Lecture 1/2

Question 1

The Emergence of Global Institutions (Global institutions)

Answer 1

• Manage, regulate, and police the global marketplace

- Promote the establishment of multinational treaties to govern the global business system

Question 2

World Trade Organization (WTO) (Global institutions)

Answer 2

• Polices world trading system and ensures nations adhere to the rules established in WTO treaties
• Succeeded the General Agreement on Tariffs and Trade (GATT)
• 162 nations accounted for 98% of world trade (2016)

Question 3

International Monetary Fund (IMF) (Global institutions)

Answer 3

Promotes order in the international monetary system

Lender of last resort

Question 4

The World Bank (Global institutions)

Answer 4

Promotes economic development using low-interest loans

Question 5

The United Nations (UN) (Global institutions)

Answer 5

Maintains international peace and security
Develops friendly relations among nations
193 member countries
Promotes respect for human rights
Is a center for harmonizing the actions of nations

Question 6

The Group of 20 (G20)(Global institutions)

Answer 6

Finance ministers and central bank governors of 19 largest world economies
Represents 90% of global BDP
A forum for a coordinated policy response to the financial crisis of 2008-2009

Question 7

Can the International Court of Justice be Effective?

Answer 7

The International Court of Justice (www.icj-cij.org) is the principal judicial organ of the United Nations (UN). Of the six principal organs of the UN, it is the only one not located in New York (United States); instead, the seat of the Court is at the Peace Palace in The Hague (Netherlands). The court’s role is to settle, in accordance with international law, legal disputes submitted to it by countries and to give advisory opinions on legal questions referred to it by authorized United Nations organs and specialized agencies.

Question 8

Is the shift toward a more integrated and interdependent global economy a good thing?

Answer 8

Many experts believe that globalization is promoting greater prosperity in the global economy, more jobs, and lower prices for goods and services
Others feel that globalization is not beneficial

Question 9

Anti-globalization Protests

Answer 9

• Began with WTO protest in December 1999 in Seattle
• Protest turned violent
• Protestors fear globalization has detrimental effects on living standards, wages, and the environment
• Theory and evidence suggests these fears are exaggerated

Question 10

Globalization, Jobs, and Income (The Globalization Debate )

Answer 10

• Falling trade barriers destroy manufacturing jobs in wealthy economies (U.S. and western Europe)
• Service activities increasingly outsourced to nations with lower labor costs
• Supporters say benefits outweigh the costs
• Outsourcing allows company to reduce its cost structure and as a result, can reduce prices
• OECD studies show that while gap between poorest and richest segments of society has widened, in most countries, real income levels have increased for all, including poorest segment
• Many advanced economies report shortage of highly-skilled workers and an excess of unskilled workers

Question 11

Globalization, Labor Policies, and the Environment (The Globalization Debate )

Answer 11

• Lack of regulations in less developed countries
• Adhering to environmental regulations increases costs of manufacturing
• Supporters argue that tougher regulations lead to economic progress
• Studies show a hump-shaped relationship between income levels and pollution levels

Question 12

Globalization and National Sovereignty(The Globalization Debate )

Answer 12

-Critics worry economic power is shifting away from national governments and toward supranational organizations such as the WTO, the European Union (EU), and the UN
-Supporters argue that the power of these organizations is limited to what nation-states collectively agree to grant
>The organizations must be able to persuade members states to follow certain actions
>Without the support of members, the organizations have no power

Question 13

Globalization and the World’s Poor (The Globalization Debate )

Answer 13

-Critics argue the gap between rich and poor has gotten wider and the benefits of globalization have not been shared equally
>Many of the world’s poorest nations are under totalitarian regimes, suffer from endemic corruption, have few property rights, are involved in war, and are burdened by high debt
>United Nations adopted Millennium Goals
. Eight economic and human development goals for the world