Global systems and Global Governance Flashcards
Globalisation
A process whereby national economies, societies and cultures have become increasingly interconnected/integrated through the global network of trade,communication, transportation and migration
Global governance
The steering rules, norms, and regulations used by global organisations, such as the united nations to regulate human activity at an international scale
A movement of political integration aimed at negotiating response to problems that affect more than one state or region
What is the focus of globalisation on?
Focus has primarily been on economic relationships such as international trade, international direct investment (FDI) and international capital flows
Globalisation has been expanded to encompass cultural, social, technological and healrh related factors
What is a nation state?
A nation state is a political unit where the state and nation are congruent
International trade
International trade = The exchange of capital, goods and services across international boarders.
Inbound trade is defined as imports
Outbound trade is defined as exports
Capital flows = The movement of
Capital flows = The movement of money for the purpose of investment, trade or to produce goods/services
Usually regarded to as investment into a production operation
BRIC
An acronym used to identify a group of four countries - Brazil, Russia, India and China - whose economies hace advanced rapidly since the 1990s. Sometimes South Africa is added to the list so it becomes BRICS
- Four largest economies outsie of OECD (organisation for economic co-operation and development - rich mans club)
- Only developing economies with annual GDPs of over 1 trillion
- They sustained better growth than most during the great recession
- China became the worlds largest exporter
- Brics are increasing their trade with oneanother: Chinese-indian trade has soared as is likley to reach 60 billion this year
- China has become the largest market for the fast industrilisating countries of east asia
Diaspora
A large group of peopel with a similar heritage or place of origin who have moved and settled in places all over the worlds
Economic leakage
Refers to a loss of income from an economic system. It most usually refers to profits sent back to their base country by tncs (profit repatriation
MINT
An acronym reffering to the more recently emerging economies of Mexico, Indonesia, Nigeria and turkey
Trans-national corporation (TNC)
any enterprise that undertakes foreign direct investment, owns cor controls income gathering assets in more than one country, produces goods and services outside its country of origin or engages in international production
Branch plants
A manufacturing production or service facility operated by a parent company in another city or country
Horizontal integration
When a company merges with another company in the same stage of production
e.g. Kraft foods and Cadbury
Involves improving links between different countries and also between units of the same corporation in more than one country
Vertical integration
Derscribes an industry where one compant either owns or controls multiple stages in the production
Vertical disintegration
Refers to when big brand name corporations, such as nike, bypass production completley by sourcing products from suppliers rather than directly employing factory workers themselbes
Glocalisation
Is a mashup of globalisation and local. It describes the process in which TNCS adapt what they offer depending on where in the world they work or at least market it differently
Merger
This occurs when two companies combine to form a new entity with one of the orginal companies ceasing to exit
Aquisition
This happens when one company (acqurier) purchases a majority stake in another company (target) which continues to operate under its own name and legal strtucfure
Agglomeration
When companies in similar industries locate near each other because of the benefits gained by sharing ideas and resouces - agglomeration economies
Multiplier effect
A situation where an initial injection of investment or capital into an economy at any scale in turn creates additional income by for example increasing employment, wages, spending and tax revenues
Export processing zones
Refers to a phenomenon developed by host countries within which goods were imported cheaply, infrastructure was provided and normal restrictions concerning foreign ownership of assets was waived.
Cross investment
An increasing tendency for those countries which have their own TNCs to also be the destination country ( host country ) for other countries TNCs.
Cumulative causation
Refers to when transnationals may set up in a new country and this may rapidly attract many more businesses into the area.
Autonomy
A country’s ability to self govern
Transfer pricing
The deliberate manipulation of pricing to reduce taxes to the host country
OECD
Organisation for economic cooperartion and development.
Membership includes the industrialized countries of western europe, north america, japan and australia
The rich mans club
Remittance payments
Refers to the transfers of money made by foreign workers to family in their home country.
Remittances are becoming increasingly important source of income for developing countries
Human capital
The skills and knowledge that make a person valuable as a worker and therefore an economic entity contributing to wealth
International migration
The movement of people across international boundaries
Global governance
A movement of political integration aimed at negotiating responses to problems that affect more than one state or region
It is the way in which global affairs which affect the whole world are managed - cant be managed by single nations e.g. climate change
Process of Global Governance
Countries come together to govern issues, co-operation is negotiated between countreis who agree to abide by similar rules given in signed treaties and international law
Global Commons
Global commons = resources domains or areas that lie outside the political reach of any one nation state where enviromental sustainability is crucial e.g. Antartica
How does GG work on differing scales?
