POS 350 | Exam 3

Three Challenges to Building State Autonomy and Capacity in Developing Countries

1. Absence of professional bureaucracy (following departure of foreign imperial bureaucrats). 2. Clientelism, rent seeking, and corruption in the handling of state jobs and revenue. 3. Sovereignty often compromised by external actors (other states, international organizations).

State Institutions and Emphasis on Economic Development

1. Corruption is argued to be a major problem. The central government responds to special interests that benefit them, potentially allowing corrupt practices. Moreover, "temporary" help to firms is never temporary. Once the state has a vested interest in a relationship, it is rarely dismissed. Strengthening the state may limit corruption. 2. Increased urbanization leads to urban unemployment, which threatens stability.

Two Potential Political Implications: Globalization

1. Due to the thickening of connections between people across countries, globalization breaks down the distinction between international relations and domestic politics, making many aspects of domestic politics subject to global forces. 2. Globalization can also work in the other direction, essentially "internationalizing" domestic issues and events (sensitivity).

How may globalization be limited or reversed?

1. Economic crisis could continue to work against globalization, reducing economic ties, migration, or other forms of globalization. 2. Ongoing difficulties and concerns regarding issues such as environment and immigration may increase public opposition to globalization.

Three Arguments for Economic Globalization

1. Economic liberty is increased to the individual as the world market enables consumers to sell to and purchase from whoever they wish. 2. Allowing investors access to world markets ensures their assets will produce the largest net gains. 3. Outsourcing and MNCs give more people chances to work at service jobs previously reserved for first-world citizens.

Four Arguments Against Economic Globalization

1. Enlarging markets increases competition among producers, undermining social contracts between governments and citizens. 2. Competition may lead to countries deregulating, potentially harming labor and environmental regulations. 3. Foreign sources of trade, immigration, and investment may erode cultural (social) distinctiveness. 4. Capital is mobile but labor is not. Therefore, workers cannot bargain as effectively when capital may quickly move out of the country.

Two Challenges to Building a Unified Nation-State

1. Ethnic and religious divisions among different groups in heterogeneous societies (often exacerbated by economic inequality). 2. Arbitrary political boundaries imposed by imperial powers.

Two Arguments: Globalization Weakens Democracy

1. First, violence will not lose its utility in the international system as optimists hope; it will simply change form, much as it did when states themselves first appeared; globalization can empower violent international actors and movements such as terror groups that in many ways are the exact opposite of the modern state. 2. Second, many question how a more globalized political system can be more democratic. Although deeper international connections may increase transparency, this does not necessarily lay out a mechanism that enables individuals to act on available information. Additionally, international organizations may not be directly accountable to anyone. At an extreme, this may lead to global illiberalism.

Three Paths to Economic Growth following Independence

1. Import Substitution (ISI) 2. Export-Oriented Industrialization (EOI) 3. Structural Adjustment

Four Characteristics: Imperialism

1. Is a system in which a state extends its power beyond its borders to control other territories and peoples. 2. Was propagated by European powers from the sixteenth to the twenty-first centuries. 3. Is driven by economic, strategic, and religious motives. 4. Often led to colonialism, the physical occupation of foreign territories.

Two Factors: Social Globalization

1. One factor is demographic—specifically, the increasing mobility of humans, fleeing conflict but also seeking better economic opportunities elsewhere in the world. 2. Technological innovations like the internet and cell phones also expand the capacity of individuals to become interconnected.

Two Scenarios: Changes in State Autonomy and Capacity Due to Globalization

1. One possible scenario is that states will become bound to numerous international institutions that will take on many of the tasks that states normally conduct; with this diffusion of responsibility, sovereignty would decline. 2. Globalization will change not only the utility of force but also the nature of public participation and democracy. The increasing interconnection between domestic and international institutions makes it more difficult for sovereign actors to function without oversight from other organizations.

microcredit

A system in which small loans are channeled to the poor through borrowing groups whose members jointly take responsibility for repayment; often fueled by nonprofit organizations or local associations; has expanded with globalization.

North American Free Trade Agreement (NAFTA)

An agreement between Canada, Mexico, and the United States that liberalizes trade between the three countries. --NAFTA's Negative Effects in Mexico 1. NAFTA doubled the amount of food Mexico imports from the U.S., thereby lowering food prices for consumers but creating a massive crisis for millions of Mexican farmers; Mexico has eliminated millions of jobs in agriculture. 2. NAFTA has exacerbated the gap between the wealthy north and the impoverished south. 3. Increased illegal migration to the U.S. --NAFTA's Positive Effects in Mexico 1. Manufacturing exports to the U.S. have skyrocketed. 2. Greater access to U.S. markets has also been a boon to Mexico's fruit and vegetable producers, who now supply much of the U.S. winter market. 3. Cheaper imports have benefited a wide variety of Mexican producers and consumers.

