POLS 360 Exam 3 Study Guide Lectures from October 21 December 2 Intro to Development Bretton Woods and Development Growths vs convergence Focus on Europe Japan not third world Marshall Plan 1947 Decolonization Bring newly independent states into democracy capitalist hold IMF membership is a pre req for WB membership communism Cold War was capitalist democratic not communist Types of World Bank Loans Hard loans near conventional interest rates grace period of 3 5 years maturity period of 15 20 years Soft loans interest free 10 year grace period 35 40 year maturity period Soft loans are only for poorest of the poor Are loans solutions to development heavy indebtedness Washington Consensus get states out of debt austery programs cutting gov spending trade liberalization structural adjustment policies Millennium Dev Project Goals Improve social and econ conditions for the poorest countries get on the ladder to dev by focusing on basic human development Jeffrey Sachs What do people need to be stable enough to focus on econ development Stress on the importance of global responsibility to poor Goal to meet goals 2015 MDGs Eradicate extreme poverty and hunger people who live on less than 1 a day Achieve universal primary education Eliminate gender disparities in secondary and higher education Reduce child mortality Reduce maternal mortality Halt and reverse HIV AIDS universal access to treatment same with malaria Integrate principals of sustainable development promote biodiversity increase clean water availability Develop global partnership for development Issues with Aid There can always be more Where is it going Center vs periphery cleavage IMF and WB focus on promoting successful states States should be rewarded for good governance Focus money to where it matters Poverty reduction Strategies Countries write PRS in order to illustrate to donors that they have a game plan Donors don t provide enough money Practical linkage needed Focus on Donor Plan Magnitude timing predictability harmonization importance of predictability Coordinate and harmonize Issues with foreign aid White Man s Burden William Easterly talks about it Poem by Rudyard Kipling What is the burden West has given Africa 2 3 trillion in aid over last 50 years Easterly s stress on paternalistic approaches to development Planners vs Searchers Planners stick to present top down plan Sachs Searchers want change and innovation when it comes to development Easterly s Faux Myths of Dev 1 poor states do not stay poor they grow 2 when poor countries do not grow it is because of bad gov 3 foreign aid doesn t give big push for growth Bad vs Good Govs What is social capital Connections between social networks and indivs It s what makes people care about their community and state Social Capital Robert Putnam social capital will facilitate cooperation and mutually supportive relations in states and would therefore be a valuable means of combating many of social disorders inherent in modern societies People respond to incentive not aid Poverty Trap Any self reinforcing mechanism which causes poverty to persist Institutional Facets of Poverty Women more at risk of being impoverished trad Roles societal roles public private life reprod Roles NAFTA Past Present and Future Where did it come from 1994 Failure of import substitution industrialization Push to liberalize trade and investment Mexico joins GATT in 1986 pursued trade agreement with U S Foreign direct investment Perot talked about outsourcing one way trade agreements labor costs benefits environmental controls giant sucking sound consumers employees vs corporations U S Myths on NAFTA American Dream American Exceptionalism Leadership populism How did Mexico benefit from NAFTA stability to econ policies and stable currency political stability to the 1994 crisis Mexico Agric Failures because of ISI Green Rev Corn farmers High fructose corn syrup Migration to cities for higher paying jobs U S Hegemony U S as first among equals Canada then Mexico winning Cold War isolating Mex and Canada China Goes Global 1971 opening to U S 1989 Tiananmen Square 1998 2008 going global China as an international actor not a diplomatic power What does it take to be a hegemon Charles Kindleberger says 1 Be a leader 2 Willingness to lead China Global Governance and Trade What is global governance anarchy collective management of common problems at the international level Shambaugh Elinor Ostrum Tragedy of the Commons avail resources no clear ownership Privatization property on taxes 1949 70s China outside systemic challenger 80s 90s studying system passive 90s today systemic exploitation active Finance in China 2008 basket currency made up currency composed of diff currencies 5 perm members State sovereignty Equal representation China and the environment UN Energy needs import from Middle East and Africa 2008 Financial Crisis Subprime lending artificial bubble Systemic risk vs moral hazard Systemic has domino effect of collapse of businesses Moral has risky business