PSC 124: FINAL EXAM
229 Cards in this Set
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Principles of the UN Charter
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The UN charter is based on principles that:
• States are equal under international law
• States have full sovereignty over their affairs
• States should carry out their international obligations
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UN General Assembly
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Where representatives of all states sit together in a huge room, listen to speeches, and pass resolutions. The General Assembly coordinates a variety of development programs and other autonomous agencies through the economic and social council (ECOSOC).
General Assembly is made up of all…
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UN Security Council
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The Security Council is responsible for maintaining international peace and security and for restoring peace when it breaks down.
5 permanent members: United States, Britain, France, Russia, China
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UN Secretariat
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• The administration of the UN takes place through the UN Secretariat (executive branch), led by the secretary-general of the UN. It carries out the day-to-day work of the UN. It services the other principal organs of the UN and administers the programs/policies laid down by them.
• The …
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Collective security
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The banding together of the world's top states to stop an aggressor.
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Peacekeeping forces
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The function of peacekeeping is carried out by lightly armed soldiers. They can interpose themselves in fighting or help in negotiations.
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UNHCR
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The Office of the UN High Commission for Refugees (UNHCR) coordinates efforts to protect, assist, and eventually repatriate the many refugees who flee across international borders each year to escape war and political violence.
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UNDP
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The UN Development Program (UNDP), funded by voluntary contributions, coordinates all UN
efforts related to development in poor countries.
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Autonomous agencies
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• International Atomic Energy Agency (IAEA) mainly works to prevent nuclear proliferation.
• World Health Organization (WHO) provides technical assistance to improve condition and
conduct major immunization campaigns in poor countries.
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Sources of international law (four)
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1. Treaties: States sign binding treating
2. Principles of international law: Example - Sovereignty
3. Custom: No specific binding written law, but a generally accepted way of actions
4. Scholarly opinion: Judges or experts who give ideas or opinions. Secondary force of international
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Sanctions
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Agreements among other states to stop trading with the violator, or to stop some particular commodity
trade as punishment for its violation
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The World Court
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• Branch of the UN where only states can be sued. The World Court is a panel of 15 judges elected for nine-year terms. This was formally called the International Court of Justice (ICJ).
• Countries themselves bring cases to the World Court.
• The optional clause states have to agree to …
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Diplomatic recognition
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The status of embassies and of an ambassador as an official state representative is explicitly defined in
the process of diplomatic recognition.
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Just-war doctrine, jus ad bellum, jus in bello, jus post bellum
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• Jus ad bellum: Rules that bind states to wars. What conditions states can wage war: to protect themselves, if their sovereignty is violated, if territory is occupied by foreign powers
• Jus in bellum: Rules within war. Example - cannot kill women, children and the elderly
• Jus post b…
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Universal Declaration of Human Rights
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The UDHR is what the UN General Assembly adopted to what is considered the core international document concerning human rights. UDHR sets forth international norms regarding behavior by governments toward their citizens and foreigners alike. The principle that violations of human rights u…
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Responsibility to protect
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Countries must protect their people's basic rights. If not, the international system can step it. People
are citizens of the world and must be protected
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War crimes and crimes against humanity
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War crimes are serious violations of large-scale abuses of human rights that occur during wars. Crimes against humanity are conceived as inhumane acts and persecutions against civilians on a vast scale in the pursuit of unjust ends.
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International Criminal Court (ICC)
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Individuals are brought - especially war criminals.
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Mercantilism
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An economic theory and a political ideology opposed to free trade. It shares with realist the belief that each state must protect its own interests without seeking mutual gains through international organizations
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Liberalism
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An approach that generally shares the assumption of anarchy but does not see this condition as preventing extensive cooperation to realize common gains from economic exchanges. It emphasizes absolute over relative gains and in practice, a commitment to free trade, free capital flows, and …
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Balance of trade
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State's exports versus imports
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Comparative advantage
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The principle that says states should specialize in trading goods that they produce with the greatest
relative efficiency and at its lowest relative cost (compared to other states)
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Monopoly
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Only one supplier of an item
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Sanctions
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Threatening a penalty for disobeying a law or rule - often economic or political
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Autarky
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Self-reliance; self-sufficiency
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Protectionism
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An attempt to strengthen domestically and shield from world/foreign markets
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Predatory practices
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Business models that pointedly undermine others for gain
Ex. Dumping: Placing goods in a market well below market value at a rate that is unable to make a profit creating unfair competition for competitors. Often results in tariffs to make the price rise to a fairer rate.
