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The Contemporary World > THE-GLOBAL-ECONOMY > Flashcards

THE-GLOBAL-ECONOMY Flashcards

1
Q
  • A system of trade and industry across the world that has emerged due to globalization. In other words, the way in which countries ‘economies have been developing to operate collectively as one system
A

THE GLOBAL ECONOMY

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2
Q

The origins of a global economy can be traced back to the expansion of long-distance trade during the period of 1450-1640, which Wallerstein has labeled the “long sixteenth century”.

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THE GLOBAL ECONOMY

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3
Q

It is a historical process, a result of human innovation and technological process. It refers to the increasing integration of economies around the world, particularly through the movement of goods, services, and capital across borders. It may also refer to the movement of people (labor) and knowledge (technology) across international borders (IMF, 2008).

A

ECONOMIC GLOBALIZATION

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4
Q

It refers to the hierarchical arrangements of individuals and groups in societies around the world.

A

GLOBAL STRATIFICATION

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5
Q

According to sociology, the best way to understand global stratification, is to think of the world composed of categories of nations, based on their degree of wealth and poverty, their level of industrialization and economic development, and related factors.

A

Classifying Global Stratification

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6
Q

The different typologies of global stratification are (FRP)

A
  1. First Typology
  2. Replacement Typology
  3. Popular Typology
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7
Q

FIRST TYPOLOGY (3world)

A

a. First World – The Western Capitalist democracies of North and Europe, and certain other nations (Australia, New Zealand and Japan).
b. Second World – Nations belonging to the Soviet Union.
c. Third World – All the remaining nations, almost all of them from Central and South America, Africa and Asia.

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8
Q

REPLACEMENT TYPOLOGY

A

a. Developed
b. Developing
c. Undeveloped

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9
Q

POPULAR TYPOLOGY

A

a. Wealthy (or high income)
b. Middle-income
c. Poor or low-income

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10
Q

THEORIES OF GLOBAL STRATIFICATION

A

▪ Modernization Theory
▪ Dependency Theory
▪ World System Theory

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11
Q

Modernization Theory

A

According this theory, rich nations became wealthy because early on they were able to develop the correct beliefs, values, and practices

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12
Q

Dependency Theory

A

According to this view, the poor nations never got the chance to pursue economic growth because early on they were conquered and by European ones.

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13
Q

World System Theory

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This theory states that that some nations become modernized by exploiting other nations

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14
Q

Five Institutions in the Modern World System
(Wallerstein (2006) enumerated the five institutions that are existing in the Modern World System)

A
  1. Market
  2. Firms
  3. States
  4. Household
  5. Classes
  6. Identities
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15
Q

It is defined as by Koester, (2000), is a state of affairs or a process of involving attempts to combine separate national economies into larger economies. It is a means of stimulating trade and improving the division of labor between participating countries.

A

MARKET INTEGRATION

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16
Q

TWO TYPE OF MARKET INTEGRATION

A
  1. Negtive Integration
  2. Positive Integration
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17
Q

reduces non-tariff and tariff barriers to trade as the main tool for integrating markets.

A

Negative Integration

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18
Q

Adjust domestic policies and institutions through the creation of supranational arrangements.

A

Positive Integration

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19
Q

Five forms of Market Integration (koester, 2000):

A
  1. Preferential Agreement 2. Free Trade Agreement (FTA)
  2. Custom Union
  3. Common Market
  4. Economic Union
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20
Q

It involves lower trade barriers between those countries., which have signed the agreement.

A
  1. Preferential Agreement
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21
Q

Reduces trade barriers among member countries to zero, but each member still has autonomy in deciding on the external rate of tariff for its trade with non-member countries.

A
  1. Free Trade Agreement (FTA)
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22
Q

Represents a higher stage of economic integration. In this form, countries agree to abolish tariff and non-tariff to trade in goods flowing between them. They agree to a common external tariff.

A
  1. Custom Union
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23
Q

Free movement of labor and capital within the member-countries. Hence, the intention of a common market is to integrate both product and factor markets member-countries.

A
  1. Common Market
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24
Q

It is the highest form of economic integration. In addition to the conditions of a common market, member-countries also agree to integrate monetary, fiscal, and other policies.

A
  1. Economic Union
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25
Q

INTERNATIONAL FINANCIAL INSTITUTIONS
There are currently the three major international/financial economic institutions. The World Trade Organization, the International Monetary Fund, and the World Bank.

A

The World Trade Organization
The International Monetary Fund
The World Bank.

