Global Political Economy Final

Liberal Finance in the 80s and 90s

-1970s and 1980s saw increasingly fast capital flows due to tech advances. States also eliminated capital controls and conducted liberalization. -In the 1990s and 2000s there was also the rise of hedge funds and sovereign wealth funds (investment companies created by governments) -use of derivatives, often futures and options rose. futures, buy a stock in the future for a specified price today option buy a stock at a specified price for a specified price, you can back out later if price goes down, but you lose a fee. hedge funds: you buy assets and sell them short over short and long time frames. offer a lot of money when they do well, but can be risky

China Entering the labor market

-China is becoming the leading destination for FDI, as the potential wealth and market share that China represents gives them leverage in negotations with foreign TNC's. -since Chinese economic forms have been introduced, it is estimated that over 150 million people migrated from rural to urban areas. Many of these migrants have been exploited by employers. -another problem is that the control of Chinese production rests in the hands mainly of foreign TNCs, China has not been able to develop their own global brands. -China's entry into the global economy has lifted millions out of poverty and allowed Western workers to purchase goods at lower prices -China's low labor costs have hurt western workers, US wages are undercut by Chinese low labor costs.

The Changing North-South and South South Political Economy of Biolfuels

-In the realm of climate change and carbon markets more powerful developing countries are building on the language of south-south cooperation and sustainable development to promote investment in and resources extraction from other developing countries -developing country leaders are not supplanting developed countries as financers and consumers of biofuels, instead they are bridging the divide between the north and south by engaging in new partnerships with developed countries. -they are creating incentives for short term profit over longterm sustainability. Biofuels have the potential to drive up food and land prices and increase pressure for land conversion and deforestation. -biofuels are non-petroleum based fuels, generally derived from plants and plant oils. Countries like the US and Brazil see them as a way to reduce fossil fuel use. They are attractive because they are shift to a new form of fuel, not a shift in patterns of consumption. -as EU countries hesitate on biofuels, developing countries may provide alternative markets for biofuels, especially as their economic growth leads to increasing energy demands. New south-south relationships will be significant drivers of biofuel production. , biofuels seems poised to lead to more degradation of vulnerable ecosystems in poor countires

Growth of Trade since WWII

-Since the end of WWII, trade has increased more rapidly than production. Which is a clear indicator of the increased internationalization of economic activities and the greater interconnectedness that has characterize the world economy. -growth in trade has been uneven and there have been periods of recession when trade growth has slowed, but the overall trend has been positive. Majority of trade occurs between developed countries too. -process of trade liberalization under GATT has been uneven geographically too. -1947-1973 was one of unpresedneted expansion for the world economy. -in 1973 there was new unemployement, oil crisis, staglflation, Countries started to use non-tariff baries again, GATT failed to stop this use.

Sovereign Weath Funds

-Sovereign Wealth Funds: governments use their surplus cash to invest, buy shares of businesses

Bretton Woods System

-US dollar fixed to gold, encouraging epople to have faith in the unchanigng value of the key currency. Other currencies were fixed to the U.S. dollar. this allowed other countries to have their exchange rate adjusted as needed. Bretton woods built IMF, World Bank.

Owain a Tale of Two Regimes

-access to medicine is a big problem in public health today, about 1/3 of world's population lacks access to drugs and die from curable diseases. -this often occurs because people are too poor to provide an adequate economic incentive for biomedical research and development of new medicines for their particular disease burden. -there has been a market failure to incentivize the necessary r and d to generate appropriate drugs. This is called the 90/10 gap, where 90% of pharmaceutical and biomedical r and d are targeted toward just 10% of the global burden of disease. Pro-Access Regime: made up of new health intiatives and philanthropic foundations like Global Health Partnerships, Global Fund to fight AIDS, Etc They seek to correct problems regarding access by stimulating r and d for neglected diseases, facilitating lower prices for select diseases, financing purchcase by donor-recipient countries. They intervene in the market. These framings contributed to the formation of a regime that substantially eroded the treatment of medicines as public goods. The frame of reference was shifted to a discourse of private goods whose allocation and production are subject to the global-market mechanism Many scholars have noted that the world's poor often simply do not provide sufficient demand for drug firms to include them in their R&D and production strategies -pro-access regime is reactive and only partially corrective to some of the negative outcomes produced by Intelectual Property rights regimes associated with the WTO. (the second regime) -IPR regime rewards invention to ensure that there are economic and social incentives for the generation of future knowledge. Often citied as a key to the technological and economic progress of the global North. A patent confers, after all, a monopoly and the ability to set an artificially inflated price for a fixed period of time. Such prices are routinely set at rates that the poor cannot afford to pay out of pocket, and governments of developing country cannot subsidise consumption

Rise of the Euro

-countries tried to coordinate their economies as a result of turbulence in foreign exchange markets. This was because in the 1980s there was a rising U.S. trade deficit and exchange rate volatility. -European solution to this problem was the creation of the ECU, a composite currency for bookkeeping purposes. Also created Exchange rate mechanism which laid the ground work for a single currency, the Euro. -In 2002, many European countries phased out their national currencies and introduced the Euro. Operation of Euro is overseen by the European Central bank, which sets a single interest rate for all member states. -Euro provides members with price stability which menas low inflation. -some objected to Euro because countries would lose their ability to devalue their currency if an economic shock hit their country. -a single monetary policy might now suit all the different countries.

