The Impact of Globalization on the Economic Development of Countries

Globalization is one of the main drivers of economic development in the modern world. However, along with the increase in trade volumes due to the opening of markets, the growth of competitiveness of national economies via the development of communications, the use of the latest technologies, and the attraction of foreign investment, globalization poses numerous challenges for states. This article aims to analyze the positive and negative aspects of globalization impact (the research object) on the processes of countries’ economic development. The system approach serves as the methodological background of this study. The main methods employed include document and correlation analysis, comparative method, abstraction, systematization, induction, and deduction methods. It has been found that there is a direct correlation between the level of countries’ globalization (KOF Globalization Index) and the level of their economic development, as demonstrated by GDP (PPP) per capita. At the same time, other macroeconomic indicators (i.e., unemployment, inflation, and public debt) have a weak correlation with the globalization level of countries. However, the global financial crisis of 2008 had the most severe consequences for countries with high levels of public debt and countries with high rates of economic development. The authors found that globalization promotes the economic inclusion of Asian countries in the world economic processes. These countries successfully compete with developed countries (the USA and the EU) and are already outperforming them in certain areas (China ranks first in the world in terms of exports and in the GDP (PPP) ranking). These facts refute the thesis that globalization benefits only developed countries (the global North). At the same time, globalization processes stimulate the growth of social inequality in the world. Such inequality is typical for both Northern and Southern countries. Therefore, it requires a competent public policy to maximize the benefits of globalization and minimize its negative impact, which will help further the economic development of countries.