The 2002 Globalization Index: Globalization's Last Hurrah?

In an attempt to make sense of the borderless world the second edition of the annual A.T. Kearney/Foreign Policy Magazine Globalization Index has been published. This index has been developed to quantify the growing internationalization of international financial structures. The index employs indicators spanning information technology, finance, trade, politics, travel, and personal communication to evaluate levels of global integration in dozens of advanced economies and key emerging markets worldwide.

Last year the index offered a 'before' photo on a worldwide scale—a snapshot of global integration prior to the September 11, 2001, attacks. This year’s index, in turn, gives a glimpse of the developing 'after' image—an opportunity to assess the initial impact of the attacks on a process that many analysts see as the driving force of our times. Beyond the economy, global integration actually deepened on several levels. The war on terrorism, for instance, was a key factor fueling political integration. Membership in international organizations expanded significantly in 2001, with humanitarian and commercial organizations leading the way. China joined the World Trade Organization (WTO) and became the fourth-largest trader after the United States, Japan, and the European Union (EU).

Last year Globalization Index revealed that Singapore was the "most global" nation. Topping this year's list is Ireland, a country whose levels of economic integration have boomed since 1998, the end of our previous survey, in which Ireland ranked sixth. Switzerland has been ranked number two for the second year in succession in a survey of the world’s most globalized countries. Switzerland’s second place was mainly due to the widespread use of the Internet, the country’s attraction as an international financial center and the increase in political integration. Singapore slipped to third place in this year's Globalization Index, largely as a result of its performance in certain economic indicators.

One of the most heated debates about globalization today is whether competition between countries forces them to cut taxation—as well as social spending—in order to attract foreign investors and other international business interests. The findings show that taxation levels and spending levels go hand-in-hand but that neither correlates well with levels of globalization. For the whole publication, visit: www.foreignpolicy.com/issue_janfeb_2002/global_index.html