Hopewell the Rise of Brazil and China at the WTO

-for decades the international economic institutions have been dominated by the US and other western industrialized states. However now this is changing as Brazil and China and India are increasingly active in global governance. Rejection of economic explanation: greater economic power -> greater assertiveness in global leadership. Evidence: China more economic power but more passive in WTO leadership; Brazil and India less economic power but more assertive in WTO leadership based on developing country coalitions ->influence above economic weight. -China's rise has been more tied to its growing economic might, rise of Brazil and India has been driven primarily by their mobilization and leadership of developing country coalitions. -developing countries have historically been highly disadvantaged within the institution, largely excluded from decision-making -China has been a part of the developing nations coalitions and has let Brazil and India run their participation in the WTO. -Brazil and India joined forces to form a coalition of developing countries (called G20-T) that sought to block as US-EU proposal and propose an alternative. The emergence of the G20-T produced a tectonic shift at the WTO, putting an end to the US and EU cartel over agenda setting. -The coalition put issues like rich country agricultural subsidies and market access, as well as special safeguards for developing countries at the heart of the negotiations. -Brazil has major interests in low controls on imports since it is a big exporter, however India wants protections for developing countries. Brazil's alliance with India was of tactical importance, since it prevented Brazil from being perceived as a threat by other developing countries that were pro-protection like India. -India and Brazil have formed other coalitions, like the G33 led by India or the G110 -Brazil and India have also invested heavily in staff and resources dedicated to the WTO, giving them a diplomatic advantage

International Institutions and Feminist Politics

-gender is a category of distinction and a means of distributing power in global society, global discourses and international instiutions are suffused with constructs that help perpetuate gender ineqiaulity. -neoliberal economics and the Bretton Woods institutions construct economic agents as androgynous, hiding women's care work and their work in the home, and infusing government policies and the practices of firms with gender biases. -some see international instiutions as a way to bring women's issues into the mainstream -others see institutions as embodiment of existing rules and ideas on women's rights, reflecting the processes of power. -there is a tendency for social movements including feminism to institutionalize and for institutions to gain their legitimacy from social movements Berkovitch: institutions are cultural rules giving collective meanings and values to particular entities and activities. -individuals are also empowered to resist by drawing on the rules of different institutions. There is an element of human freedom in choosing which rules and institutions to rely on Hierarchies produce domination but also empower, by create inequality but also give women opportunities from categorical bounds, like in households women have access to household resources. -instiuttions can be valuable tools for feminists to enact change, need to gain control. However they also currently reinforce the current gender status quo. Feminists need to change institutions. Institutions give women a powerful voice, tools to shape the world.

Theoretical Perspectives on Gender

-gender is a social construction and not a natural state. It refers not to biology but to the ideological and material relations that exist between men and women. -Gender issues are not dealt with much by liberalism, realism or Marxism -conventional GPE has little to no interaction with feminist scholarship or gender issues. -feminist scholars have argued that societal instutions are not neutral, like many people have said, and instead do not provide the same starting point or incentive structures for men and women. For example, property rights institutions may restrict and shape the institutions of women. -conventional economic analysis, with its focus on the market often disregards the full value of women's labor and economic contribution. For instance, conventional economics often takes unpaid reproductive labor as a given, masking the real cost of reproducing and maintaining the labor force. National account statistics are only based on monetized values from market based transactions.

Neoliberalism and Women

-neoliberal economic policies have hurt women by forcing them to pay the price by taking up tasks performed before by the state or giving up their income to focus on caring for their family's immediate needs. These policies are dependent on women's unpaid labor.

