Consequences of Changes in Globalisation — Globalisation & Trade Restrictions | IGCSE Economics

Exam Frequency Analysis

Past paper frequency (2018 to 2024)

This topic accounts for approximately 6% of your exam marks.

new

Low

New6%

New emphasis in the 2027 syllabus; globalisation, multinational companies and trade restrictions are now grouped as a distinct topic. Guidance based on specimen materials.

A rise in globalisation has wide effects, and most of them cut both ways.

International trade. Trade grows as barriers fall and supply chains spread across borders, raising output and incomes.
Competition. Domestic firms face more foreign competition, which can lower prices and raise quality, but can also drive less efficient domestic firms out of business.
The environment. More production and longer transport chains can raise pollution and emissions, though the spread of cleaner technology can work the other way.
Migration. Easier movement of people lets workers go where jobs and wages are higher, helping fill labour shortages but also straining housing and services in receiving countries.
Income distribution. Globalisation has lifted hundreds of millions out of absolute poverty, but within countries it can widen the gap between skilled workers and capital owners, who gain, and low-skilled workers in import-competing industries, who may lose out.
Economic development. Access to world markets, foreign investment and technology can speed up development in poorer countries, although those that stay dependent on a narrow range of primary exports benefit less.

Exam tip

Discuss whether globalisation benefits a country (8 marks)

What comes up: an 8-mark "Discuss whether or not a country benefits from globalisation." Both sides plus a judgement are required.

Write: Why it benefits: greater trade lets the country specialise and sell to larger markets (1), raising output and incomes (1); more competition lowers prices and raises quality for consumers (1); foreign investment and technology raise productivity and speed development (1). Why it may not: domestic firms unable to compete with imports may close, causing structural unemployment (1); income inequality may widen as skilled workers gain more than the low-skilled (1); longer supply chains and more production can harm the environment (1); the economy becomes more exposed to shocks abroad (1). Judgement: state whether the gains outweigh the costs and why, for example that globalisation tends to benefit a country overall if it can move workers into competitive industries and share the gains widely.

Watch out: a one-sided answer is capped below the top band. Develop each point into a chain rather than listing effects.