Global Governance; Political and Economic

Question 1

What is the Bretton Woods system?

Answer 1

Their purpose is to maintain stable exchange rates.

Question 2

Why was the Bretton woods system created?

Answer 2

• Fear of return to economic instability of inter-war period.
• Widely believed that that unemployment and economic recession to rise of fascism and WW2
• Consensus that protectionism was economically self-defeating and politically dangerous.

Question 3

Why did the Bretton woods system end?

Answer 3

-The US economy was in decline, cost Vietnam war, social welfare and dwindling gold stock led to President Nixon to suspend convertible of dollar to gold at established value on 15th august 1971.

Question 4

What was created when the Bretton woods system ended?

Answer 4

• G7 in 1975

- G8 in 1997

Question 5

What is the IMF?

Answer 5

A bank of last resort.

Question 6

What did the IMF have to do with the Global Financial Crash? What happened?

Answer 6

The US were giving out sub-prime mortgages, and had other countries invest into them, which were known as securities, and this meant the US would give some of the debt to other countries. So, when the bank released that they over spent, and didn’t have any money left, it had a knock on effect.
The IMF encouraged the de-regulation of the banks, and didn’t predict that this could happen.

Question 7

What did the IMF do to help the recovery after the global financial crash?

Answer 7

They brokered rescue packages for Pakistan, Iceland, Hungary and Ukraine, as well as providing $700 Billion of crisis lending to its member states.

Question 8

Name 3 strengths of the IMF

Answer 8

• Global economic stability in the early post war period.
• A last resort means that countries tend to find other options first
• A source of expertise and information which states can use to stabilize their economy.

Question 9

Name 3 weaknesses of the IMF

Answer 9

• US dominated
• Promotes western financial interests though the practice of neo-liberal economies.
• Provides SAPS

Question 10

What is the World Bank?

Answer 10

They help the poorest countries to develop agricultural and infrastructure.

Question 11

What is the world bank doing to help Rwanda? What has been achieved?

Answer 11

• They are helping though the reliance of cash crops. This helps promote productivity.
• They are given money to ‘smart agriculture’ to improve irrigation and farming.

Question 12

What criticisms have been made of the world bank helping Rwanda?

Answer 12

• Deforestation; the environmental impact, such as increased flooding.
• Unsustainable; machinery cannot be used, so its inefficient.
• Not enough is spent
• Encourages cash crops

Question 13

Name 3 strengths of the world bank.

Answer 13

• Worked with the UN to halve poverty in the world by 2015
• They evolved from being an organisation that funded big infrastructure projects to one that focuses on promoting development and poverty reduction
• Important source of information though its regular reports.

Question 14

Name 3 weaknesses of the world bank.

Answer 14

• US dominated
• Promotes cash crops/SAPS
• Not enough is spent for them, to properly develop.

Question 15

What is the WTO?

Answer 15

They deal with trade, and helps disputes over it.

Question 16

Recent example of disputes over trade

Answer 16

• Bananas; US v EU

- Air craft dispute.

Question 17

Name 3 strengths of the WTO.

Answer 17

• Very successful in reducing tariff barriers
• More democratic than the IMF and World Bank
• By promoting free trade the WTO in fact helps raise living standards around the world.

Question 18

Name 3 weaknesses of the WTO.

Answer 18

• US dominated
• WTO is too powerful
• WTO is a rich states club

Question 19

What is the G7 and the G20?

Answer 19

Economic forums, that discuss economic issues, following the fall of the Bretton woods (G7), and to promote financial stability (G20)

Question 20

Name 3 strengths of the G7.

Answer 20

• A forum where states can discuss common concerns openly and honestly.
• An agreement is easier to make
• All the member states have similar interests and economies.

Question 21

Name 3 weaknesses of the G7.

Answer 21

• Rich states club.
• The shift in the world economy towards emerging economies has undermined legitimacy.
• Its not as rich as it used to be- 1980’s- 70% Now- 50%

Question 22

Name 3 strengths of the G20.

Answer 22

• It represents 2/3 of the world population and 85% of the global GDP and 75% of world trade.
• It works closely with a number of international organisations including UN, IMF and world bank
• More diverse of all economies

Question 23

Name 3 weaknesses of the G20.

Answer 23

• Members aren’t thee 20 most rich countries in the world
• Lack of transparency and accountability
• It pledges are voluntary and not necessary delivered.

Question 24

What is the north south divide?

Answer 24

Brandt line- the north is typically more developed and more likely to be apart of IGOs.
The south is less developed and more likely to be dependent on exports, they are also not really apart of IGOs. Often used by northern states.
But, southern states are starting to join IGOs like the WTO and G20