What is the Difference Between Liberalisation and Globalisation?
🆚 Go to Comparative Table 🆚The main difference between liberalisation and globalisation lies in their focus and scope.
Liberalisation refers to the process of eliminating unnecessary controls and restrictions for the smooth functioning of trade and business. It is mainly concentrated on economic activities within a country as a result of modernization. Liberalisation involves reducing tariffs, deregulating the industrial sector, abolishing licensing, and bringing tax and other reforms. It leads to the expansion and growth of domestic businesses and promotes foreign trade and investment.
Globalisation refers to the process by which ideas, goods, and services are spread throughout the world by crossing national boundaries. It involves the integration of the national economy and societies through cross-country flows of ideas, technologies, goods, services, capital, finance, and people. Globalisation is a complex and multifaceted phenomenon that results in interdependence and contact between countries.
In summary, liberalisation is focused on easing rules and regulations within a country, while globalisation is about integrating the local economy with the global economy. Although both concepts are interrelated and share similar goals, they differ in their focus and the methods adopted to achieve their objectives.
Comparative Table: Liberalisation vs Globalisation
Here is a table comparing the differences between liberalization and globalization:
| Feature | Liberalization | Globalization |
|---|---|---|
| Focus | Local economy, ease rules and regulations on political or social matters | Integration of national economies and societies through cross-country flows of ideas, technologies, goods, services, capital, finance, and people |
| Scope | National level, modernization and advancement | International level, interdependence and contact between nations |
| Activities | Easing government controls and restrictions, reducing tariffs, deregulating industrial sector, abolishing licensing, tax reforms | Foreign direct investment, approving foreign technology, amendment of patent laws, allowing cross-border trade, spread of technology, free flow of people, investment, and information |
| Interrelationship | Liberalization leads to privatization and globalization | Globalization includes liberalization and privatization |
| Benefits | High growth rate, easy availability of goods at competitive rates, good industrial relations | Expansion of investment, promotion of foreign trade, foreign exchange generation, exposure to a variety of goods for consumers |
In summary, liberalization is a policy approach aimed at easing rules and regulations within a country, while globalization is a broader trend of increasing interconnectedness between countries through cross-border trade, technology, and communication.
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