Helleiner Global Financial Crisis

-one big cause was mortgage backed securities, packages of bundled morgages including subprime ones. People didn't see the risk and thought the system was stable. -credit risk was transferred and bundled in increasingly complex ways, its quality often became more obscure and underprised. Investor's more and more didn't know what was in these mortgage backed securities. -began in US with the bursting of the housing bubble and the growth of mortgage defaults, particularly those involving subprime morgages. -growth of self-regulation, company friendly regulation -investors relied too heavily on credit-rating agencies, who often issued overly positive ratings because of conflicts of interest (they were paid by the issuers). Thus the MBS's were worse than people knew. -invesments of lightly regulated shadow banks threatened whole system -also the large scale buying and selling of complex securities had increasingly taken place among a very small number of banks, thereby concentrating risk rather than dispercing them. This is why Bear Stearns fell. U.S. and Britain lobbyed for lax regulation in international forums, believing that less regulation would benefit their states disproportionately

Regional Trading Arrangements and Developing Countries: Understanding the Phenomena Pant

-one of the remarkable features of international trade has been the explosion of regional trading agreements after 1990. -RTA's do not lead to increased trade among countries and are in fact a de facto rationalization of growing trade relations among countries. Growth in RTA's is explained more by developments in international politics and the emergence of a multipolar world rather than by the conventional calculus of economic theory. -GATT requires that all countries don't raise their absolute tariffs vis a vis the rest of the world in FTA's however, FTA's obvious increase relative tariffs with the rest of the world since tariffs between the member countries decline. Static model of Viner: Trade diversion occurs because those excluded from an RTA now face relatively higher tariffs in exporting to the RTA countries since all countries of the RTA face zero tariffs in exporting to each other. The countries excluded from the RTA might find their exports to be uncompetitive relative to countries that are part of the RTA. -by forcing intra-regional trade in intermediate inputs, RTA's actually raise the cost of the production of firms in the RTA countries, making them uncomptetitve in the rest of the world while raising prices to consumers. -some say that RTA's are an extension of international politics in a multipolar world, countries move into RTAs as they search for the right political grouping.

Baker The New Political Economy of the Macroprudential Shift

-out of crisis came new ideas of macroprudential regulation -new macruprudential shift came about because of presence of prior ideas, advocates of ideas bcoming better positioned in professional networks, individual insiders willingly engaging in persuasion strategies and a increase in the explanatory capacity of those ideas to deal with future crises. Procyclicality refers to how during the up phase of a cycle, as asset prices rise, measured risk appears to fall. It is a concept therefore, that draws directly on Minsky's observation that the system appears safest precisely when it is at its most vulnerable. -focus of macroprudential approaches is the system as a whole so as to limit the costs of financial destress in terms of macroeconomic output. Top down requirements need to be implemented. -regulatory policy needs to be countercyclical, as in to induce institutions to build up capital cushions in good times so that they can be drawn down in bad times, thereby stabilizing the worst excesses of procyclicality by imposing constraints on private market actors during the upswing phase of a cycle. -old Basel concensus was that greater transparency, more disclosure and more effective risk management by firms would be effective regulation. Macroprudentialism refutes this consensus that emphasizes the dangers of overly complex financial systems. and seek to forge a new Basel consensus that emphasises procyclicality, externalities, herding and the dangers of overly complex financial systems -MPR implies a return to regulators telling banks what they should do. -MPS has moved from relative obscurity to the mainstream. Before electorates were uninterested in hearing arguments about unsustainable booms when things were going good. Governments also had little material incentive to slow the inflow of capital into their markets.

Developments for women in GPE

-post-1945 period has seen increased integration of women into the work force, more women are in paid employment than ever -service sector is main area of employment for women, it's a growing sector too -rise of export manufacturing industries in Asia has been reliant on female labor, and has increased female employment in Asia -female employment is also still clustered in traditional gender roles like community, social and personal services -in all societies, women earn less than man on average, because women do not reach higher managerial positions, have poor bargening power and less educational attainment.

Bakker Social Reproduction and the Gendered Economy

-the everyday activities of maintaining life and reproducing the next generation are increasingly being realiazed through the unpaid and paid resources of largely women as states withdraw from public provisioning, with the result that capitalist market relations increasingly infiltrate social reproduction. -now we see women's traditionaly caring activities increasingly performed in relationships that are commodified -the degree to which social reproduction becomes transnationalised will vary based on domestic support for social provisioning in both sending and receiving countries. More neoliberalism=more private social reproduction. neoliberalism has led to the progressive detachment of individuals from social networks and supports, while also downloading responsibility for systemic problems onto the individual. For instance, in the USA market rationality has articulated the family as the key site for meeting the needs of elder care.

Marketization of Reproducive Work

-the private sphere, where human life is generated and daily life maintined is becoming increasingly globalized and marketized. Acitivites that were once done in the household can now be bought for money and are sold through transnational structures. Domestic services, sex work and the purchase of brides are examples. -global sex trade has expanded since the 1970s. Women are exported from one country to another, and often this trade is based on implicit male violence. Women are treated as sexed beings and are assumed to be readily avaible for males.

