International Integration and Societal Progress A Critical Review

International Integration and Societal Progress: A Critical Review of Globalisation Indicators Paper prepared for II OECD World Forum on Statistics, Knowledge and Policy: Measuring and Fostering the Progress of Societies, Istanbul, 27 -30 June 2007 Philippe De Lombaerde, UNU-CRIS. P. Lelio Iapadre, University of L’Aquila, Johns Hopkins University (SAIS Bologna Center), UNU-CRIS. United Nations University - Comparative Regional Integration Studies - UNU-CRIS

Outline • Globalisation indicators: an overview • Defining and measuring international integration: conceptual issues – The scope of international integration • International integration and societal progress – Trans-national public goods – Competition, innovation and economic growth United Nations University - Comparative Regional Integration Studies - UNU-CRIS

Defining and measuring globalisation Economic globalisation indicators: • 1979 -: World Economic Forum’s indicator of competitiveness • 1996 -: Economic Freedom of the World (Gwartney and Lawson) • 2001: World Market Research Center globalisation index (G-index) (Randolph) • 2004: Riezman, Whalley and Zhang • 2005: OECD Handbook on Economic Globalisation Indicators The Human Development Index and the birth of multidimensional indicators of globalisation United Nations University - Comparative Regional Integration Studies - UNU-CRIS

Defining and measuring globalisation Globalisation index Number of variables Number of categories Dimensions G-Index (Randolph, 2001) 6 2 ‘old’ economy (3 variables), ‘new’ economy (3) Kearney/FP-GI (2001) 11 4 globalisation in goods and services (2), financial globalisation (3), globalisation of personal contact (3), internet connectivity (3) Kearney/FP-GI (2003) 13 4 economic integration (4), personal contact (3), technology (3), political engagement (3) Kearney/FP-GI (2004) 14 4 economic integration (4), personal contact (3), technological connectivity (3), political engagement (4) Kearney/FP-GI (2005, 2006) 12 4 economic integration (2), personal contact (3), technological connectivity (3), political engagement (4) CSGR-GI (Lockwood and Redoano, 2005) 16 3 economic globalisation (4), social globalisation (9), political globalisation (3) MGI (Martens and Zywietz, 2004, 2006) 11 7 global trade (1), global finance (2), global politics (2), organized violence (1), people on the move (2), technology (2), environment (1) DGI (Dreher, 2005) 23 3 economic integration (8), political engagement (3), social globalisation (12) Kearney/FP/H (Heshmati, 2006) 13 4 economic integration (4), personal contacts (3), technology (3), political engagement (3) United Nations University - Comparative Regional Integration Studies - UNU-CRIS

Defining and measuring globalisation Issues and recommendations: • • Taking actors into account Differentiating between concepts Adding dimensions and disaggregating flows Distinguishing between different logical components of globalization process: – (1) inputs (policies), – (2) (velocity, extensity and intensity of) global interactions, – (3) outputs (results, effects) • Weighting the different sub-indices • Parsimony, efficiency and transparency. United Nations University - Comparative Regional Integration Studies - UNU-CRIS

Defining the scope of international integration • National perspective – Openness to the rest of the world – Geographic diversification and concentration – The role of distance • Regional perspective – Intra- and extra-regional integration • Global perspective – Global integration as an average of national integration indicators – Intrinsically global processes, without reference to national borders • Policy relevance: the debate about regionalism and multilateralism United Nations University - Comparative Regional Integration Studies - UNU-CRIS

Linking international integration to societal progress • Measuring the provision of trans-national public goods – Regional vs. global public goods – International integration, in itself, is a sign of societal progress – International political integration helps providing an adequate supply of trans-national public goods – Improving the institutional dimension of international integration indicators United Nations University - Comparative Regional Integration Studies - UNU-CRIS

Linking international integration to societal progress • Empirical evidence – International integration fosters societal progress – International integration and economic growth: measurement needs • Gauging the competition effects of international integration • Assessing its effects on knowledge creation and diffusion • Distinguishing between the dynamic effects of regional and global integration – International integration and non-economic aspects of societal well-being United Nations University - Comparative Regional Integration Studies - UNU-CRIS

Conclusions • Measuring international integration is essential for a better understanding of societal progress, and for a better formulation of integration policies • Composite globalisation indicators face severe conceptual and methodological problems • Accurately measuring the scope of international integration (regional vs. global) is essential to understand its implications for economic growth and societal progress United Nations University - Comparative Regional Integration Studies - UNU-CRIS