Globalization and Localization: An Economic Approach

Abstract

The aim of this chapter is to assess, from an economic perspective, ways in which actual globalization is likely to affect disaster vulnerability. We approach the issue by putting forward an economic concept of disaster localization. It is first shown that a localized disaster is unlikely to affect the macroeconomy in any significant way. In addition, development tends to make all disasters localized as an incidental consequence of its endogenous and exogenous processes. The people and activities directly affected by a disaster may still undergo severe difficulties, but these are likely to be less intense and more rapidly counteracted in countries with higher levels of integration, diversification, and general development. That is, as economic resilience and economic disaster confinement increase, disaster vulnerability is bound to decrease. However, the effect of current globalization on vulnerability seems to be double edged. On the one hand, globalization is likely to speed up the downgrading of vulnerability at the national level by helping to upgrade localization. On the other, however, at least in the short and medium terms, globalization may increase vulnerability at the local level by disenfranchising communities and individuals as well as adding new sources of economic instability. Does globalization help the process of disaster localization? Is current globalization beneficial for the people and activities that can be directly affected by a potential disaster? In other words, we look at the ways in which the main economic features of actual globalization might affect disaster vulnerability, at national and local levels.¹