POLS 360Exam #3 Study Guide: Lectures from October 21-December 2Intro to DevelopmentBretton 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 communistTypes 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 policiesMillennium 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? 2015MDGs- 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 developmentIssues 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 mattersPoverty 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 neededFocus on Donor Plan- Magnitude, timing predictability, harmonization, importance of predictability,- Coordinate and harmonize- Issues with foreign aidWhite 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 developmentPlanners vs. Searchers- Planners stick to present “top-down” plan (Sachs)- Searchers want change and innovation when it comes to developmentEasterly’s Faux Myths of Dev1. poor states do not stay poor – they grow2. when poor countries do not grow, it is because of bad gov3. foreign aid doesn’t give big push for growthBad vs. Good Govs- What is social capital?- Connections between social networks and indivs- It’s what makes people care about their community and stateSocial 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 aidPoverty Trap- Any self-reinforcing mechanism which causes poverty to persistInstitutional Facets of Poverty- Women more at risk of being impoverished- - trad. Roles- - societal roles- - public/private life- - reprod. RolesNAFTA: 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 investmentPerot talked about: outsourcing, one way trade agreements, labor costs/benefits/environmentalcontrols, “giant sucking sound”, consumers/employees vs. corporationsU.S. Myths on NAFTA- American Dream- American Exceptionalism/Leadership- populismHow did Mexico benefit from NAFTA? – stability to econ policies and stable currency, political stability to the 1994 crisisMexico Agric- Failures because of ISI/Green Rev- Corn farmers- High fructose corn syrup- Migration to cities for higher paying jobsU.S. Hegemony- U.S. as first among equals, Canada, then Mexico- winning Cold War- isolating Mex and CanadaChina 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 leadChina, 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/activeFinance in China- 2008 – basket currency = made up currency composed of diff currenciesUN- 5 perm members- State sovereignty- Equal representation- China and the environmentEnergy needs – import from Middle East and Africa2008 Financial Crisis- Subprime lending – artificial bubble- Systemic risk vs. moral hazard- Systemic has domino effect of collapse of businesses- Moral has risky
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