Bretton Woods system

An economic regime that manages international economic relations; this includes the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO); helped facilitate the Washington Consensus.

colonialism

An imperialist system of physically occupying a foreign territory using military force, businesses, or settlers; often the means of consolidating an empire.

neocolonialism

An indirect form of imperialism in which powerful countries overly influence the economies of less-developed countries; breaking this cycle of dependent development was thus the greatest concern for developing countries following independence, resulting in mercantilist economic policies of import substitution and export-oriented industrialization.

International Monetary Fund (IMF)

An international organization that helps manage exchange rates between countries and provide loans to states with financial difficulty (example of NGO).

empire

Emerged from the power of modern societies that aimed to conquer new lands; a single political authority that has under its sovereignty a large number of external regions or territories and different peoples that are not seen as an integral part of the country.

multinational corporation (MNC)

Firm that produces, distributes, and markets its goods or services in many countries due to economic globalization; they wield assets and profits far larger than the GDPs of most countries in the world and are able to influence politics, economic developments, and social relations through the goods and services they produce and the wealth at their disposal.

neoliberalism/structural-adjustment programs/Washington Consensus

Package of policies that emphasized deregulation; policy of economic liberalization adopted in exchange for support from liberal international organizations such as the World Bank or International Monetary Fund; typically improves privatizing state-run firms, ending subsidies, reducing tariff barriers, shrinking the size of the state, and welcoming foreign investment.

offshore outsourcing

Perhaps the best known example of the intersection among globalized labor and technology; a process by which a firm moves some of its work to a secondary business outside the home country that can do the work more efficiently or cheaply.

Trans-Pacific Partnership (TPP)

Proposed agreement among twelve countries to liberalize trade through reduced tariffs and common regulations; abandoned by the U.S. in 2017.

World Bank

Provides loans and technical assistance to advance development in developing countries (example of NGO).

Social Institutions and Emphasis on Economic Development

Public investment requires political trust and legitimacy. --Social mistrust hinders tax collection, property rights. --People in divided societies may resent contributions (their own in the form of taxes, or public spending on others).

capacity

Refers to a state's ability to fulfill basic policy tasks; difficult for post-imperial countries to achieve; the lack of it stretches back to the absence of professional bureaucracy.

What encourages political engagement and strengthens civil society?

Research suggests that accountability is key: that is, monitoring how political leaders and the state are delivering public goods and disseminating information. --To be effective, local engagement needs to hold individuals and institutions accountable all the way up to the national level, influencing parties and national policy. --Civil society can overwhelm a state if it lacks the capacity to meet public demands.

globalization

Social change stemming from deeper connections across countries; process of expanding and intensifying linkages between states, societies, and economies; challenges long-standing institutions, assumptions, and norms; behind it lies the sense that the battle over freedom and equality is an international one.

Which country illustrates the political economic dilemmas faced by developing countries?

South Africa

Economic and political difficulties that arise from such social divisions make the creation of a single national identity difficult and weaken the notion of _____, the notion that all individuals have a common political relationship to the state.

citizenship

Why have economic-based approaches been largely ineffective?

A failure to focus on political institutions.

microfinance

A much broader spectrum including credit, savings, insurance, and financial transfers.

nongovernmental organization (NGO)

A national or international group, independent of any state, that pursues policy objectives and fosters public participation; political goals are enabled by globalization, allowing such groups to become transnational; can shape domestic and international politics by mobilizing support across the globe.

informal economy/sector

A segment of the economy that is not regulated, protected or taxed by the state; dominated by the self-employed or small enterprises; often associated with weak states that are unable to regulate the economy or prevent corruption.

middle income trap

A situation where countries experience economic growth but are unable to develop at a speed necessary to catch up with developed countries.

newly industrializing countries (NIC)

A state that has made progress towards becoming an advanced industrial country with economic development via industrialization.

less developed countries (LDC)

A state that makes little progress toward economic or other development.

autonomy

A state's ability to act independently of the public and foreign actors; difficult for post-imperial countries to achieve; initial problems with it were exacerbated by the politicization of the state.

imperialism

A system in which a state extends its power to directly control territory, resources, and people beyond its borders.