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Tariffs
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A duty/tax imposed on certain goods as they enter an area. Generates a large stream of revenue.
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Non-tariff barriers
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Other ways of discouraging imports besides monetary tariffs.
Examples: Quotas, subsidies, tax breaks, government loans, government guaranteed buying
prices
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GATT (1947)
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General Agreements on Tariffs and Trade: Worked for freer trade on a multilateral level. Worked as a negotiating framework more than an administration institution. Did not regulate trade. Helped arbitrate and clarify. Later became the WTO.
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WTO (1995)
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World Trade Organization: Expanded on the GATT - monitored and enforced rules of trade;
administered more. Rests on reciprocity. Has some powers of enforcement and bureaucracy.
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MFN status
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Most-favored nation: Trading rules and restrictions placed on a WTO member's favorite trading
partner must be applied to all WTO trading members.
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Generalized System of Preferences (GSP)
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Rich states give trade concessions to poor ones to help their economic development.
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Uruguay Round
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A series of negotiations under the GATT to create the WTO in 1994
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Doha Round
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A series of negotiations under the WTO (in Doha, Qatar) in 2001 focusing on agricultural subsidies,
intellectual property and other issues.
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Free-trade areas
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A zone in which there are no tariffs or other restrictions on the movement of goods and services across borders.
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NAFTA
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North American Free Trade Agreement: A free trade zone encompassing the United States, Canada and Mexico in 1994
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FTAA
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Free Trade Area of the Americas - A wish to create a single free trade area in the Western Hemisphere from Alaska to Argentina.
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Cartel
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An association of producers and/or consumers (but typically producers) of a certain product who form to manipulate its price on the market.
Ex. OPEC: Organization of Petroleum Exporting Countries: The most prominent cartel in the international community. Its members control hundreds of m…
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Intellectual property
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Rights of creators of books, films, computer software and such
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WIPO
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World Intellectual Property Organization: Tries to regulate patent and copyright laws across borders.
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Free trade
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International trade left to its natural course without tariffs, quotas, or other restrictions.
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Centrally planned (or command) economy
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Political commodities (government) set prices and quotas for production and demand (consumption).
Trade is controlled/planned by the government.
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Mixed economies
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Containing both private AND government owned industries
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From Lecture: Race to the bottom
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Nations competing for cheap labor/goods production will often undercut one another, simple to get the business. This gives companies all of the power to demand lower and lower prices because nations are so desperate for the jobs. They are racing to provide the lowest cost.
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Gold standard
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Value of money is pegged to the value of gold and other precious metals.
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Convertible currencies
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Money from one state that can be traded (converted) into other types of money from other places
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Hyperinflation
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Extremely high, uncontrollable inflation. More than 50% per month, or 13,000% per year
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Fixed exchange rates
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Governments decide (individually or jointly) to establish official exchange rates on currency. (Used to be the case for the US and Canada)
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Floating exchange rates
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Most common for the world's leading currencies. Rates are determined by global currency markets in which private investors and governments alike buy and sell currencies. Sometimes currencies can be bought and sold like stocks: if you believe the Japanese yen will soon increase in price, i…
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Managed float system
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A system of occasional multinational government interventions in currency markets in otherwise free
floating currency rates
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Central bank
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An institution common in industrializes countries tasked mainly with controlling inflation and maintaining the current value of currency in a state.
The Fed: The central bank of the US - formally called the Federal Reserve. The "reserve" is the government's stockpiling of hard currency. …
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Discount rate
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The interest rate at which the government charges when it loans money to private sources
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Bretton Woods system
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Established in Bretton Woods, NH - created the World Bank
Created the gold Standard, the World Bank, and the IMF.
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World Bank
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Created as part of the Bretton Woods System. A source of loans to reconstruct Western European economies post-WWII and help states through financial difficulties.
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International Monetary Fund (IMF)
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Coordinates the international currency exchange rate, the balance of international payments, and national accounts. Closely associated with the World Bank.