- Trade agreements set byglobal institutions affects how trading haooens internationally e.g. EU interntional institution
- Department for international trade ( national institution) decides what the UK imports and where
- A regional institution such as a warehouse recieves the international products and distributes them
- Local shops then by the international product
Deregulation
removal of governmental rules, regulation and laws from the operation of business
removal of restrictions on the movement of capital
FDI
investment made by a government/large company into physical capital or assets of foreign enterprises.
Dominated by developed countries (inflows and outflows)
EU and North America dominate out of developed countries
repatriation of profits
profits made abroad by companies are returned to the home country. Often a flow back to developed country.
Leakage from the economy of the host country
Economic leakages
economic loss of profits back to companies owned outside of the host country
Aid
Financial support for poorer countries, mainly from rich countries
Many types: multinational, bilateral agreement, emergency aid, development aid.
may have conditions
Bilateral agreement
Agreenement between two countries
ADs and DIS of aid
Provides humanitarian relief but can promote dependency rather than self-reliance
Remittance Payments
Transfer of money paid to workers in foreign countries back home to their families.
2nd most important form of income to developing nations.
Incoming cash boosts the economy of the recipient country and provides hard currency
E.g. India diaspora send us 79 bn home in 2018
The world economy
Interactions of prices supply and demand increasingly operating at a global scale
Affected by global events
e.g. 2008 financial crisis
What are the social factors of globalisation
Social indlues families becoming more interconnected, through FT and transport time e.g to australia, and the exchange of cultural goods and ideas
What are the economical factors
Trade, global supply chains, tncs etc
Cultural factors of globalisation
Ability to travel further and easily gain greater knowledge and understanding of cultures/sharing foods
Political factor
Countries working together in international organisations (un/eu)
What is the theory of global village
Countrirs thinking/acting globally
E.g. world economy 2008 financial crisis, COVID 19 lockdowns
Rapid integration of worlds economic sustems 1990s tech revolution trade blocks
Examples of AID
World bank
ODA - contributions from developed countries to developing
Flows of labour
national and international migration of people globally
Economic migrants
earn money and send home as remittances
E.g. Nepal -> gulf/middle east 25% of gdp came from remittances 16k young skilled men migrated each month in 2014
What are the patterns of migration
Most migrants come from developing South Asia, AFrica and Latin America to richer North America and Europe
Gulf syayes (qatar, uae, suadi arabia have seen a construction boom attrating lots of migrants
Past 25 years most migration from Asia to NA and Europem
Gulf and se asia becoming more attrative to migrate to
f migrati
Wheres the largets intaregional flow of migration
Between south and West Asia
Between 2010 and 2015 3 million workers were migrated
Latin to North america
Africa neighbouring regions
Flows of products
Flows of manufactured goods increasing due to demand from affluent developed countries
Global shift
Global shift from HDES to LDEs because of low prodcution coss and mass production in nees/ asia have low wage production
Wheres the largest manufacturing country
CHINA
What has faciltated flows of products
- Reeduction in costs and creation of trade blocs
- Transaction costs reduced by improvements in flows of data
- Containerisation
- Air transport
- WTO reduced trade barriers such as tariffs
- Regional trading blocs provide tariff free trade
Containerisation
cheaper more effcient transport, reduced transport time and costs
Good for long flows of products
Perishable goods use air transport
Flows of services and information
Services - economic activities traded withput production of materials goods
High and low level services
High level services
banking, insurance, investment, advertisement
Located in HICS London, Tokoyo, newy york where they are the global financial centres
L
Low level services
Decentralised to LICS
Low level include communications and call centres
Located in LICS asia
E.G India economic success from service sector, they have 20% lower labour costs benefit from their engish speaking and education
Movement of information
Movement of data from and migration of people, communications transfers finanical and news
Through email and social media
Transfers of cultures, ideas, lamgauge, tech design business etc
Large amount of data shared instantly
Contributes to knowledge economy
Improved networks - fast broadband
Social media - interconnected
Global marketing
promoting and selling of goods amd servies globally
One campaign for all
have a global brand
one good sold globally
Comparative advantage, economies of scale
Prodcution then
Was in hics during industrial revolution (UK AND USA)
LICS were still exploited by TNCS
Production today
NEES/LICS - china
HICS - factories shut down - deindustrisation
Services high and low HICS AND LICS
Production future
Possible back to HICS?
Productionn distribution
1954/past manufacturing concentrated in HIC industralised western europe and consumed here
NOW decentralised by TNCS to LICs deindustrlisation as a result in UK
Distribution and consumption
Past- HICS where demand was high
NOW- expanded globally as nees have de,and more products as disposable incomes increase
Containerisiation more easily traded
Future - NEES increasing as become more developed HICS decrease as become more sustainable?
