In thinking about the consequences of globalisation, it is necessary to keep in mind that the same set of policies does not lead to the same results everywhere. While globalisation has led to similar economic policies adopted by governments in different parts of the world, this has generated vastly different outcomes in different parts of the world. It is again crucial to pay attention to specific context rather than make simple generalisations in this connection.

Which of the following is not an economic consequence of Globalisation?

It has resulted in an erosion of state capacity, that is, the ability of the government to do what they do.

The correct answer is Option 3 - It has resulted in an erosion of state capacity, that is, the ability of the government to do what they do.

Option 3 is a 'Political Consequence' not an economic consequence.

Political Consequences of Globalisation - At the most simple level, globalisation results in an erosion of state capacity, that is, the ability of government to do what they do. All over the world, the old ‘welfare state’ is now giving way to a more minimalist state that performs certain core functions such as the maintenance of law and order and the security of its citizens. However, it withdraws from many of its earlier welfare functions directed at economic and social well-being. In place of the welfare state, it is the market that becomes the prime determinant of economic and social priorities. The entry and the increased role of multinational companies all over the world lead to a reduction in the capacity of governments to take decisions on their own.

Economic globalisation:

What is often called economic globalisation usually involves greater economic flows among different countries of the world. Some of this is voluntary and some forced by international institutions and powerful countries. This flow or exchange can take various forms: commodities, capital, people and ideas.(Option 1) Globalisation has involved greater trade in commodities across the globe; the restrictions imposed by different countries on allowing the imports of other countries have been reduced (Option 2). Similarly, the restrictions on movement of capital across countries have also been reduced. In operational terms, it means that investors in the rich countries can invest their money in countries other than their own, including developing countries, where they might get better returns. Globalisation has also led to the flow of ideas across national boundaries. The spread of internet and computer related services is an example of that. But globalisation has not led to the same degree of increase in the movement of people across the globe. Developed countries have carefully guarded their borders with visa policies to ensure that citizens of other countries cannot take away the jobs of their own citizens.