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Balance of payments
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Is like the financial statements of a company: it summarizes the flow of money in and out of the state. Technical, not political, in nature.
3 TRANSACTIONS IN BOP:
1. Current Account: The current balance of trade for a state.
2. Capital Flows: Foreign investments in and by a country. M…
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Remittances
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Money sent home by migrant workers to individuals to their country of origin
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Standing wealth
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Most standing wealth is in the form of homes and cars, farms and factories, and ports and railroads. This also includes hard-currency reserves and capital goods (like factories and goods).
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Fiscal policy
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Government decisions on taxation and spending
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Monetary policy
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Decisions on printing and circulating money
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1997 Asian financial crisis
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Began when currency spectators began selling off the currencies of Southeast Asian countries, thus devaluing currencies in Thailand, the Philippines, Malaysia and Indonesia. This led to stock market crashes in some of these countries and resulted in other foreign investors (such as Brazil…
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MNCs (definition and three types of MNCs)
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Multinational Corporations: Global companies based in one country with branches in other countries. Most important are industrial (factories and such) and financial corporations.
Example: McDonald's, Exxon Mobile
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Emerging markets
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Developing countries experiencing rapid growth and industrialization, with some characteristics of a
developed market.
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Foreign direct investment
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Acquisition by residents of one country of control over a new/existing business of another country. Investing in tangible goods, such as factories and office buildings.
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International integration
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The process by which supranational institutions come to replace national ones; the gradual shifting upward of some sovereignty from the state to regional or global structures. The ultimate expression of this is the merging of several states into one. This challenges realism. Collectivism.…
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Functionalism
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Growth of specialized technical organizations that cross national borders. States have common needs and functions - this draws them together. This results in further integration as time goes on. Ie. Coordinating mail systems across borders or how to deal with a river that crosses borders.…
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Neofunctionalism
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Starts in the economic area, then spreads further past economic issues. Economic integrations develop a political dynamic that furthers integration.
Three mechanisms: 1. Positive spilover from one economic sector to another 2. Transfer of domestic
allegiances 3. Technocratic automaticit…
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Security community
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A situation in which low expectations of interstate violence permits a high degree of political
cooperation - for example, NATO
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European Union
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Created after WWII for integration -- economic security
Stemmed out of the ECSC and EEC, eventually named the EU in 1992 after the Maasctricht Treaty.
Now has three pillars: 1 - Monetary Union, 2 - Security Union, 3 - Judicial Cooperation (Human
rights)
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The Schuman Plan
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The Schuman Plan (1950) merged French and German steel (iron) and coal industries into a single framework.
This then gave birth to the European Coal and Steel Community (ECSC) in 1952 where France and Germany were joined by Italy, Belgium, Luxembourg and the Netherlands to reduce trade b…
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Treaty of Rome
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France, Germany, Italy, Netherlands, Luxembourg, Belgium create Euratom and the EEC to aid integration.
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Free trade area
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Lifting tariffs and restrictions on moving goods across EU borders.
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Customs union
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Participating states adopt a unifying set of tariffs with regards to good coming from outside of a free trade area. This prevents any particular state from offering lower rates to undercut the market and get more goods.
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Common market
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Allowing labor and capital to move freely across borders (not just goods).
Ie. A Belgian investor can invest equally as much as a German investor, even in Germany.
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Economic and monetary union
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Economic policies are coordinated for best efficiency and stability.
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European Commission
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At EU headquarters in Brussels, Belgium. Represent EU interests. Commissioner's role is to identify
problems and propose solutions to the Council of Ministers
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Council of Ministers
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Main decision-making body. Ministers of each member state meet to enact legislation and reconcile
national interests.
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European Parliament
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700 elected members. Operates as a watchdog for the European Commission. Pass budgets and decide
on legislation but cannot propose/initiate laws.
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European Court of Justice
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Fights legal issues and disputes related to EU law. Can overrule national law with EU law
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The Single European Act
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Set the target date of 1992 for the creation of a true common market in the EC (now EU). Resulted in
deeper integration (politically)
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Maastricht Treaty
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1992 - Made the EU a Monetary Union and changed the name from the European Community. Created sovereignty tensions as states feared they'd lose individuality.
