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How international travel is one of the many benefits of globalization
I will admit, I did not write this week. I was very busy—it involved graduating high school and a lot of mulch.
So, I thought I’d send out a recent essay I wrote for a scholarship application on the importance of international travel in a globalized economy. I lost the scholarship competition, so maybe take my words here with a grain of salt.
International travel enhances the economic development of countries around the world in two ways—through stronger relationships and the faster diffusion of ideas.
The rise of global trade and the post-World War II order of international cooperation has increased the returns on investments in diplomacy and interaction with foreign countries. Forging relationships with other nations is an essential element in securing a country’s economic success and military protection. Many diplomatic relationships require high-level private talks, necessitating travel between countries to bring power-brokers to the bargaining table. Just as it took the man who united Saudi Arabia, Ibn Saud, a trip from Riyadh to the Suez Canal to negotiate military protection and economic cooperation with President Franklin Delano Roosevelt in 1945, it requires travel for leaders, executives, and citizens alike to forge mutually beneficial relationships with other counterparts in countries.
Ideas are essential to a country’s prosperity. In Econ 101, it is taught that output is a function of land, labor, and capital, all of which are catalyzed by a, a term denoted as the application of technology and ideas. While land, labor, and capital are all important, applying the factors of production effectively and efficiently is essential to a productive economy. During post-war reconstruction, Japan sent their experts to American companies and factories to understand how goods were effectively produced, how employees were managed, and how a modern economy was to be built. Seamless international travel was vital to making that happen. As globalization opens a growing number of industries and market sectors to cross-border competition, international travel not only facilitates the sharing of goods but also allows for innovative policies and practices to be more widely spread as well.
Another way that ideas spread via international travel is through a process called normative isomorphism. Normative isomorphism is the diffusion of best practices and policies as people disperse into different areas, countries, and fields. As experts move from one country to another, the leading practices of their field can diffuse into their new country’s institutions, increasing the overall capability and effectiveness of those institutions. These practices can have massive knock-on economic effects, shaping the global economy as a whole. For example, while there is widespread concern about inflation in 2022, global inflation in general has fallen since the 1980s, falling from roughly 8% per year to just 2% annually during the 2010s. This decline has been attributed to the effects of normative isomorphism, as a growing number of economists, connected via global travel and networks, draw on training they receive at the International Monetary Fund or the World Bank to shape developing economies at home. As these economists move into economic consultancy, leadership, or advisory roles in the governments of developing countries, their ingrained worries about inflation have been shown to diffuse throughout the
institutions in which they work, creating a global consensus about managing the dangers of inflation. This, in turn, has promoted global macroeconomic stability since the adoption of floating exchange rates in the 1970s.
Ultimately, for successful countries, international travel is a critical part of their openness to the world—an openness that has been enabled and necessitated by the power and reach of globalization. The movement of people and ideas through international travel staves off cultural and institutional ossification. It is a gift that countries can choose to embrace, for the benefit of their citizens and the world at large.