Reminttences

-there has also been development of migrant communities, about 150 millon people live in countries other than the one of their birth. -this migrant trend has led to a surge in remmitences, money that migrants send home from their employment. Remittances are now large than FDI and foreign aid in many countries. China, India and Mexico have received much of this money, these remittances help reduce poverty in developing countres. They also have a positive effect on savings and exchange.

Debt Crisis

-third world indebtedness has been a major problem since the debt crisis in 80s. Many NGOs want the cancellation of developing country debt. Debt is a severe constraint on development, reducing the spending power of countries and their ability to fund social programmes. IT also weakens incentives to invest in the debtor country. Western countries have embarked on debt relief programs like HPIC intiative and MDRI intiative.

Micro-credit and Micro Finance: Functional and Conceptual Differences

-to help improve the social and economic conditions of former colonies, national and international agencies were created to transfer Western funds and materials. These programs were largely unsuccessful, due to lack of participation by the intended benificiaries in implementing these projects. -thus there was a switch to a bottom up approach, which views participation and development as essentially dimensions of development. -New policy regime accords greater roles to NGO's in distribution of aid. Micro-credit organisations are generally NGOs. -these NGOs provide small loans to poor communities for supporting self-employment and income generating activity. Rather than providing collateral, borrowers must making regular savings as a precondition for getting loans. -Micro-credit is a not for profit venture, Micro finance is a for profit venture. Micro credit programs are run by NGOs which depend on external finance. Micro finance programs set out to make a profit and become self-financing. -Microfinance is a developmental approach that provides financial as well as social intermediation. Financial intermediation includes the provisions of savings, credid and insurance services. While social intermediation involves organizing citizens' groups to voice their aspirations and raise concern for consideration by policy makers.

Rivoli China

-today China is the largest buyer of American cotton and is projected to soon produce more than 40% of the world's cotton textiles Race to the Bottom: manufactors are in constant search of the cheapest labor they can find, once they enrich a nation through development they flee it to find another cheap source of labor -many countries like South Korea and Taiwan that started out with sweatshops now have lost the race to the bottom and no longer produce textiles. But now thanks to those experiences and growth they have expanded to produce advanced goods like electronics and computers, and they have become global leaders in those fields. -In 2008 a new Chinese labor law was responsive to many of the workers' demands and is a significant expansion of labor rights in China -Chinese authorities have also responded to pressure to introduce new environemental protection laws. -as incomes have risen in China more workers are likely to eschew garment factory work, and factories have been forced to respond by wooing workers with higher salaries and better perks.

Bretton Woods Institutions

1) IMF: short-term balance of payments assistance/short-term financing. Change: approval of structural adjustment programs/Washington consensus for financing. 2) World bank: long term lending for post-war reconstruction/development financing. Change: focus on large infrastructure projects, basic human needs provision, SAPs, sustainable development.

Efforts to help Women

1946 UN created Comission on Status of Women -various UN conferences from the 70s to 80s highlighted gender gap and set objectives for international progress on womens' rights, brought gender policies into the mainstream. -Several millennium development goals focus on increasing women's rights -there has been more linkage between poverty and gender inequality and a recognition of the need for gender based solutions to combat poverty

1947-1981 Development

1947-1981 development: development is conceived as the project of a strong and active government. States were expected to find a balance between supply and demand, encourage consumption, grow domestic industries and provide a social safety net. The world economy between 1947 and 1971 experienced tremendous economic growth, but that growth faltered in 1971 with the collapse of the Bretton Woods system and the oil shocks of the 70s. Trickle down economics was also a theory later in this period, but it was soon debunked. Downturn in world economy in the mid 70s and the failure of industrialization and trickle down economics led to a new approach. ILO and World Bank argued for redisbribuion with growth.

1982-2008 Development

1982-2009 Development: Debt crises in Mexico and other places led to new approach of rolling back the state, this approach is often called the Washington Consensus. With the state being rolled back, NGOs were given a greater role in developing the economy. 2008-9 financial crisis may have led to a rethinking of neoliberalism, but it is unclear right now. There is a new view that developing countries are being severely hit through weaker trade and tighter global financing conditions though. -World Bank is the world's premier multilateral development agency. It provides loans to countries, develops international norms and resolves disputes. It espouses a liberal economic order, it receives a lot of critism from radical critics and environemtnalists.

2008 Financial Crisis

2008 Financial Crisis: came about because loans were extended to people who could not carry the debt load and the risk for those loans extended deep into the financial system. Financial firms experienced loses from exposure to bad morgages and risky derivatives. U.S. embarked on large bailouts and money injections to stimulate growth, but continental Europe did not. Rose questions of if new regulations are not put in place, what is to prevent a similar crisis from developing again.

anti-dumping duties

An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value. In the United States, anti-dumping duties are imposed by the Department of Commerce and often exceed 100%.