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26
Q

The WTO is the only global international organization dealing with the rules of trade between nations. The goal is to ensure that the trade flows as smoothly, predictably, and freely as possible

A

▪ WORLD TRADE ORGANIZATION (WTO)

27
Q
  • It is an autonomous organization affiliated to the UNIO. From an initial strength of 31 members, it now commands a 125 strong membership. The functions of IMF include:
    1. Works as short-term credit institution;
    2. Provides for the orderly adjustment of exchange rates;
    3. Acts as a reserve member-countries to borrow from;
    4. Provide foreign exchange loans against current transaction, and;
    5. Provides international financial consultancy service.
A

▪ INTERNATIONAL MONETARY FUND (IMF)

28
Q

It is an international intergovernmental organization for providing long-term loans on easy terms for specific developmental projects. The functions of the World Bank may be grouped into five major categories:
1. Provides loan services to member governments;
2. Provides development loans on soft term to poor member nations;
3. Provides support to private or joint sector projects;
4. Provides insurance guarantees to foreign investors;
5. Setting-investment-related disputes among member nations through conciliation and arbitration.

A

▪ WORLD BANK (WB)

29
Q

These are integral parts of economic growth.

A

GLOBAL CORPORATIONS

30
Q

The contemporary global corporation is simultaneously and commonly referred to either as a multinational corporation (MNC), a transnational corporation (TNC), an international company or a global company (Steger, Battersby & Siracusa, 2014).

A

GLOBAL CORPORATIONS

31
Q

Have investment in other countries but do not have coordinated products offering in each country.

A

a. Multinational Corporations (MNC)

32
Q

Are importers and exporters, typically without investment outside of their home country.

A

b. International Companies

33
Q

Have invested in and are present in many countries

A

c. Global Companies

34
Q

More complex organizations, which have invested in foreign operations, have a central corporate facility but give decision-making, research and development and marketing power to each individual foreign market

A

d. Transnational Corporations (TNC)

35
Q

Power of Global Corporations

A

a. Economic control
b. Political influence
c. Social and cultural influence
d. Environmental impact

36
Q

MULTINATIONAL CORPORATIONS (MNCs)
The Role of Multinational Corporations (MNC)
Lapko (2005) discussed the different role of multinational corporations:

A

The Role of Multinational
1. MNCs act as modernizers of the world economy;
2. Promote efficiency and growth of the world economy;
3. Promote regional agreement and alliance; and
4. Increase of money circulation in the economy

37
Q

It is the fundamental basis of the competitive commodity economy at global system level.

A

GLOBAL INTERSTATE SYSTEM

38
Q

A system of international relations. (International Relations (IR) is defined as the study of interconnectedness of politics, economics and law on a global level.)

A

GLOBAL INTERSTATE SYSTEM

39
Q

A relationship between countries in which each country is dependent on another for necessary goods or services (Surugui and Surugui, 2015).

A

❖ Economic Interdependence

40
Q

A process whereby countries cooperate with one another to reduce or eliminate barriers to the international flow of products, people and capital.

A

❖ Economic Integration

41
Q
  • It refers to the integration of components within political system.
  • The integration of political system with economic, social, and other human system; the political process by which social, economic and political become integrated.
  • It includes the creation of regional of regional political institutions. It is a process that developed much more slowly outside of Europe.
A

❖ Political Integration

42
Q

REGIONAL AND ECONOMIC PARTNERSHIPS / INSTITUTIONS

A

ASEAN | EUROPEAN UNION | APEC |NAFTA | OECD

43
Q
  • It was established on 8 August 1967 in Bangkok, Thailand with the signing of the ASEAN Declaration (Bangkok Declaration) by the founding fathers of ASEAN namely, Indonesia, Malaysia, Philippines, Singapore, and Thailand. Brunei Darussalam (1984), Vietnam (1995), Lao PDR and Myanmar in 1997 and Cambodia (1999) makes up what is today the 10 member-state of ASEAN. 9 (asean.org).
  • The ASEAN Vision 2020, adopted by the ASEAN leaders on the 30th Anniversary of ASEAN, as a concert of Southeast Asian Nations outward looking, living in peace, stability and prosperity, bonded together in partnership in dynamic development and in a community of caring societies.
  • The ASEAN Community is comprised of three pillars, namely the ASEAN Political Security Community, ASEAN Economic Community and ASEAN Socio-Cultural Community
A

Association of Southeast Asian Nation (ASEAN)
(One Vision, One Identity, One Community)

44
Q
  • The EU began in 1957 when six countries signed Treat of Rome. The six countries were called the European Economic Community.
  • The first six countries were Belgium, France, Italy, Luxembourg, Netherlands and Germany. The Union reached its current size of 28 EU countries.
A

EUROPEAN UNION (EU)
(United in Diversity)

