The causes of globalization

The most important causes of globalization differ among the three major com ponents of international market integration: trade, multinational productio n, and international finance. The information technology revolution has mad e it very difficult for governments to control cross-border capital movemen ts, even if they have political incentives to do so. Governments can still restrict the multinationalization of production, but they have increasingly chosen to liberalize because of the macroeconomic benefits. Although the o ne-time Ricardian gains from freer trade are clear, whether trade is good f or growth in the medium term is less certain. In the case of trade, the inc reasing interest of exporters in opening up domestic markets has had a powe rful impact on the trend to liberalization. Cross-national variations in ma rket integration still endure, but these are more the product of basic econ omic characteristics (such as country size and level of development) than p olitical factors (such as regime type or the left-right balance of power).