Global Systems and Global Governance Flashcards
what is globalisation?
the process of the worlds economies, political systems and cultures becoming more strongly connected to each other
what is globalisation caused by?
the movement of information, capital, products, services and labour between different countries
when did globalisation start to accelerate?
the 1980s
what are the 5 factors that promote globalisation?
- flows of information
- flows of capital
- flows of products
- flows of services
- flows of labour
how does flows of information promote globalisation?
- can be spread across the world quickly and easily
- people in different countries can communicate and work together (email, social media)
- increasing flows of infrmation are making the world more interconnected
what is capital?
money thats invested
-its spent on something to produce an income or increased profit
what is foreign direct investment?
capital invested into foreign countries
why has manufacturing in more developed countries decreased?
lower labour costs overseas
is international trade in maufactured goods increasing or decreasing?
increasing
what are services?
economic activities that arent based around producing any material goods
what has allowed services to become global industries in recent decades?
improvements in ICT
what can services be split into?
low level and high level
where are high level services?
they tend to be concentrated in cities in more developed countries
where are low level services?
in less developed countries
why are companies increasingly relocating low level services?
labour is cheaper
what are flows of labour?
movements of people who participate in the workplace from one country to another
why are some highly skilled workers moving to more develped countries?
wages and working conditions are better
why do unskilled workers move to more developed countries?
to look for work because of unemployment and low wages in thier own countries
what is marketing?
the process of promoting and selling products and services
why has marketing had to become global?
many products and services are sold all over the world, rather than just in the country where they are produced
how does global marketing give economies of scale?
it is cheaper to have one marketing campaign for the whole world, rather than a different campaign for every country
what are economies of scale?
the cost advantages that enterproses obtain due to size
how can global marketing create a global brand awareness?
consumers around the world identify a name or logo with a particular product or service, so they will purchase that product rather than a lesser known competitor
why does marketing need to be adapted to regional markets?
different populations have different laws and cultural attitudes
what is globalisation a result of?
- new systems
- technology
- relationships
what do systems include?
ways of working, procedures and methods of organisation that allow a particular function to be carried out
what are country relationships based on?
trade and common rules
what governs the flows of capital between cuntries?
the global financial system
what are financial systems based on?
companies called investment banks
what is the main role of investment banks?
to help companies raise capital by selling shares on behalf of those companies
what are investors?
people or groups who buy shares
what do investors get?
a fraction of the profits that the company makes
what did investment banks create?
new financial products that made foreigh investment less risky
what is financial deregulation?
relaxed the rules about what banks were allowed to do
- allowing banks to charge people more for their services
- letting banks invest in a greater range of businesses
- removing barriers to capital coming in and out of a country
why did the financial deregulation involve removing barriers to capital coming in and out of a country?
to make it easier for investment banks to buy and sell shares and other products across the world
what happened in the 1980s to make the financial system more global?
- infomation technology allowed investors greater access to information
- investment banks created new financial products
- financial deregulation
- removing barriers
what did the changes in the 1980s, to make the financial system more global, do?
- greater range of companies getting involved in finance
- enabled investment banks to take on a greater number of services
what governs the flows of products between countries?
the global trade system
what is trade primarily regulated by?
countries governments
what do the governments controlling trade do?
- control which products they let into the country and at what price
- tarriffs
- non tarrif barriers
- banning of certain products
what are tariffs?
taxes on products coming into the country
do controls make products more or less expensive abroad and to consumers?
more
how can countries make trading products cheaper?
they can enter a trade agreement
what is a trade agreement?
one country agrees to remove controls in exchange in exchange for the other country doing so
what are trade agreements between two countries called?
bilateral trade agreements
what are multilateral trade agreements?
trade agreements between several countries
what is the global trade system governed by>
the world trade organisation (WTO)
what does the WTO do?
- sets rules on how countries can trade with each other
- acts as a forum for countries to negotiate trade deals with each other and settle trade disputes
what do uniform metal containers allow for?
more goods to be loaded onto ships at once and transferred straight onto other forms of transport
what have uniform metal containers made it easier to do?
move goods quickly and cheaply around the world
what have communications satellites allowed for?
relatively cheap wireless communication between two devices regardless of where they are
what do communication satellites allow companies and people in rural areas to do?
access the internet and communicate with others
what do optic fibre cables allow?
fast communication between two devices, allowing almost instant communication between two people
how can large companies benefit from economies of scale?
by purchasing specialised equipment and using product lines. they could also buy raw materials at a lower price as they can buy in bulk
what is outsourcing?
when a company pays another company to do work that in the past may have been done in house, usually to save cost
why does trade make war less likely?
if countries need each other to buy and sell products, it would not be in their interest to be at war
what does interdependant mean?
they rely on each other
how do countries rely on each other for economic growth?
products are produced by one group of countries and consumed by another group of countries
how does politics make countries rely on each other?
to solve issues that cannot be addressed by just one country
why does interdependence cause inequality?
tends to bring more benefits to developed countries rather than less developed countries because the flows of people, money, ideas and technology are unequal
what is remittance?
migrants sending money back to their families or home communities
why are flows of money unequal?
money often flows from developed countries to less developed countries and less developed countries rarely have the capital required to invest in other countries
how can flows of money bring benefits to countries?