Three pillars of the EU were established.
1. Monetary Union (and eventual common currency - Euro)
a. European Central Bank crea…
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Digital divide
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The gap in access to technology in the rich North compared to the poor South
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Transparency
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Being open and honest to keep people informed. Not hiding any information from others. Helps fight
corruption.
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Cultural imperialism
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A term critical of US dominance of the emerging global culture -- primarily white European culture.
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Tragedy of the commons
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A collective goods dilemma that is created when common environmental assets are depleted or degraded through the failure of states to cooperate effectively, one solution is to enclose the commons, international regimes an also be a solution
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Enclosure
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Splitting the commons into individually owned pieces
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Sustainable development
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Economic growth that does not deplete resources and destroy ecosystems so quickly that the basis of their economic growth is itself undermined
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1992 Earth Summit
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Established the Commission on Sustainable Development which monitors states' compliance with the promises they made at the Earth Summit and hears evidence from environmental NGO's such as Greenpeace
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UNEP
(UN Environment Program)
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Main function is to monitor environmental conditions and works with the World Meteorological Organization to measure changes in global climate
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IPCC -
(Intergovernmental Panel on Climate Change)
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1989 UN-sponsored organization serves for negotiating forum climate change
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Fossil fuels
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Oil, coal, and natural gases
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Greenhouse gases
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CO2 and other gases that when concentrated in the atmosphere, act like the glass in a greenhouse,
holding energy in and leading to global warming
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1992 Framework Convention on Climate Change
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Adopted at the 1992 Earth Summit that set a nonbinding goal to limit greenhouse emissions to 1990
levels by the year 2000
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Kyoto Protocol
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The main international treaty on global warming, which entered into effect in 2004 and mandates cuts in carbon emission in 2008-2012, almost all of the worlds major countries except the US are participants
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Ozone layer
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The part of the atmosphere that screens out harmful ultraviolet rays from the sun, certain chemicals
used in industrial economies break the ozone layer down
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Montreal Protocol
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An agreement on protection of the ozone in layer in which states pledged to reduce and then eliminate
the use of CFCs, it is the most successful environmental treaty to date
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Biodiversity
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The tremendous diversity of plant an animal species making up the earths ecosystems
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UNCLOS
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A world treaty (1982) governing use of the oceans, established rules on territorial waters and a 200
mile exclusive economic zone
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EEZ
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Places a substantial share of the economically profitable ocean resources in the control of states
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Debt-for-nature swaps
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A debt is canceled in exchange for the states agreement to preserve forests
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Acid rain
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Rain caused by air pollution that damages trees and often crosses borders, limiting acid rain has been
the subject of several regional agreements
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Chernobyl
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A city in Ukraine that was the site of a 1986 meltdown at a Soviet nuclear power plant
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1973 oil shock
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Had a profound effect on the word economy, oil producing states decided to punish the US for supporting Israel
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Caspian Sea
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Could be defined under international law as either a lake or sea
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Malthusians
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Officials who warn against world overpopulation
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Developing countries, LDCs
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Worlds poorest regions
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Millennium Development Goals
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Sets targets for basic needs measures to be achieved by 2015 and measured against 1990 data
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UNICEF health care methods
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Education
Provide safe drinking water and food
AIDS medicines
Breast feeding
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Malnutrition
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Lack of needed foods including protein and vitamins
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Undernourishment
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Lack of calories
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Subsistence farming
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Rural communities have grown their own food
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Cash Crops
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Agricultural goods produced for export to world markets
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Urbanization
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More and more people move from the countryside to the city
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Land reform
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Policies to breakup large land holdings and redistribute them to poorer peasants
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Migration
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Moving from a poorer country to a wealthier one
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Migrants
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One who voluntarily moves
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Refugees
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People fleeing to find refuge from war, natural disaster or political prosecution
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Trafficking
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People who are trafficked across borders against their will to preform certain tasks such as labor, domestic servitude or prostitution
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Capital accumulation and economic
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The creation of standing wealth such as buildings, roads etc.
