DHL Global Connectedness Index 2014

38 2. How Globalized are Individual Countries and Regions
Figure 2.9
Regional Average Intra-regional Share of Flows or Stocks by Pillar
Overall
Trade
Pillars
Capital
Information
People
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Europe North America East Asia & Pacific Middle East & North Africa
South & Central America, Caribbean South & Central Asia Sub-Saharan Africa
The wide gulf between the countries with the highest and lowest intra-regional shares of their international interactions reveals “globalization” to be a
very distinct phenomenon in, for example, Europe, where international connectedness primarily involves ties to other European countries, versus South
and Central Asia, where intra-regional ties barely register.
(who also come mainly from outside of the region, boosting
depth without increasing intra-regional integration).
A second point from Figure 2.9 in particular is the magnitude
of the differences across regions in their proportions of
intra-regional flows. The high proportion of intra-regional
flows globally was noted above, but is far from uniform
across regions, which suggests that “international” takes on
a distinct meaning in different parts of the world. Consider,
for example, the contrast on the trade pillar between
Europe and South & Central Asia. Across European countries,
the average intra-regional share of trade flows is 78%
whereas the same metric averages only 22% across South &
Central Asian countries. For European countries, “international”
is best understood first and foremost as the rest
of Europe, whereas for South & Central Asian countries, it
necessarily includes distant countries as well as neighbors.
And finally, a third important point from Figure 2.9 is the
correlation between levels of intra-regional integration and
prosperity. Intra-regional integration takes advantages of
the many types of cultural, administrative/political, geographic,
and economic (“CAGE”) proximity and similarity
among neighboring countries that can ease international
interactions. While the prosperous North American region
might initially seem like an exception to this pattern with
its moderate level of regionalization, that largely reflects
how this region is composed of only three countries among
which one (the United States) is disproportionately large
(84% of the region’s GDP). Those characteristics naturally
reduce the intra-regional share of this region’s international
flows.
Turning to region-by-region discussion of global connectedness
patterns and trends, Europe is the world’s most globally
connected region, reflecting both its structural characteristics
(many wealthy countries in close proximity) as
well as decades of policies aimed at promoting integration
via the European Union (EU) and its predecessors. Europe
leads specifically on the depth dimension and on the trade
and people pillars, but its overall strength is reflected by the
fact that it, uniquely, ranks in the top 3 on all of the pillars.
Europe’s strength across all of the pillars of the DHL
Global Connectedness Index is supported by the pillars’
close correspondence to core principles of the EU. Three
pillars (trade, capital, and people) are addressed directly
by the EU’s “four freedoms,” specifically free movement
of goods, capital, services, and people. The remaining pillar,
information, is included in the EU’s Copenhagen Criteria
for accession to the Union, based on which “the EU makes
press freedom one of the main criteria for accession.” 9,10
The overall global connectedness of European countries
was steady from 2011 to 2013. The average European country’s
depth score rose while its breadth score declined. Falling
breadth scores among European countries are consistent
with the broader pattern of falling breadth in advanced
economies as advanced economies struggle to keep up with
the rise of economic activity in emerging economies, as