by tabulating inward- and outward-directed foreign investment and portfolio capital flows, as well as income payments and receipts.

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