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World system theory
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A view of the world in terms of regional class divisions with industrialized countries as the core, poorest countries as the periphery and other areas as the semi-periphery
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Core
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Industrialized, first world nations
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Periphery
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The poorest countries, third world states
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Semi periphery
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Nations that are not industrialized but not poor
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Imperialism
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The acquisition of colonies by conquest or otherwise
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Colonialism
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Territories taken by large states
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Decolonization
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When previous colonies declare independence from the mother state
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Postcolonial dependence
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Explains lac of accumulation of wealth in the third world, capital cannot sustain itself internally, a state must borrow money to produce goods
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Neocolonialism
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The continuation in a former colony and colonial exploitation without the formed political control
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Enclave economy
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Foreign capital is invested in third world countries to extract a particular raw material in a particular place.
Ex. Exxon Mobil oil production in Aceh, Indonesia
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Newly industrializing countries (NICs)
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Semi-periphery states that export light manufactured goods - particularly China and India; handful of
poor states that achieved self-sustaining capital accumulation with impressive economic growth
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Four tigers (also known as the Asian Tigers)
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South Korea, Taiwan, Hong Kong and Singapore have developed particular industries that are
competitive on world markets
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Import substitution
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The development of local industries to produce items that a country had been importing
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Export-led growth
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Strategy used by NICs; seeks to develop industries that can compete in specific niches in the world economy; may receive special treatment such as subsidies and protected access to local markets; exports from these industries generate hard currency and create a favorable trade balance
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Free economic zones (China)
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Deng Xiaoping instituted economic reforms and transformed its southern coastal provinces into these
which are open to foreign investment and run on capitalist principles
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Nigeria and the "resource curse"
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Second largest economy in Africa; classified as emerging market; significant oil reserves and other resources; resource curse with oil (bases economic growth on those exports)
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Concentration of capital
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Cycle of capital accumulation; you have a lot of money, invest it in industry, which then produces money, and you use that money to reinvest; stays in the RICH countries (rich get richer, poor get poorer)
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Microcredit
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Uses small loans to poor people, especially women, to support economic self-sufficiency
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Mohammed Yunus
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Founder of the Grameen Bank
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Grameen Bank
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Successful model of microcredit in Bangladesh, which won the 2006 Nobel Peace Prize and now
operates more than 2,100 branch offices
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Corruption
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Unjust practices by the gov; important negative factor in economic development in many states;
centers on the government as the central actor in economic development
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Transparency
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Solves collective goods problems because it stems corruption and reveals what goes on
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Technology transfer
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Third world states' acquisition of technology (knowledge, skills, methods, designs, specialized equipment, etc.) from foreign sources, usually in conjunction with direct foreign investment or similar business operations
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Brain drain
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Poor countries' loss of skilled workers to rich countries; ex: smartest people from India leave and go to U.S. and stay gone & don't bring back the value that they have gained
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Debt service
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Constant drain on whatever surplus is generated by investment of the money
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Default
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Failure to make scheduled payments
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Debt renegotiation
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A reworking of the terms on which a loan will be repaid; frequently negotiated by third world debtor
governments in order to avoid default
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Debt forgiveness
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The slowing or stopping of debt growth, owed by individuals, corporations, or nations; happened with
U.S. loans to Egypt after the Gulf War
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IMF conditionality
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Agreement to loan IMF funds on the condition that certain government policies are adopted
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Structural adjustment programs (SAPs) (and the controversy over conditionality)
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Implementations of conditions (an agreement to loan IMF funds on the condition that certain gov policies are adopted) by IMF; controversial b/c of the pain inflicted on the citizens (unemployment, eliminates subsidies of food and basic goods) by such an agreement
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Foreign assistance
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Money or other aid made available to help states speed up economic development or simply meet
basic humanitarian needs
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Bilateral
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State-to-state aid
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Multilateral aid
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Aid through UN or other agencies
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USAID
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The US government organization responsible for most non-military foreign aid; works mainly through
the U.S. embassy in each recipient country; major recipients include Israel, Egypt, and Turkey
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UN Development Program (UNDP)
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Overall flow of foreign assistance through the UN is coordinated by this; manages 5,000 projects at once around the world (focusing especially on technical development assistance); coordinates millennium development goals
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Lecture: South Korea's OPEN system
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System to fight governmental corruption; online system that took requests, if it goes a month without a solution then someone is waiting to get bribed
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Green revolution
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Agricultural revolution that increased production through improved seeds, fertilizers, and irrigation;
helped to support rising Asian populations.
