Global governance: Political and economic

Question 1

The International Monetary Fund (Surveillance, Lending, Strengths, Weaknesses)

Answer 1

Surveillance:
IMF can monitor the economic policies of member states and will warn them if they believe that their policies are likely to jeopardise growth

Lending:
Member states can access loans from global lenders

Strengths:
-IMF emergency loans restores confidence in a member state facing a balance of payments crisis

Weaknesses:
-IMF failed with surveillance as it didn’t warn member states that their deficits were too high, making them vulnerable to financial shock

Question 2

The World Bank (Strengths & Weaknesses)

Answer 2

Reduce poverty by lending money to ‘middle income’ countries to improve their economies and their standard of living
World Bank loans require low or little interest repayments

Strengths:
World Bank structural adjustment programmes have encourages developing countries to focus on production areas if they have a natural advantage
The World Bank’s gender equality strategy encourages female education and enhance female opportunities

Weaknesses:
It is too focused on free-market structural adjustment programmes
China being the second biggest recipient of the World Bank loans is controversial given that they have the second biggest economy

Question 3

The World Trade Organisation (Strengths & Weaknesses)

Answer 3

Created to judge trade disputes between member states

Strengths:

• The expansion of WTO has been responsible for encouraging connections between countries, so reducing conflict
• One of the WTO’s body has resolved a number of trade disputes which could have escalated to trade wars

Weaknesses:

• The democratic rules of the WTO can mean it can be difficult to reach decisions
• The WTO fails to protect workers rights

Question 4

G7 (The group of 7) (Weaknesses)

Answer 4

The seven strongest economies in the developed world
Russia was a member, when it was known as G8
The leaders meet annually to try to achieve a collective approach to global problems
Bretton Woods = Trying to create economic stability

Weaknesses:
A forum for like-minded allies rather than for problem solving or resolving differences of opinions
Meets infrequently
Little accountability (states cannot be held accountable)

Question 5

G20 (The group of 20) (Weaknesses):

Answer 5

Represents the biggest economicas in both the developed and the developing worlds (19 individual countries & the EU)
Its leaders meet annually to discuss how best to respond to global issues
Reviews and studies policy issues concerning the international financial stability

Weaknesses:
Its transparency and accountability has been questioned by critics

Question 6

Significance of how global economic governance deals with the issue of poverty (North/South divide):

Answer 6

North/South divide:

• It contrasts the poverty of the less developed agricultural South with the prosperity of the prosperity of the more industrialised and developed North
• Life expectancy is lower in the Global South due to diseases

Question 7

Neocolonialism

Answer 7

The control of less-developed countries by developed countries through indirect means