Two Criticisms: Social Globalization

1. Some contend that globalization overwhelms people with innumerable choices, values, ideas, and information that they are unable to understand, evaluate, or escape—especially people who are not part of the globalized elite. Confusion, alienation, and public backlash (including increased nationalism and fundamentalism) can emerge as people seek to hold on to their identities. 2. Even in the absence of a backlash against globalization, the critics contend, societal globalization will not generate a richer global culture and cosmopolitanism. Rather, it will trigger cultural and intellectual decline; can be thought of as a disenchantment of the world, referred to as the "globalization of nothing."

Markets require well-functioning political institutions, two of which are emphasized.

1. State institutions. 2. Social institutions.

Three Possible Scenarios for the Future of Political Globalization

1. The "golden straightjacket" refers to economic competition between countries and the subsequent convergence of similar economic policy. Asserts that political globalization may bring about a more peaceful world order, constraining states' tendencies toward violent conflict by dispersing sovereignty among numerous actors and diminishing the capacity and autonomy of states. 2. Supranational democracy refers to democracy increasing beyond state borders through the use of IGOs, which become responsive to voters. Thus, democracy transcends states and becomes supranational. 3. Globalization may be limited as states wish to protect sovereignty.

Just as imperialism transformed political and social institutions in colonial areas, creating an amalgam of local and Western forms, economic change occurred in similarly dramatic and uneven ways including the following.

1. The first important change in many imperial possessions was the replacement of a traditional agricultural economy with one driven by the needs of the industrializing capitalist home country. 2. Alongside a cash-based economy came the transformation of economic production. Using a mercantilist political-economic system, empires sought to extract revenue from their colonies while at the same time using these territories and their people as a captive market for finished goods from the home country; free trade did not exist for colonies. 3. Large businesses were established to oversee these so-called extractive economies, which were often dominated by a single monopoly.

Three Facets of Economic Globalization attributed to the Bretton Woods System

1. The globalization of international trade. 2. The integration of capital and financial markets--markets for money--around the globe. 3. Money has become more mobile. Investments and loans can be made from, and to, many more places around the world.

Explanations for Differing Levels of Development Between Developing Countries/Regions

1. The interplay between ethnic divisions and borders; deep ethnic divisions appear to correlate with greater economic and political instability. 2. Natural resources further polarize politics when combined with ethnic divisions, since each group will seek to control those assets at the expense of others. 3. Governance is perhaps the most important. The state must be able to establish sovereignty and develop public goods and property rights while resisting corruption and allowing for the transfer of power between governments over time.

In Focus: Political and Societal Institutions of Imperialism

1. The state, as a form of political organization, was imposed on much of the world outside of Europe. 2. Ethnic and national identities were created where none had existed before colonization. 3. Gender roles from the imperial country were often imposed on colonies.

Three Characteristics: Economic Institutions of Imperialism

1. Traditional agricultural economies were transformed to suit the needs of the imperialist power. 2. Economic organization under imperialism impeded domestic development in the colonies. Economic development was encouraged but in a form that would serve the markets of the home country. 3. Free trade was often suppressed, as colonies were forced to supply goods only to the imperial country, creating extractive economies in the colonies.

structural adjustment

Based on liberalism. Identifies the problem with development as the state itself. State involvement and regulation is reduced as the economy is opened up to promote market forces. Thus, it relies on market discipline to promote economic development. Foreign investment is encouraged. Often follows import substitution. Criticized as a tool of neocolonialism. --Widespread use of this model occurred after the 1980s due to the failure of ISI and success of EOI in some areas. --These adjustments became a condition for aid and loans in poorer countries, compelling policy in developing countries. As a result, it was often viewed as neoliberalism. --The model has had mixed success. In some cases, it impeded social development. It also had political effects as it tended to destabilize newly democratized governments. Moreover, it conflated democracy with neoliberalism, resulting in a drop in democratic support.

export-oriented industrialization (EOI)

Based on mercantilism. State plays a strong role in the economy. Tariff barriers are used to protect domestic industries. Economic production is focused on industries that have a niche in the international market. Seeks to integrate directly into the global economy. Has generally led to a higher level of economic development than import substitution. --Emphasizes investing in firms that will export manufactured goods; requires a great deal of capital, resulting in governments promoting domestic savings that are then funneled to export firms. --Widespread use of EOI is observed in East Asia; promoted the East Asian Tigers. --Generally effective with some drawbacks. It requires capital controls and is dependent on access to foreign markets, which may exacerbate dependency between countries. May lead to corruption as tight relationships between governments and business form.