45
Q

The goals of the European Union are

A
  1. Promote peace, its values and the well-being of its citizens;
  2. Offer freedom, security and justice without internal borders;
  3. Sustainable development based on balanced economic growth and price stability;
  4. Highly competitive market economy with full employment and social progress;
  5. Combat social exclusion and discrimination;
  6. Promote scientific and technological progress;
  7. Environment protection;
  8. Enhance economic, social and territorial cohesion and solidarity among EU countries;
  9. Respect its rich cultural and linguistic diversity; and
  10. Establish an economic and monetary union whose currency is the Europe.
46
Q

The EU in the world: (THD)

A
  1. TRADE.
    The European Union is the largest trade block in the world. It is the world’s biggest exporter of manufactured goods and services, the biggest import market for over 100 countries.
  2. HUMANITARIAN.
    The EU is committed to helping victims of man-made and natural disasters worldwide and supports over 120 million people each year.
  3. DIPLOMACY AND SECURITY.
    The EU plays an important role in diplomacy and works to foster stability, security and prosperity, democracy, fundamental freedoms and the rule of law at international level
47
Q

ASIA-PACIFICIC ECONOMIC COOPRATION (APEC)
(Advancing Free Trade for Asia-Pacific Prosperity)

A
  • The idea of APEC was first broached by former Prime Minister of Australia Bob Hawke during a speech in Seoul, Korea on January 31, 1989. Ten months later, 12 Asia-Pacific economies met in Canberra, Australia to establish APEC. The founding members were Australia, Brunei Darussalam, Canada, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and the United States. China, Hong Kong, China and Chinese Taipei joined in 1991. Mexico and Papua New Guinea followed in 1993, Chile acceded in 1994. In 1998, Peru, Russia, and Vietnam joined, taking the full membership to 21.
48
Q
  • Operates as a cooperative, multilateral economic and trade forum. It is the only international intergovernmental grouping in the world committed to reducing barriers to trade and investments without requiring its members to enter into legally binding obligations.

APEC Members Economies report progress toward achieving free and open trade and investment goals through Individual Action Plans (IAPs) and Collective Action Plans (CAPs).

A

APEC: Multilateral Economic Forum

49
Q
  • In 1994, North American Free Trade Agreement (NAFTA) came into effect creating one of the world’s largest free trade zones and laying foundations for strong economic growth and rising prosperity for Canada, the United States of America, and Mexico.
A

NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA)

50
Q
  • European Economic Cooperation (OEEC) was established in 1948 to run the US-Financed Marshall Plan for reconstruction of a continent ravaged by war.
  • By making individual governments recognize the interdependence of their economies, it paved the way for a new era of cooperation that was to change the face of Europe.
  • Canada and USA joined OEEC
A

ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT (OECD)

51
Q
  1. Restore confidence in markets and the institutions that make them function.
  2. Re-establish healthy public finances as a basis for future sustainable economic growth.
  3. Foster and support new sources of growth through innovation, environmentally friendly’ green growth strategies and the development of emerging economies.
  4. Ensure that people of all ages can develop the skills to work productively and satisfyingly in the jobs tomorrow.
A

Today, OECD focused on helping governments around the world to;

52
Q

The United Nations is an international organization founded in 1945.It is currently made up of 193 Member States. The mission and work of the United Nations are guided by the purposes and principles contained in its founding charter.

A

THE UNITED NATIONS

53
Q

Prior to the establishment of the United Nations, the League of Nations existed as the premier organization for international cooperation. Established in 1919 under the Treaty of Versailles, the League of Nations was established to ensure international peace, security and cooperation between nations following the First World War. At its height, the League of Nations had 58 members. In the 1930s, its success waned as the Axis Powers (Germany, Italy, and Japan) gained influence, eventually leading to the start of World War II in 1939.

The Charter is the constituting instrument of the UN, setting out the rights and obligations of member states, and establishing the United Nations organs and -procedures. 50 nations and several non-governmental organizations attended and signed the Charter, committing to maintaining international peace and security, developing friendly relations among nations and promoting social progress, better living standards and human rights. The UN officially came into existence on October 24, 1945 after ratification of the Charter. The day is now celebrated each year around the world as United Nations Day.

A

Prior to the UN

54
Q

The name “United Nations,” coined by United States President Franklin D. Roosevelt, was first used in the “Declaration by United Nations” of 1 January 1942, during the Second World War, when representatives of 26 nations pledged their Governments to continue fighting together against the Axis powers. The UN was founded following the Second World War, in 1945 when the Nations were drafted at the UN Conference on International Organization in San Francisco, California.