Arms Length Transaction

Arms Length Transaction: type of transfer price that does not take advantage of differential taxation or other polciies, the good kind of transfer price An arm's length transaction is a transaction in which the buyers and sellers of a product act independently and have no relationship to each other.

Basel Negotiations

Basel I: Basel I is the round of deliberations by central bankers from around the world, and in 1988, the Basel Committee on Banking Supervision (BCBS) in Basel, Switzerland, published a set of minimum capital requirements for banks. This is also known as the 1988 Basel Accord, and was enforced by law in the Group of Ten (G-10) countries in 1992. A new set of rules known as Basel II was later developed with the intent to supersede the Basel I accords. However they were criticized by some for allowing banks to take on additional types of risk, which was considered part of the cause of the US subprime financial crisis that started in 2008. Basel III: Basel III is intended to strengthen bank capital requirements by increasing bank liquidity and decreasing bank leverage Basil 1 and 2 set capital requirements for banks Basel II agreement then reinforced this approach, allowing large banks to use internal risk models to determine the amount of capital to put aside for overall credit risk

Club Goods

Club goods: not rivalrous because they belong to everyone in the club. But excludable because only members of club can buy it. Examples are DirectTV subscription.

Common Pool Resources

Common Pool Resources: public parks, fish stocks. Too many users, they degrade.

Conservative Technocentric Approach

Conservative Technocentric Perspective: central objective of economic growth is to satisfy the needs of humans. Capitalism will find solutions to environmental problems and enable growth to continue. Some argue that holding back progress in the name of protecting the environment will lead to economic catastrophe.

Monetary Policy

Controlling the Supply of Money

1980s Debt Crisis

Debt Crisis of 80s: intersts rates on international loans rose, increasing interest chanrges to developing states on their international loans. This led to recession. IMF played a big role in helping soothe the crisis. -liberalization of capital created this crisis in developing countries. -developing countries were desperate for funds to help them modernize, so they took out loans, economic recession made interest rates rise and made it difficult for developing countries to export so they fell into debt.

Does Leapfrogging Growth Strategy Work Zhi

Does Leapfrogging Growth Strategy Work Zhi -almost all fastgrowing market economies since the 1970s have embraced trade openness. -use of government policy to promote high tech and valued added industries, beyond what would naturally happen has also occurred in fastgrowing market economies This is called the leapfrogging strategy -this paper finds little evidence that leapfrogging can reliably lead to economic growths, but they find that openness is a key component of growth

Dollarization

Dollarization: moves by some states to reduce or eliminate their currency in favor of a foreign currency. This has happened in countries like Panama and El Salvador. They choose to hold a safer currency since these lose faith in their own due to inflation or devaluation. It also helps facilitate trade relations with a dominant economic partner. The disadvantage is that U.S. monetary policy has no incentive to suit the needs of your country.

Ecocentric Approach

Ecocentric Approach: founded on a rejection of continued economic growth and a critique of global capitalism. Current emphasis of society is organized on human wants instead of human needs. Natural restrictions on the earth's resource capacity are real. Degredation has arisen from a failure to repsect the equilibrium of natural ecosystems.

Economic Nationalist Approach to Environment

Economic Nationalist/Realist approach to Environment: Each states seeks to maximize their interests and thus international cooperation is difficult to achieve. Realists contend that cooperation on the environment will only be possible when it supports the interests of the dominant states. Flawed for its focus on states and emphasis on power, which is empirically unsustainable.

Environmentalism vs Ecologicalism

Environmentalism vs Ecologism : environmentalism is characterized as a manegerial approach to the environment within the context of present human practices, ecologism presupposes radical changes to humanity's relationship with nature. Ecologism gives nature its own value independent of human welfare and interests.

European Soverign Debt Crisis

European Sovriegn Debt Crisis: following 2008 a number of European states experienced severe problems with servicing their debt. Portugal, Spain, Greece and Italy were hard hit. Cost of debt of these countries rose. IMF and European states like Germany bailed out Greece, in return for Greece to slash its spending in a program of austerity.

External Causation THeory

External Causation Theory: underdevelopment is the result of external forces that constrain a societies ability to develop. -external economic exploitation,

Extraterritorial Regulation

Extraterritorial regulation: state demands that corporations that have headquarters in their state conduct global business according to the home state's rules. Example: forbidding trade with Cuba by U.S companies.

Factor Endowment Theory

Factor Endowment Theory: Developed by Eli Heckscher and Bertil Ohlin, countries will have a comparative advantage in those industries that concentrate on the natural advantages or the endowment of countries.

Fiat Money

Fiat Money: money that works only because people have confidence in it. Laws support money as legal tender. inconvertible paper money made legal tender by a government decree

ILO Conventions

ILO Conventions: call for freedom to collectively bargain, elimination of forced labor, child labor and discrimination.