import substitution industrialization (ISI)

Based on mercantilism. State plays a strong role in the economy. Tariffs or nontariff barriers are used to restrict imports. State actively promotes domestic production, sometimes creating state-owned businesses in developing industries. Criticized for creating "hothouse economies," with large industries reliant on the state for support and unable to compete in the international market. --Aimed to reduce imports, develop local production, and reduce dependency on post-colonial economic relationships. The primary goal is to reduce purchase of foreign goods and develop domestic manufacturing. --Local firms were initially unable to compete with imports, centering attention on the domestic economy. As a result, the economy is dependent on primary commodities. --In practice, it is generally ineffective.

social globalization

Civil society expands to include networks with international links, and we learn about ideas from others we recognize as fundamentally similar to us; conduit for spreading ideas. Globalization may weaken traditional societal institutions, possibly creating new identities that do not belong to any one community or nation. --Relevant identities transcend borders. Through the identification of individuals across regions, civil protections may be increased, transcending the state. --A resurgence in nationalism has occurred due to social globalization. People respond to globalization by promoting distinct national identities.

dependent development process

Colonies were governed to supply resources to the empire. They were intentionally designed not to be self-sufficient. --All trade was funneled through the empire, resulting in little economic development and poor industrialization. --Specifically hindered the development of peripheral economies after imperialism and decolonization.

developing countries

Comprise both lower and middle income countries.

lower income countries

Countries that lack significant economic development, political institutionalization, or both; also known as less-developed countries (LDCs); GDP at PPP below $4,000.

intergovernmental organization (IGO)

Group created by governments to serve certain policy ends; includes the U.N., WTO, E.U., and Organization of American States.

globalized democracy

Growing international connections at the societal level would generate not only a form of cosmopolitanism but also a civic identity that stretches beyond traditional barriers and borders; this global civil society could in turn shape politics by creating new opportunities for concerted public action and new ways of thinking about politics and participation at the domestic and international levels.

What is the result of weak capacity and autonomy?

High levels of corruption.

middle income countries

Historically less-developed countries that have experienced significant economic growth and democratization; also known as newly industrializing countries (NICs); GDP at PPP between $4,000 and $13,000.

Is globalization inevitable?

History suggests that globalization is not unstoppable; deglobalization can occur as well, as it has in the past.

Is globalization new?

No. Globalization occurred before WWI in the form of imperialism, trade, and colonialism. After WWI, globalization was reversed except for military globalization. However, a new form of globalization is taking place.

independence movements

Occurred in many colonies, ending imperialism and colonialism in the mid-20th century. Government claims to legitimacy often rested on successful independence.

World Trade Organization (WTO)

Oversees trade agreements between the member states to lower tariffs and remove other nontariff barriers.

Three Views: IGOs and an Increased Democratic Deficit

The democratic deficit argues that globalization takes power from citizens. 1. IGOs make critical decisions on many issues, but they are not accountable to voters. They do not provide a democratic mechanism, therefore, globalization reduces democratization globally. 2. IGOs are accountable to governments who are accountable to governments. Therefore, citizens indeed have power. 3. Governments use IGOs to avoid accountability, blaming unpopular policies on outside pressure.

international regime

The fundamental rules and norms that link states together and shape their relationships to one another, usually regarding some specific issues (such as greenhouse gases or trade).

economic globalization

The increasing integration and interdependence of national economies around the world as a global market emerges.

global cosmopolitanism

The interconnection of domestic institutions at the global level will create new values, identities, and culture—a process of "creative destruction" or "hybridity" that will enrich all cultures; may result in _____, a worldly political order that draws its values and identity from everywhere.

foreign direct investment (FDI)

The purchase of assets in a country by a foreign firm; has grown rapidly due to globalization.

political globalization

The spread and deepening of shared political ideologies and values. Institutions and political identity shift to the international or transnational level.

residual category

The traditional labeling of countries as belonging to a "Third World" unhelpfully grouped together a diverse range of people and political systems according to what they were not, rather than what they were—what we call a _____.

T/F: Societal globalization is increasing

True. --Individuals have increasingly seen themselves as world citizens.

Economic integration was a post-WWII ____-led project, which has used the Bretton Woods system since 1945 to promote global market integration.

United States

Brexit: what it is, how it went, where it's leading, what it represents, and where we stand.