- foreign companies can take advantage of cheap raw materials and low labour costs, while the host country can benefit from foreign capital and expertise
- foreign aid used to improve living standards and rebuild local infrastructure after a disaster
what is the issue with foreign aid creating dependency?
it gives governments little incentive to improve their own countries
how can unequal flows of captial cause conflict?
foreign aid can find its way to armed groups and help t fund conflict
how could companies pressure less developed countries to create uneual flows of capital?
may pressure governments to pass laws that make it cheaper to invest there
what is neoliberalism?
state owned companies were privatised and government spending was cut
what are the benefits of neo liberalism?
it has increased free trade which has led to more development within countries and less conflict between some countries
what are the negatives of neo liberalism?
increased inequalities, conflict, and injustice
why could neo liberalism lead to conflict?
if private companies and free trade in a less developed country are threatened by the decisions of that countrys government, developed countries may believe their intervention is justified, leading to conflict
how has globalisation led to unequal flows of technology?
it mainly flows from developed countries to less developed countries
how do unequal flows of technology lead to inequalities?
developed countries can afford the latest technology, whereas less developed countries cant, so with the technology they can make products more cheaply and have better access to information and services
how does the unequal flow of technology lead to comflict and injustice?
repressive governments of less developed countries have used weapons technology sold to them by developed countries to stop protests from their own people
how can developing and emerging countries drive global systems to their own advantage?
with alot of money and technology they have alot of control over the global economy and the political events
what governs the global financial system?
- the international monetary fund (IMF)
- the world bank
what does the International monetary fund (IMF) monitor?
the global economy and advises governments on how they could improve their economic situation
-gives loans to countries with ecnomic problems
what does the world bank provide?
loans to less developed countries to invest in areas like health, education and infrastructure
why do sme people think global financial institutions, like IMF and the world bank, and reinforcing unequal power relations between different countries?
- they are both based in the USA (less developed countries have less influence)
- loans are conditional
- WTO generally works to reduce trade barriers between countries, but many companies keep them in place, reducing imports from less developed countries
what is international trade?
the import and export of goods and services between countries
has the volume of trade increased or decreased since the 1980s?
increased
how is the pattern of global trade changing?
deveoped countries remain the biggest global traders, but some emerging economies are catching up
why are more companies opening themselves up to international trade?
by removing barriers to trade which is partly to do with with formation of trade blocs
what is fairtrade?
a way of trading that supports people in less developed countries who make products that are exported to develeoped countries
what is foreign direct investment?
when a person, company or other groupspends money in anther country in order to generate a profit
what are foreign investrs attracted by?
- the size of the market
- the stability of the market
- the possibility of extracting resorces for themselves
- the ability to access financial services
how has the pattern of foreign direct investment changed?
until the 1980s developed countries mainly invested in other developed countries, since developed countries have begun investing more in emerging economies and developing countries
do emerging economies invest in less developed countries?
yes
what is ethical investment?
when a person, company or group only invests in areas that are considered socially responisble
how can complanies limit trade?
uisng tariffs and non tariff barriers
why do some countries limit their trade with tariffs and non tariff barriers?
to sheild their industries from foreign competition
what is protectionism?
countries sheilding their industries from foreign competition using tariffs
what are the world trade organizations’ rules on how countries should trade with each other?
- cant give a country special access to their market and not the rest
- countries should promote free trade
- countries should act predictably in their trading
- there should be fair competition
what are trading blocs?
associations between different governments that promote and manage trade. They remove trade barriers, while keeping common barriers to countries who arent in the bloc
why are many trading blocs regional?
they make it easier for countries to trade with their neighbours
are trading blocs ever based around specific industries?
yes
what are special econmic zones (SEZs)?
areas that have different trade and investment rules to the rest of a country. They increase trade while keeping barriers in the rest of the country
what do special econmic zones increase the volume of trade with?
emerging economies and less developed countries
where does most trade in the world take place?
between developed countries
who do most less developed countries trade with?
emerging economies and developed countries