Before we examine the impacts of globalisation and governments' responses to it, it is useful to first attempt a snapshot of what globalisation actually is and how it manifests itself. Globalisation is not a single phenomenon. It has become a catch-all concept to describe a range of trends and forces changing the face of the world in which we live. As an economic phenomenon, globalisation is manifested in a shift from a world of distinct national economies to a global economy in which production is internationalised and financial capital flows freely and instantly between countries. Multinational Enterprises wield vast economic power, while anonymous institutional investors influence currency rates, the availability and price of international capital, and interest rates.
Globalisation is both a cause and a consequence of the information revolution.
These communications technologies are helping to overcome the barriers of physical distance. Communities of various types, including international interest groups like Greenpeace or Amnesty International, as well as business and labour organisations, now function across national borders. Even the framework of social policies affecting individual citizens is becoming more sensitive to international influences, including the global news media. However, the trend towards the global is not uni-directional. While these trends might appear contradictory, in practice they are causing the development of new multi-level policy systems.