Effects of Globalization on the Local Governments

Effects of Globalization on the Local Governments


As the world becomes more interconnected due to globalization, many local governments are significantly changing in the way they function. Globalization has affected local governments in a wide and multilayered spectrum over the past few years. Globalization, now encompassing different disciplines from politics to economics, has made a rapid introduction of new strategies for local governments to thrive (Amavilah, Asongu & Andrés, 2017). With the impact of globalization, different local governments around the world can interact as a result of improvements in communication technologies and transportation and the adoption of new structures in their bodies. Through the global network, they also interact with each other leading to significant changes in their functional and structural position. While globalization offers many benefits, local governments are significantly facing a lot of challenges on the economy, the structure of public policies, and other significant factors that call for effective strategies.

Challenges Faced by Local Governments in the Age of Globalization

Globalization has to several challenges on the local governments. One of the major challenges is linked to the sustenance of the local economy. Many local governments around the world depend on small businesses and agriculture. With globalization, these two aspects are becoming less competitive (Brunet-Jailly & Martin, 2017). As a result of high competition, price instability has forced people to establish industries overseas leading to job loss. Nonetheless, globalization majorly operates in the interest of developed nations that continue dominating world trade at the expense of less developed nations. This has been a significant challenge to local governments in less developed countries since their role in the world market has changed to providing developed nations with raw materials and cheap labor (O’Rourke, 2019). To cope with globalization, local governments are having significant challenges in structuring their public policies. The absence of strictly enforced international laws has made local governments restructure their policies to operate in a way that affects the public. Lack of strict laws means, low wages on local workers, poor working conditions, and environmental pollution. Globalization is also viewed as a threat to local diversity. It is feared that it might bring down local languages, traditions, and cultural diversity.

How Local Governments Can Raise their Funds

The amount of money raised by local governments depends on their expenditure decisions and sources of revenue. There are a variety of approaches in which local governments can use to successfully raise funds for meeting their challenges. One of the major sources of revenue is local taxes. Local governments can pass dedicated increases to local taxes such as property taxes, sales taxes, fuel taxes, and income taxes (Amavilah, Asongu & Andrés, 2017). There are also the development impact fees whose main idea is that local governments can assess fees on new development projects. These projects should pay for increased costs that local governments have to bear in providing them with services needed for development.

Another way for the local governments to generate funds is through general funds such as public works budgets and capital improvement budgets that come from the overall fees and taxes collected from people. These funds should be allocated for different budgets. Local governments can also raise funds through direct donations and fundraisings. Direct donations can originate from foundations, private individuals, nonprofit organizations, or businesses (Purta et al., 2018). For example, a foundation may be interested in funding a school project or maybe willing to fund the costs of establishing specific infrastructures in a rural community. Private individuals are likely to provide donations for local projects while businesses may offer materials for active events.

How Local Governments Meet Future Challenges

The future poses several significant challenges to local governments. Therefore, they must come up with effective strategies to meet these challenges. To meet the challenge of structural policy changes, it is critical for community members to constructively engage with elected officials and with the government process (O’Rourke, 2019). Most jurisdictions have rules about open meetings and public hearings. Representatives need to find out how the system works, and subscribe to the meeting notices that interest the public. There is an amazing number of meetings where people can go and have public input. People also need to find out which staff representative for an elected official handles the work in which they have an interest and make an appointment to meet with them. The road to an elected official’s decision always runs through staff.

Local governments are likely to face the challenge of decreased revenue and increased service demands. To meet this challenge, they need to start participating in joint contact agreements with other local governments and also participate in grant programs that allow regional cooperation. Local governments also need to employ effective human resource strategies such as providing incentives to early retirement, subsequent pay reductions, utilizing volunteers, and avoiding across-the-board cuts that can affect productive programs (Brunet-Jailly & Martin, 2017). Another critical strategy is to educate the public concerning the expected challenges. A good example of public education initiative is the Allegheny Forum which provided the public an opportunity to discuss and provide feedback on the challenges affecting Allegheny county. Investing in public education can significantly increase people’s understanding of public issues that may affect them in the future which leads to product decisions.

How Local Governments Can Able to Convert their Challenges into Opportunities.

As technology and people’s expectations evolve, local governments can take significant actions to convert their challenges into future opportunities. One of the major challenges that local governments are facing is resource allocation, getting key investment, and delivery model decisions (Purta et al., 2018). To convert this challenge to an opportunity, local governments to limit their traditional revenue sources. Leaders need to challenge the way operations are currently done, change the operating models, and drive the best process and practice efficiency. They also need to find alternative models for service delivery.

Local governments are also facing significant challenges adjusting their structural policies. To convert this into an opportunity, they need to expand their power. For instance, they expand their taxing power to allow them to decide how much and how to tax. This provides them with a significant ability to match the needs of their communities. The rapidly changing technologies are also significantly affecting local governments (O’Rourke, 2019). Both individuals in support roles and customer-facing services must deliver on made and drive efficiency to provide significant services to people. Therefore, local governments must embrace the new technologies. These technologies are likely to impact infrastructure and services and reshape the way the local government looks to accommodate them.


In conclusion, globalization has led to significant changes, transformations, and challenges for the local governments. Among the major challenges of globalization on the local governments include economic sustenance challenges, structural policy challenges, and threats to local diversity. These challenges majorly result from a lack of strict international laws and the world becoming more interconnected. Local governments can raise funds through local taxes, development fees, general fees, and donations, and fundraisings. While globalization continues to affect local governments, there is a need for them to meet future challenges. This can be achieved by engaging with elected officials, participating in joint agreements, and educating the public. To convert their challenges to opportunities, local governments need to limit their traditional revenue sources, expand their power, and embrace new technologies.


















Amavilah, V., Asongu, S. A., & Andrés, A. R. (2017). Effects of globalization on peace and stability: Implications for governance and the knowledge economy of African countries. Technological Forecasting and Social Change, 122(1), 91-103. https://doi.org/10.1016/j.techfore.2017.04.013

Brunet-Jailly, E., & Martin, J. (2017). Local government in a global world (Fifth Edition). Toronto: University of Toronto Press.

O’Rourke, K. H. (2019). Economic history and contemporary challenges to globalization. The Journal of Economic History, 79(2), 356-382. https://doi.org/10.1017/S0022050719000044

Putra, D. A., Jasmi, K. A., Basiron, B., Huda, M., Maseleno, A., Shankar, K., & Aminudin, N. (2018). Tactical steps for e-government development. International Journal of pure and applied mathematics119(15), 2251-2258. ISSN: 1314-3395


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