Fiscal POlicy

In economics and political science, fiscal policy is the use of government revenue collection (mainly taxes) and expenditure (spending) to influence the economy.[1] According to Keynesian economics, when the government changes the levels of taxation and governments spending, it influences aggregate demand and the level of economic activity. Fiscal policy can be used to stabilize the economy over the course of the business cycle

Kuznets Curve

Kutznets Curve: plotted relationship between economic growth and equality. An inverse relationship between the two exists at early levels of development, but there is a more positive link as economic growth is increased.

Kyoto Protocol

Kyoto Protocol (1997): set binding greenhouse gas targets for industrialized countries. Allows for emissions trading (selling unused emissions to other countries that have exceeded their targets), allows a country with a binding commitment under the protocol to implement emission reductions projects in developing countries. 55 Countries comprising 55% of emissions in 1995 ratified it. But it is still insufficient, US hasn't ratified.

Liberal Technocentrism.

Liberal Technocentrism: environmental degredation arises from market failure, from a failure to fairly price the environment in the market. One must determine the real costs of resource use and then propose efficient solutions

Liberal Approach

Liberal Theories: cooperation on environment emerges from a recognition of the demands of interdependence. A globalized economy created shared bonds and interests, facilitating cooperation. Cooperation is made more feasible by NGOs and firms. Neglets the role of power in shaping institutions.

Rivoli Cotton

Lubbock Texas is center of the "silicon valley" of cotton production, a highly symbiotic and virtuous circle relationship between farmers, private companies, universities and government. Government and farmers support research that takes place in companies and universities. Govt also provides technical assistance and funding to farmers. -for over 200 years the US has been the undisputed leader of the global cotton industry -this is largely because of government subsidies, but there are other important factors too Bracero Program brought in workers from Mexico to work the fields, was extended under pressure from growers until 1964. Government guaranteed a certain number of workers to be picked up each day, and that the growers order for labor would be filled at a certain price. Congress gave the growers everything they asked for, allowing them to avoid competing in the labor market. -U.S. cotton subsidies increase the supply of cotton grown in U.S. and artificially decrease the price of cotton in the world market, lowering the income of farmers outside the U.S.

Managerial Environmentalism

Managerial Environmentalism: believes that an accomadation can be found between current economic activity and the long-term goal of sustainable development.

Modernization Theory

Modernization Theory: takes the view that underdeveloped socities are at an earlier stage of development. IF they adopt similar attiudes and social structures as developed countries they could modernize.

Multilevel Governance

Multilevel Governance: emerged from studies of the EU, posits that authority and policy making in Europe is shared across subnational, national and supranational levels. For instance, European commission can roll back national subsidies, ECB conducts monetary policy for all of EU. National govts are also sensitive to the demands of provinces and cities. --governance has started to take place more and more on regional, sub-national and global levels. Some aspects of state governance have shifted into the private sector too. -focus of multilevel governance is the vertical relationship of power and politcs running up and down at different levels. Are national states losing power to EU or NAFTA? Are National states losing power to provincial governmetns? -international organiztions provide forums for negotiating globalization rules and address collective action problems at the global level.

Neoliberalism vs Devlopemental State

Neoliberal School: advocates for export oriented industrialization, deregulation Developmental State School: advocates for state intervention, cite East Asian cases.

Guiding principles of International Trade regime

Non discirmination: MFN clause Reciprocity: when one county loweres tariffs, other country does the same. Transparency: any discrimination must be clearly visible, any tariffs must be known and NTBs like import quotas are banned MUlilaterlaism: we want to include the maximum number of countries.

North South Conflict

North South Conflict: refers to the existence of political differences and a diplomatic conflict between the advanced industrial countries and those of developing countries. Third world has been critic of liberalization, and the development regime of the west.

Portfolio Investment

Portfolio Investment: In economics, foreign portfolio investment is the entry of funds into a country where foreigners deposit money in a country's bank or make purchases in the country's stock and bond markets, sometimes for speculation

Private Authority

Private Authroity: where firms exercise decision making power over a particular issue area. Like Bond rating. Firms use cartesls, production alliances, private regimes to exercise power over an area.

pure public goods

Pure Public Good: neither rivalrous or excludable, example is national defense. Everyone is defended.

Radical Approach

Radical Theories: some argue that rivalry between capitalist states makes environmental cooperation unlikely. Developed countries of north dominate decision making, and thus southern concerns will be marginalized. Frequently underestimate the power of international institutions and forgets that socialist regimes failed to protect the environment too.

Regimes

Regimes: implicit or explicit principles, norms and rules about how states should behave States create regimes because they believe that a regular pattern of cooperation will bring them benefits. Some regime have strong legal framework, legal the WTO, which enforces rules through threat of legal sanction. -outside expertise, appeals to morailiity, distribution of money are used to get states to comply with regimes.

