Unit 5 Flashcards
What is economic globalization?
The economic networks that are growing more interconnected, a worldwide market. Talks about the economic actors that are unconstrained by political borders.
What does economic globalization lead to?
- Reduction in state control over economies
- A deepened cross-national connections among workers, goods, and capital
- Spread of ideas, technology, and information across international borders
- Spread of jobs across these borders
International economic organizations
IMF
WTO
EU
NAFTA
The world bank
International monetary fund (IMF)
Works to foster global monetary cooperation and the stability of the international monetary system.
Countries: UK, Russia, China, Mexico, Nigeria, Iran.
The world bank
Provides financial and technical assistance developing countries to reduce poverty and support economic development.
Countries: UK, Russia, China, Mexico, Nigeria, Iran.
The world trade organization (WTO)
Helps develop rules of trade between nations with the goal of ensuring that trade flows smoothly and safely.
Countries: UK, Russia, China, Mexico, Nigeria
Why do countries join IEOs?
- INcrease access to global trade
- To be accepted into the international community
- To gain easier access to markets
- To grow their economy / GDP per capita
How does membership in an IEO influence economic policy?
- Promotes economic globalization policies
- Requires policy changes in order to join
- Requires policy changes in order to recieve financial assistance
Multinational coporations (MNCs)
A coporation that has facilities and assets in at least one country other than its home country.
What challenges do MNCs pose to countries?
- Conflict over labor and pay in different countries
- Challenges with environmental damage
- Conflict over land rights
- Conflict over taxation
Neoliberalism
Seeks to transfer the control of economic factors from the public sector to the private sector by reducing gov intervention in the economy and promoting free-market economy.
The challenges of neoliberalism
- Increased demand on gov by civil society groups
- Protests
- Arrests of portests
- Impositions of social media restrictions
Policies regarding private ownership of industry and capital in AP6
China: SEZs (Special economic zones) along the coast
Mexico: Privatization and increased competition in Mexico’s oil industry (PEMEX)
Nigeria: State-owned Nigerian National Petroleum coporation (NNPC)
Russia: Putin’s renationalization of oil-natural gas industries and imposition of foreign investment limitations.
Privatization
Gov-owned industry transferred to privately-owned
Nationalization
Privately-owned industry —> gov-owned
How can globalization challenge sovereignty?
- Foreign direct investment and multinational corporations can pose a challenge to a government’s foundational economic political principles.
Ex: MNCs have created corruotio and gov’s dependency on oil. - Cultural influences that accompany investmenr and trade can provoke domestic backlash.
Ex: China economic reforms led to judicial reform. - Increased economic development can cause environmenta; degration and accompanying health issues.
Ex: China emphasis on economic growth over environmental protection - Foreign governments can bring political and economic pressure on countries whose actions offend them
Ex: Iran growth slowed after sanctions intended to stop Iran’s uranium enrichment program.
Differences between UK and China industries
UK: Most natural resources are controlled by private industries (China state-owned)
UK: Private industries pay taxes to gov to fund the gov
China: State-owned industry profit help fund
Similarities between UK and China industries
Natural resources are important to the national economy
Governmental response to global market forces
- Implement domestic reform in response to internal demands\
Ex: China economic reforms and anti-corruption efforts
Nigeria: Attempt to reduce corruption in oil industry - Control domestic policy debates
Ex; UK leaving EU
Iran response to protests
Extend regional influence to deflect criticism and improve economic conditions
Ex; Russia efforts to maintain trade relationships and influence with former soviet counrties
Mexico: Participation in NAFTA
Economic liberalization
Reduces its role in the conomy and embraces free markey mechanisms such as eliminating subsidies and tariffs, privatizing gov-owned industries, and opening the economy to foreign direst investment.
Neoliberal economic policies
Removal of barriers and restrictions on what internal and external economic actos can do.
Consequences of neoliberal economic policies
- Reduction in inflation
- Increase in national income
- Growing inequality in wealth distribution
- political corruption
- environmental pollution
- urban sprawl
- uneven economic development
- poor infrastructure
- regional migration
What is an International Organization?
Organization joined by member states working toward a common interest.
- Have own rules and guidelines that member states have to follow.
Examples of International Organizations
- International Monetary Fund (IMF)
- United Nations (UN)
- World Bank