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Balinese water priests
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An example of when the green revolution doesn't work, and when traditional methods are better at producing a crop
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What benefits do states get from the UN? How does UN spending compare to global military spending?
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States get several benefits. The UN tries to safeguard international stability, allowing states to gain from trade and other types of exchange. The UN is a symbol of international order and even of global identity. It is a forum where states can discuss disputes and make settlements, and …
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When and why was the UN founded? How were the world powers induced to join the UN at the outset, given that it involves a certain amount of diminishment of sovereignty?
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a. Founded in 1945 as the successor to the League of Nations following the end of WWII.
51 countries banded together to increase international order/cooperation in the hopes of preventing another World War.
b. At the beginning of the UN states joined in order to rival the great power of…
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How did the character of the General Assembly change in the 1950s and 1960s? What hampered its functioning in the Cold War? After the Cold War how did the role of the UN change?
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a. The General Assembly: Where representatives from all states sit together in a large room, listen to speeches and pass resolutions.
b. During the 50s and 60s the UN nearly doubled in size as Africa broke from the mandate system and created many new states. This resulted in the General …
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What changes in the structure of the SC have been suggested and what are pros and cons of those changes?
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a. The Security Council: Five great powers (United States, Britain, France, Russia, China) and ten rotating powers make decisions about international peace and security.
b. Suggested changes:
i. Make Germany and Japan permanent great powers in the SC
1. Pro: Reward the two states for t…
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How is peacekeeping different from military action?
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a. Peacekeeping Forces: Work to calm regional conflicts, playing a neutral role between parties. UN peacekeepers wear blue helmets and must be invited by the host country's government and leave when ordered by said government.
b. Peacekeeping is carried out by lightly armed soldiers (in …
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What are three reasons that states follow international law?
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1. Reciprocity
2. Fear of Sanctions
3. Reputation - future alliances/security
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What are the advantages of bringing a cross-national dispute to a national court? Why is the US a favorite jurisdiction in which to bring cases? Why was Belgium a popular venue for international human-rights cases? What are some important limits to the use of national courts for internati…
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a. National courts hear cases brought under national laws and can enforce judgments by collecting damages or imposing punishments. Judgments are enforceable and winning parties can collect assets from the losing party as payment.
b. The US is a favorite because it has a reputation for re…
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How do states use the diplomatic environment to communicate displeasure to another state?
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a. Breaking diplomatic relations and withdrawing ones diplomats from a state shows displeasure with other governments. It is a refusal to do business.
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When is military force justified under the just war doctrine?
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a. Military force is justified if a state is aggressed upon. Aggression refers to the use of force or the imminent threat to do so. Justified responses include both repelling the attack and punishing the attacker.
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Exxon-Mobil is being sued by a human rights NGO in what court? Why?
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• The International Labor Rights Fund is suing Exxon
• Exxon Mobile established a compound/processing plant in Indonesia. To do so, Exxon
negotiated with the government. Exxon promised that people of Aceh would get profits, as they were forced out of their land in order for the plant to…
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What are EPZs?
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EPZs = Export Processing Zones
• AKA "free trade zones" (not the same as a free trade area)
• Most in developing countries
• Special zones where normal trade barriers (tariffs and non-tariff barriers) do not apply
• Rationale - to attract foreign business and boost economy
• Often us…
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What are the advantages and disadvantages to developing countries to using EPZs as a tool for economic development?
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Typical Incentives in EPZs
• No taxes or tax free for many years
• Special services in the zone, e.g. better infrastructure than rest of country
• Security
• Close to airports
• Few labor protection laws
• Low wages
• Unions are illegal
• No responsibility to protect the environme…
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Criticism of WTO: Labor and Environment
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• Labor and environmental issues are ignored
• Poor working conditions, child labor
• Labor unions
• Condemn lack of labor rights in developing countries (e.g. EPZs)
• Argue that jobs are being lost in developed countries - unfair practices
• Environmentalists - attempts to include p…
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Criticism of the WTO: Developing Countries
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• Developing countries have little influence
• Global economy not managed impartially but with North bias
• Maintenance of agricultural subsidies in US and Europe while pressing developing countries to open markets
• TRIPS agreement (intellectual property) - limits developing countries…
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Criticism of WTO: Decision Making Processes
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• Processes criticized as unrepresentative, little voice for developing countries
• Lack of transparency
• Much decision making is done in informal meetings where wealthy countries reach agreements
• Developing countries have fewer resources to bring complaints to the dispute resolutio…
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The industrialized West accounts for what proportion of international trade?
