The rise of large multi-national corporations and increased economic interdependence between nations has shifted economic power away from nation-states towards very large companies operating across borders. As companies have globalized their operations through foreign direct investments and international supply chains, their revenues and profits have grown exponentially, in some cases exceeding the GDP of many smaller countries. Companies like Walmart, Google, Shell, and Toyota now exert significant influence not just through their economic roles but also through their lobbying efforts and ability to threaten moving investments if governments pursue policies that negatively impact corporate profits. This shift in power away from countries to very large border-spanning corporations is one of globalization’s most consequential impacts on geopolitics.

The rise of new global economic powers like China, India and Brazil has also re-balanced global economic influence away from the traditional Western powers. In the 1970s, the US, Western Europe nations and Japan accounted for around 70% of global GDP measured by PPP. As many developing nations pursued rapid export-oriented growth through integration into global supply chains and the world trading system under globalization, their share of global economic output expanded significantly. According to IMF estimates, developing nations as a whole accounted for around 50% of global GDP measured by PPP in 2017, with emerging economies like China and India challenging traditional powers on the global stage through their rapidly rising economic output and influence. While political power has still been concentrated in the West so far, globalization has enabled the rise of new global economic powers seeking a greater say commensurate with their economic weight.

The interconnectedness created by globalization has reduced the autonomy of smaller nation-states to determine their own economic policies, as global markets now intensely scrutinize every domestic decision of countries for its global spillover effects. Bond markets, equity markets, trade and capital flows now react instantaneously to any hint of unexpected policy changes worldwide due to the speed of information transmission. Consequently, governments in countries have a significantly reduced policy space to carry out domestic economic measures like currency devaluations, interest rate changes or subsidies without sparking an adverse market reaction. Big emerging economies have also gained through their dominance in setting global prices for key commodities like oil that smaller import-dependent countries have less control over. This reduction in policy autonomy for smaller nations and shift in influence towards larger countries and global markets/corporations is another way globalization has reshaped the global balance of power.

By enabling the free flow of information worldwide, globalization has empowered non-state actors and civil society groups in challenging the power of authoritarian nation-states in new ways. The sharing of information across borders through the rapid spread of technology like the Internet, satellites and smartphones has enabled activists, journalists and citizen networks to much more easily coordinate and publicize instances of human rights violations or oppressive policies within closed countries. They can generate global attention and pressure, countering attempts by such regimes to censor internal dissent or limit outside scrutiny of their actions. Several authoritarian regimes that sought to control the flow of information within their borders have found such control increasingly difficult due to globalization. This has given more clout to outsider advocacy and civil society groups globally relative to the power of some repressive states to operate unchecked internally.

The far-reaching nature of many transnational issues like climate change, pandemics, terrorism and migration that have arisen or been exacerbated due to increasing global connectedness have also empowered international organizations to play a stronger role. Given that such cross-border challenges ignore geopolitical boundaries and can only be addressed through global cooperation, issues like coordinating worldwide actions against climate change have bolstered the standing of multilateral forums and treaty-based mechanisms like the UN. International cooperation under the aegis of such forums involves compromise and consensus-building that dilutes pure unilateral power play by dominant states on such transnational issues. This has seen a meaningful shift in global influence towards multilateral processes and organizations over specific nation-states.

Over the past few decades globalization has significantly transformed the existing distribution of power structures in the world in these major ways – through the rise of corporate giants stretching beyond borders, the enhanced global economic influence of emerging powers, the reduced policy autonomy of smaller states, the empowerment of transnational non-state actors and civil society groups, and the boosting of multilateral forums to address cross-border challenges. While certain nations and economic blocs still maintain disproportionate strength, globalization has arguably reduced concentration of power by enabling the rise of new actors and reshaping the terms of global policymaking in a more complex multi-polar direction with both opportunities and risks ahead.