This paper examines the concept of 'Globalisation' and its impact on both developed and underdeveloped countries. The opponents to globalisation view growing international trade as detrimental to the interests of developing countries. However, there is no doubt globalisation has the ability to reduce poverty and economic inequality throughout the world. The issue remains whether the aid provided to underdeveloped countries gets to those who need it the most. The presence of corruption and political instability are detrimental to globalisation and make it unachievable. Also, developed countries play a role, as it seems apparent that they are in fact holding back underdeveloped countries with protectionism, as regions like Sub-Saharan Africa exhibit a comparative advantage in a wide range of agricultural products.
This paper examines the concept of 'Globalisation' and its impact on both developed and underdeveloped countries. Globalisation has for a long time has been a highly contested and perhaps the most hotly debated topic among economists (Nuruzzaman, 2000).
The opponents to globalisation view growing international trade as detrimental to the interests of developing countries. However, over the last 20 years few developing countries have grown rapidly without a simultaneous increase in both exports and imports (Bhagwati, 1994). This paper will first define the concept of globalisation in an economic sense, along with the arguments against it. Further on globalisation, the theory of comparative advantage will be explored, including its impact on free trade. The next phase is an assessment of the theoretical linkages between trade and economic growth from the perspective of both developed and underdeveloped countries. As a result of this assessment it will be made apparent whether trade is always beneficial to growth. Finally, an examination of the aid and trade provided to underdeveloped countries will be conducted, including the impact both have on economic growth.