Reproductive Labor

Reproductive Labor: (always on final) time spent doing things that make it possible to live, having children, cooking, cleaning, finding mates. Commodified or not. Unpaid or paid. Marxian feminist concept. Often servants do these things in some culture

Sustainable Development

Sustainable Development: in the mainstream it is seen as development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Efficency in resource use is key, internalization of environmental costs in pricing decisions is key. -accepts prevailing global political economic structure. Economic growth provides the instruetns through which society can address environmental degredation.

TRIPS

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an international agreement administered by the World Trade Organization (WTO) that sets down minimum standards for many forms of intellectual property (IP) regulation as applied to nationals of other WTO Members Specifically, TRIPS requires WTO members to provide copyright rights, covering content producers including performers, producers of sound recordings and broadcasting organizations; geographical indications, including appellations of origin; industrial designs; integrated circuit layout-designs; patents; new plant varieties; trademarks; trade dress; and undisclosed or confidential information. TRIPS also specifies enforcement procedures, remedies, and dispute resolution procedures

Developments in Environmental Policy

Three Types of International Environmental Agreements in the first part of the 20th century: Wildlife and wildlife conservation, maritime pollution restrictions and limiting the spread of nuclear weapons. -UN Summits like UNCHE in 1972, UNCED in 1992 legitimized the environment as a concern for the international community Agenda 21: a framework formed in 1992 designed to halt environmental degredation, formed ad UNCED. -discovery of hole in the ozone layer in 1985 was also big, raised concern -Environmental disasters like Chernobyl, and Torrey Canyon disaster sprruing growing environmentalism movements. -states around the world have established environment ministries, international organizations have mainstreamed environmental issues. Firms have been pressured to be more green.

Transfer Pricing

Transfer Pricing: Transfer pricing is the setting of the price for goods and services sold between controlled (or related) legal entities within an enterprise. For example, if a subsidiary company sells goods to a parent company, the cost of those goods paid by the parent to the subsidiary is the transfer price. In principle, a transfer price should match either what the seller would charge an independent

UN Global Compact

UN Global Compact: asks corporations to incorporate 10 principles drawn from UDHR, ILO declaration of fundamental principals, UN convention against corruption, and others into their business practices. It does not monitor corporate practice or enforce anything. It just seeks to disseminate good practices. Many corporations abuse it even as they are members of the compact. UN way of trying to put a more humane face on globalization, prevent labor and environmental abuse.

Marshall PLan

US give money to rebuld western Europe and standup to threat of COmmunist takeover in Europe

Voluntary Export Restraints

Voluntary Export Restraints: one country agrees to limit its exports to a third country, usually because the importing country threatens to place barriers against the goods of the exporting country.

Eurocurrency Markets

a wide range of financial transactions that take place in currencies other than the currency of the state in which the buisiness is conducted. The primary reason for this is that state authroities do not regulate their activities if they are working with foreign currencies. Example of Cayman Islands.

Internal Causation Theory

begin from the assumption that the absense of development results from a failure of society to properly harness its resources in a way relevant to the demands of modern economic growth.

Washington Consensus

between 1980 and 1987 there was a agrement among many state, financial and corporate elites that th best way to develop and grow was to give free rein to market forces. Had broad support in IMF, World Bank, US Govt. Thatcher and Reagan helped implement it . -by the end of the 1990s the Consensus had been eroded, developments in Asia with countries like China and Korea showed that interventionist states could achie growth. -1997 financial crisis also was blamed on neoliberalism.

Most Favored Nation Clause

clause in GATT/WTO. Ensure that any concession granted to one member must be extended to all members. With exception of customs unions and free trade areas.

Constructivism

constructivists argue that knowledge and action are socially created. They examine how preferences are created and what impact they have on actors actions.

National Security Theory

countries need to be self-sufficient in the production of certain strategic industries

Import Substitute Industrialziation policy

denotes hig htariff policy to keep foreign products out, develop infant industries and indusrialize behind high protectionist barriers.

New Economy

driven by revolution in IT. Central element is importance of knowledge and technology as key drivers of economic growth. Role of science and tech is greater than ever before. Knowledge based Services are the most important sources of added value in economic accumualation. -internet has revolutionized communications through its ability to connect people and systems. tech has lowered unemployment and inflation.

