IR Flashcards
In a few sentences, describe the basic principles of trade and finance established by Bretton Woods.
The Bretton Woods system was a post-WWII arrangement for managing the world economy, established in 1944 and ending in 1971. It was based on the standard of the US Dollar set equal to 1/35 oz. of gold. Its main institutional components are the World Bank and the International Monetary Fund.
Which institutions were part of Bretton Wood?
IMF, World Bank, GATT
IMF
(International Monetary Fund): An intergovernmental organization that coordinates international currency exchange, the balance of international payments, and national accounts. It was formed to encourage exchange rate stability and set exchange rates.
World Bank
an organization established in 1944 to provide loans for the reconstruction of European economies after WWII. The main borrowers later became third world and Eastern European countries.
GATT
(General Agreement on Tariffs and Trades: a global framework formed in 1947 that eliminated or reduced quotas, tariffs, and subsidies to promote trade; acts as an intermediary on trade disputes and clarified trade rules; replaced by the WTO in 1995.
The financial side of the Bretton Woods system collapsed in the early 1970’s, replaced by a new system for dealing with the relationship among currencies. In one sentence, what was that new system?
SDR (Special Drawing Right), is a system created by IMF to replace the gold standard with floating exchange rates where a shared currency can be exchanged for other currencies within central banks owned by sovereign states.
On the trade side, the Bretton Woods system was deepened with the creation of the WTO. When did that happen?
The WTO replaced the GATT in 1995, expanding its traditional focus on manufactured goods to include services and intellectual property. It created monitoring and enforcement mechanisms and shapes the practices and expectations of over 160 member states.
What is “globalization”?
Globalization is the increasing integration of the world in terms of communications, culture, and economics; may also refer to changing subjective experiences of space and time accompanying this process.
What is/was the Washington Consensus on international economic issues and development strategy?
The Washington consensus is a market-based approach to help emerging nations develop. It is sometimes called mercantilism or neoliberalism. It is a 10-step economic system that involves promoting free market policies (promotes free global trade over just domestic trade), macroeconomic stabilization, economic opening (trade), and expansion of domestic market forces. The IMF, the World Bank, and the US Treasury abide by this consensus. (Market oriented, supply and demand)
What is the Beijing Consensus on those same issues, and how does it differ from the Washington Consensus? Why is this sometimes called “neo-mercantilism”?
The Beijing Consensus, AKA The Chinese Economic Model (1976), replaces the trust in a free market with a more hands on approach by the state for economic development. It is called neo-mercantilism because it encourages exports, discourages import, controls capital movement, and relegates currency decisions to the government. (Government controlled and regulated, regardless of supply and demand)
What types of arguments are made against the Washington Consensus by the anti-globalization movement?
Anti-globalists make arguments against the Washington Consensus because the neoliberalist approach is too inflexible to work in some other contexts. Anti- globalization advocates advocate for human rights and protection of natural resources in states that may be negatively impacted by forced globalization (unsafe work conditions, child labor, depletion of natural features, etc.). They believe in putting power in the hands of the people rather than market corporations.
During the Cold War period, there were many communist nations. Now there are only a handful (can you name them?). Please briefly explain what “communism” means, and how it served/serves to shape both government and economics in a country.
Communism: political and economic doctrine that aims to replace private property and a profit-based economy with public ownership and communal control of at least the major means of production and natural resources. There is state ownership, central planning, bureaucratic elite, single party governance. The government sets production goals (central planning) and assigns work to each individual. The competition that exists are individuals who compete with each other to get a certain role within society.
Cuba, China, North Korea, Laos, Vietnam
In International Relations, we use two distinct meanings of the term “regime.” Please explain what those are. Please give an example of each.
International Regime- rules, norms, and procedures where international actors converge around a certain issue. An example would be the Geneva Conventions procedures on treatment of POWs. A cool new set of regime will be rules for space exploration.
Domestic Regime- What you typically think of when you hear that a government went through a “regime change”. A domestic government of a state, generally considered illegitimate by its opposition. An example can be the outcome of the 2020 Belarussian presidential election, where President Lukashenko sought and won another term, which many domestic actors (and international as well) have deemed fraudulent. The Lukashenko Regime is considered illegitimate by the opposition.
What is the significance of the Treaty of Westphalia for international relations, in two sentences?
The Treaty of Westphalia in 1648 ended the 30 and 80 years wars and established the basic rules that have defined the international system, including the sovereignty and territorial integrity of states as equal and independent members of an international system. Since then, states defeated in war have been generally allowed to continue as independent states rather than being subsumed into the winning state.
Please describe the UN system, making reference to its origins.
The UN system is an international organization founded in 1945 when the League of Nations failed to counter aggression leading up to WWII. It is made up of sovereign states that have not empowered the UN to enforce its will within states’ territories except with the consent of those states’ governments. Its basic purpose is to provide global institutional structure through which states can sometimes settle conflicts with less reliance on the use of force.
