International Political Economy

Question 1

IDEOLOGIES & SYSTEMS

Answer 1

Dramatic recent change in the political systems of many countries
In particular, a move towards market-driven economies in Eastern Europe and China
Political ideologies (beliefs, theories & doctrines) interwoven with economics

Question 2

Democracy:

Answer 2

A system of government in which the people directly or through their elected officials, decide what is to be done e.g. UK, US, New Zealand

Question 3

Totalitarianism:

Answer 3

A system of government in which one individual or party maintains complete control and either refuses to recognise other parties or suppresses them e.g. Communism (Cuba), Theocratic (Iran), Secular (North Korea)

Question 4

Market-driven economy:

Answer 4

Goods and services are allocated on the basis of consumer demand

Question 5

Centrally determined economy:

Answer 5

Goods and services are allocated based on a plan formulated by a committee that decides what is offered

Question 6

Mixed economies:

Answer 6

Economic systems characterized by a combination of market- & centrally-driven planning

Question 7

Privatisation:

Answer 7

The process of selling government assets to private buyers

Question 8

Divestiture:

Answer 8

A process by which a government or business sells assets

Question 9

Contract Management:

Answer 9

A process by which an organization (such as the government) transfers operating responsibility of an industry without transferring the legal title and ownership

Question 10

Nationalisation:

Answer 10

A process by which the government takes control of business assets, with or without remuneration of the owner

Question 11

Transnational rules and regulations that enhance economic trade & cooperation among countries Results in:

Answer 11

• Trade creation

- Trade diversion

Question 12

Trade creation:

Answer 12

Members of an economic integration group focus on goods & services with a comparative advantage & trade extensively with each other

Question 13

Trade diversion:

Answer 13

Members decrease trade with non-member countries in favour of trade with each other

Question 14

Free Trade Area:

Answer 14

Barriers to trade (such as tariffs) among member countries removed (e.g. NAFTA – now USMCA)

Question 15

Customs Union:

Answer 15

Tariffs between member countries eliminated and a common trade policy toward non-member countries established (e.g. Andean Community)

Question 16

Common Market:

Answer 16

Elimination of trade barriers among member countries, a common external trade policy and mobility of capital, labour & enterprise among member countries (e.g. early European Union)

Question 17

Economic union:

Answer 17

Deep form of integration involving free movement of goods, services, capital, labour & enterprise among member countries and full integration of economic policies (e.g. European Union now)

Question 18

Political union:

Answer 18

Full economic integration, unification of economic policies and a single government (e.g. the USA)

Question 19

European Union (EU):

Answer 19

A treaty-based institutional framework managing economic & political cooperation among 27 member countries

Question 20

European Free Trade Association (EFTA):

Answer 20

A free trade area including Iceland, Liechtenstein, Norway and Switzerland

Question 21

US-Mexico-Canada Agreement

Answer 21

(USMCA – formerly NAFTA): A free-trade area founded 1989, renegotiated 2020; comprising United States, Canada & Mexico

Question 22

Andean Community:

Answer 22

An economic (customs) union from 1969, including Bolivia, Colombia, Ecuador & Peru + Associate members

Question 23

Mercosur: Free trade group

Answer 23

(customs union) founded 1991, consisting of Argentina, Brazil, Paraguay, Uruguay & Venezuela + Associates

Question 24

FTAA:

Answer 24

Free trade agreement of the Americas, not yet implemented; possibly 35 countries from N., C., & S. America and the Caribbean

Question 25

Asia Pacific Economic Cooperation (APEC):

Answer 25

From 1994; 21 Pacific Rim nations; trade barrier reduction; visa-free travel; business & technical cooperation

Question 26

Comprehensive & Progressive agreement on Trans-Pacific Partnership (CPTPP):

Answer 26

Free trade agreement between 11 Pacific Rim countries (New Zealand, Australia, Canada, Japan, Malaysia, Singapore, Mexico, Peru, Chile, Vietnam & Brunei) signed 2018

Question 27

Civil society:

Answer 27

is a group of individuals, organizations and institutions that act outside government & market to advance diverse interests, including opposition to global business

Question 28

Strategic alliance:

Answer 28

is a business relationship in which two or more companies work together to achieve a collective advantage
These alliances can take many forms, e.g.:
Research cooperation
Marketing cooperation
Licensing of a product or technology for a specific market region