Naim Bad Medicine

during the Cold War kleptocratic dictatorships often trade their allegiance to one of the two superpowers in exchange for its countenance of their corruption -now with the superpower contest over, such corrupt bargains hare dried up and the dirty deals are out in the open. -now the slightest hint of corruption at the highest levels of government becomes global news, many watchdog agencies have sprouted. -however today many believe that the war on corruption is actually undermining democracy because it helps the wrong leaders get elected and distracts societies from urgent problems. -Corruption has become the universal diagnosis for a nation's ills. -this false belief has made it hard to rally public support for other efforts like tax reform, which have become impossible to pass when the general assumption is that new public revenues will evaporate in corrupt hands

Comparative Advantage Theory

if a country specializes in the produces of goods and services where it is more efficient comparted to its competitors it will be better off

Stiblar Comment on Zhi Wang's Leapfrogging article

in the wake of the global financial crisis, economic strategies are changing, and the government's role in development models is moving away from the laissez-faire approach of neoliberals. -the old structural economics prefers an active role for government through the leapfrogging strategy. -the new structural economics prefers a more passive role for government, improving endowments to pursue a comparative advantage facilitating strategy. -two decide between the two strategies the critical question is what is more crucial for economic growth, the potentially positive effect of direct government intervention toward a more technologically sophisticated production structure, or the potentially negative effect of such intervention in defying a comparative advantage strategy based on the availability of factor endowments. -Leapfrogging works only for countries that are ready to upgrade their industries and enter new industries, it works because globalziaiton makes techonologies more accessible, enabling countries to leverage their competitive advantage by purchasing equipment -the argument that the comparative advantage of a developing country should determine its industrial strategy is wrong and leaves them lagging behind developed countries forever. Leapfrogging should be used instead

FDI (Foreign Direct Investment)

invesment made oustide the home country of the investing company in which control over the resources transffered remaisn with the investor. An example of foreign direct investment would be an American company taking a majority stake in a company in China. Another example would be a Canadian company setting up a joint venture to develop a mineral deposit in Chile.

Currency Controls

limit the availability of foreign currency for the purchase of foreign goods

EOI (Export Oriented INdustrialziing policy)

neoliberalism, market discipline, and export led growth. Climate conducie to foreign investment, limited role of state.

Epistemic Communities

network of professionals with recognized expertise in a particular area. They act as knowledge brokers who can mae a differece to the formation of international regimes. EX: Scientists and Climate Change

RTAs (REgional Trade Agreements)

past two decades have seen an increase in creation of RTAs, like NAFTA, ASEAN, TPP. Solution to difficulty of negotiate multilateral WTO agreements. Some think that these regional deals are discriminatory and innifiecient and will do damge to the natural flow of free trade.

Seignorage

profit made by a government by issuing currency, especially the difference between the face value of coins and their production costs.

Unequal Exchange Theory

radical theory that suggests that costs structures have been determined by imperialist plinder, and this makes it dificult for poorer countries to deevelop. Protectionism is needed to help poor countries operate on a level playing field. With protection, they will continued to be exploited in free trade.

Digital Divide

refers to unequal access to digitial tech. The costs of failing to keep pace with technological change are high.

Global Civil Society

role of NGOs organizations has been rising, infuluence global civil society

Infant Industry Theory

state should intervene to protect industries that have the potential to develop efficient production but would be destroyed by international competiton at the moment.

Postculturalism

stresses how reality is interpreted in many different ways. There is never a perfect fit between our language and what we are trying to describe. There is some doubt between the relationship between reality and how we communicate reality.

Mundell Fleming Model

stresses the tension between maintaining the ability of money to cross borders freely and the existence of fixed or minimally floating currencies, and the ability of a country to set its own interest rates to influence economic growth. Governments have to choose two priorities, out of independent monetary supply, stable exchange rates and free flows of capital. If independent monetary policy and capital flows, then exchange rates will move. If independent monetary policy and a fixed exchange rate, capital flows must be curbed. If capital flows and a fixed exchange rate, monetary autonomy must be sacrificed.

Quotas

the application of a quantitative restriction against goods or services from another region

Human Development Index

used by UNDP as a way to measure development, goes beyond income. It is based on life expectancy, education and personal income. It gives a higher ranking to societies with a more equal distribution of wealth. -better than just measuring GNP per capita

Women in TNC Manufactoring

women have increasingly been integrated in global produciton through TNcs -women are often perceived as being more compliant and less likely to unionize. -women provide a source of low-cost labor for global capital

Triffin Dilemma

world needed US in dollars to participate in the international economy, as US dollars flood out into teh world the balance between dollars and gold would deteriorate until people lost faith that the US would honor its commitment to gold. Eventually there would be more dollars outside the US than gold inside, and the US would not be able to redeem dollars for gold. in 1960 the US foreign monetary liabilties exceeded US gold reseves. In 1971 US broke link with gold. (Nixon Shock) -currencies were allowed to float, this led to incrased capital mobility and increased acitivy in foreign exchange markets. Profits could now be made by exchanging currencies.