A

Founding of the United Nations

55
Q

The main organs of the UN are the:

A

● General Assembly
● Security Council
● Economic and Social Council
● Trusteeship Council
● International Court of Justice
● UN Secretariat (un.org)

56
Q

The UN as an International Organization has several roles to perform in the international scene (un.org):

A
  1. Maintain International Peace and Security
  2. Protect Human Rights
  3. Deliver Humanitarian Aid
  4. Promote Sustainable Development
  5. Uphold International Law
57
Q

Globalizations promote development in all aspects of human life through interdependence and integration. But it is without flaws. Globalization also creates “governance gaps” that are evident in the business and human right situation the world faces at present.
Weiss and Thakur (2010) discussed the five gaps in global governance and how the United Nations aim to fill in the gaps.

A

GLOBAL GOVERNANCE AND THE UNITED NATIONS

58
Q

Five (5) Gaps in Global Governance

A
  1. Knowledge Gap
  2. Normative Gaps
  3. Policy Gaps
  4. Policy Gaps
  5. Compliance Gaps
59
Q

A phenomenon happens, more often than not, there are little information on the origin, causes, the gravity of the phenomenon and the solutions that may be applied. The United Nation can provide a platform wherein such phenomenon may be discussed, studied, and confronted so that new knowledge can be placed in the limelight, improved, and later on disseminated worldwide.

A
  1. Knowledge Gap
60
Q

A norm can be defined statistically to mean the pattern of behavior that is most common or usual that is a widely prevalent pattern of behavior. Alternatively, it can be defined ethically to mean a pattern of behavior that should be followed in accordance with a given value system.
Collective’s norms, on the other hand, are shared patterns of behavior. As to when and how norms became global, no one knows. No theory, research, or any data are available to explain, how “i9nternational norms” became international.

A
  1. Normative Gaps
61
Q

Martha Finnemore and Kathryn Sikkink Postulate a three-stage life cycle of norms:

A

a. A new norm emerges and a norm entrepreneur advocates it
b. Enough actors agree on an emerging norm to create a tripping point, or norm cascade
c. Actors internalize the new norm so that it becomes taken for granted and norm conforming behavior becomes routine, requiring no further justification.
The United Nations provides an organizational platform for advocacy in the first stage as well as the preferred forum for cascade in the second and for seeking affirmation, reaffirmation, and hopefully compliance in the third and final.
As a Universal Organization, the United Nations serves as a forum for seeking normative consensus on how to deal with global problems in the best possible way.
Actors play a vital role in establishing a universal room.

62
Q

Weiss and Thakur (2010) defined policy as an interlinked set of governing principles and goals and the agreed programs of action to implement those principles and achieve those goals.
Analyzing policy gaps entails two challenges:
First: Who are the actors and relevant policymakers? Who made and implemented international policy?
Second: What are the types of actors who play an ever expanding role in the various sectors of the nation?
Our policies are somewhat influenced by the international organizations that we are part of. To put things in balance, the policymakers at the UN are actually the world body’s principal political organs, the Security Council and the General Assembly.
The United Nations Environment Programme (UN Environment) is the leading global environmental authority that sets the global environmental agenda, promotes the coherent implementation of the environmental dimensions of sustainable development within the United Nations system, and serves as an authoritative advocate for the global environment (unenvironment org.) one of its program is the promotion of biodiversity

A
  1. Policy Gaps
63
Q

Policies created, whether international or national, must be housed in an institution that has resources and autonomy. One of the most obvious explanation, for institutional gaps is that resources allocated are not proportionate to the problem. This is applicable to the problems of most countries all over the world. Some of these problems are improving the welfare of women and children, human rights protection, and the proliferation of HIV-AIDS.
International institutions are important because their existence is to deal primarily on specific problems without any lace of politics. Take for example the protection of children’s welfare. This program is under the United Nations Children’s Fund (UNICEF). Funds are allocated by the state to support this program. The Department of Social Welfare and Development is the one implementing the protection of welfare of children.

A
  1. Policy Gaps
64
Q

The fifth and final gap is the compliance gap. Compliance measures must include mechanism to identify defections and defectors from agreed upon norms and commitments in the realm of international governance as well as incentives that reward cooperation and disincentives that punish defection, including the use of force to bring those who have not complied back into line.
Approaching in analyzing compliance gaps has three facets:
● Implementation
● Monitoring
● Enforcement
One of the most difficult and challenging in filling up global governance gap is compliance gap. The role of international organizations will come in very helpful. The World Trade Organization and the General Agreement on Tariffs and Trade help in monitoring member-states who comply in enforcing trade agreements.

A
  1. Compliance Gaps

The Contemporary World (5 decks)

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