What it is: Brexit, or British exit, refers to the United Kingdom (England, Scotland, Wales, and Northern Ireland) potentially leaving the European Union. How it went: Leave won by 52% to 48% in a 2016 referendum. Where it is leading: The British people have changed their mind, though the Conservative party has become more committed to Brexit. What it represents: Voters felt English identity and values were being washed away by subordination to the bureaucrats of Brussels, promoting nationalism. Where we stand: Brexit has been delayed to January 31st as Johnson's revised deal has yet to be voted on in parliament.

Did globalization cause the recent economic recession?

While economic recession is not itself a function of globalization, the globalization of finance created a much riskier world economy. --As the housing bubble in the United States began to deflate, it affected not only American but also European banks that had invested in this area. --As American and European banks began to wobble, investors began to withdraw from stock markets around the world.

Is globalization exaggerated?

Yes. The assumption is that globalization means the eclipse of the state, yet there is still not a great deal of evidence showing that either scenario is taking place.

Globalization is associated with the institutional change, specifically the growing power of _____.

a host of non-state or supra-state institutions. Most can be grouped as MNCs, NGOs, or IGOs.

Globalization can affect the _____ and _____ of states through IGOs.

autonomy (independence from social pressure); capacity (ability to implement policy) --By enlisting help for domestic issues, states increase domestic capacity with the aid of IGOs. --Autonomy may be reduced if states are constrained by IGOs (ex.: help from the IMF has conditions attached that reduced autonomy).

Upon gaining independence many of these countries found themselves in a continued state of _____ on their former empire.

economic dependency

Group divisions often have_____, just as they did under colonial rule.

economic implications --Some ethnic or religious groups favored under colonialism continue to monopolize wealth in the post-independence society.

Imperial elites, themselves shaped and defined by national and ethnic identities, took great interest in identifying and classifying different _____ in the regions they came to occupy and structuring their political and economic control around these classifications. Suddenly, people who had not specially defined themselves by _____ found their basic rights being tied to how they were ethnically defined by the empire, resulting in inequality.

ethnic groups

The imposition of organizational forms from outside included various new identities that often displaced or were incorporated into existing social institutions. Among these were _____ and _____ identities.

ethnic; national

In countries where populations are heterogeneous, the battle for political power often falls along _____ or _____ lines as each group seeks to gain control over the state in order to serve its own particular ends.

ethnic; religious --This struggle is central to clientelism and patrimonialism, as each group competes to gain access to resources controlled by the state. --Where ethnic or religious divisions are strong we often see a form of patrimonialism in which one group dominates the state while effectively freezing other groups out of the political process.

Another commonly noted example of financial globalization is through _____.

financing; around one-third of the United States' $19 trillion in state debt is held internationally, with the biggest owners being China and Japan.

Constraints on state capacity and autonomy have clear implications for _____ and _____.

freedom; equality --A state with weak capacity and autonomy is unlikely to be able to establish the rule of law. --Freedom is threatened by conflict and unpredictability, which in turn hinders economic development.

Globalization and globalized institutions complicate the ability of states to ______.

maintain sovereignty

Developing countries are subject to pressure from _____ and _____. Frequently wielding much greater economic and political power than the states themselves, these actors can significantly influence the policies of these countries.

more powerful states; international actors (UN, World Bank, multinational corporations, nongovernmental organizations)

Economic globalization empowers ____ and creates power asymmetries.

multi-national corporations

_____ grew to be a powerful force in the industrializing world; helped drive competition between the industrial powers, in turn advancing the imperialist cause.

national identity

Political globalization can affect _____, the principle that national governments have final say over their jurisdictions.

sovereignty --International agreements may create laws that override national governments, challenging sovereignty.

Technology is not inherently globalizing or globalized, though in many cases technology and globalization can reinforce each other. In the last 40 years, one of the most important examples of such reinforcement has been the development of _____.

the internet

Where instability is so high often only one institution has a great deal of capacity and autonomy, _____.

the military --Military rule has been common in developing countries.

For developing countries that already have a reasonable degree of capacity and autonomy, improving governance may benefit from an emphasis on _____.

the rule of law --Requires judicial reform, including stronger constitutional courts, police, and civil service reform with tougher measures against corruption. --The goal is a state that is more predictable and fairer in how it treats its citizens. --It is not that institutional reforms will create norms regarding the rule of law; rather, norms must first emerge to generate pressure for institutional change.

Tribal and local institutions were replaced with European-style states to divide and conquer citizens based on ethnicity. New national borders did not follow existing cultural or political borders. Such divisions reduced the legitimacy of existing states. These consequences of imperialism led to post-colonial states that were often _____ and lacked _____.

weak; legitimacy