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a. South - 40%
b. North - 60%
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When do sanctions work and when do they fail? Why are sanctions difficult to apply?
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Sanctions work if states keep their word and actually halt economic interactions with the state of choosing. If states do not comply and break the sanction, then the sanction loses its strength and purpose. For instance, the US imposed sanctions on Iran and it took years for Europe to joi…
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In relation to international trade negotiations, what are the key tensions between the global North and South surrounding the garment industry, agriculture, and intellectual property rights?
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The Global North exploits the global South for resources and sells them back at a higher price, while the Global South illegally gets hold of intellectual property rights such as computer software, music and entertainment products.
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What caused a setback in the US and world economies in the 1930s? How did the Hawley-Smoot Act contribute to that setback?
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a. Great Depression: severe economic setback
b. Smoot-Hawley Act: Protectionist measure that imposed very high tariffs on imports in order to convince Americans to buy local goods to stimulate the US economy. This however cause other states to retaliate and do the same thing - reducing g…
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What are transitional economies? Why has the transition been difficult?
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a. Transitional Economy: Converting from Communism to Capitalism: Happening now in Eastern Europe and the Soviet Union
b. This transition is hard to make because it shifts the nation's economy and mindset from relying solely on the government to now relying on private business. In the fi…
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How are workers in industrialized countries negatively affected by free trade? How are workers in developing countries negatively affected by free trade?
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a. Workers in industrialized countries face increasing competition from low-wage countries in the South that can charge less for labor and severely lower costs, bringing business to them instead of staying in the industrialized state.
b. Workers in developing countries face exploitatio…
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How is the environment sometimes impacted negatively by free trade?
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People try to make the most of their money, and protecting the environment and taking appropriate measure to do so can take a lot of time, money and resources that companies don't want to waste. Free trade leads people to want to exploit their resources for all they are worth, often resul…
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According to liberalism, what are the three proper functions of government in the market?
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Legitimate functions of government:
i. National defense
ii. Administration of justice, protection of property rights, enforcement of contracts.
iii. Build infrastructure (roads, bridges, ports, etc) necessary to functioning of market, but
not profitable for private entrepreneurs
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What does Liberalism believe in?
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a. Individual rights and liberties
b. Limited government
c. Free markets
d. ECONOMIC LIBERALISM:
i. Adam Smith challenged mercantilism ii. Liberalism assumes anarchy
iii. ... but doesn't rule out cooperation
to achieve mutual gains (not altruism, rather Tragedy of the Commons lesson…
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What is the idea of the invisible hand? Whose idea is this?
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Adam Smith. Individuals who produce goods and services that people want, at a fair price, will prosper
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Why is the classical liberal economic view not in favor of protectionism?
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Protectionism does not allow pure competition - it is imposed by the government, who shouldn't be allowed in the market
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What tensions have made it difficult for any agreements to be reached in the Doha round?
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The increasing North South gap caused tensions, and the Global south walked out of the meeting when the Global North refused to lift subsidies that were clearly harming the global south
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What are national currencies valued against in today's world?
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National currencies are valued against each other, not gold or silver.
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What is a strong currency? A weak currency? Why do investors prefer a strong currency?
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a) Strong currencies: US dollar, Euro, yen, British Pounds, Canadian Dollars
Money is strong in politically stable environments with low inflation rates, consistent monetary/fiscal policies, long term stability and a strong economy.
b) Weak currencies fluctuate often and are not smart t…
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Bretton Woods set a regime of stable monetary exchange that lasted from 1944 to 1971. What happened in 1971?
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In 1971 the gold standard was abandoned in an event sometimes called "the collapse of Bretton Woods". The dollar had seriously become overvalued, so the IMF drew up a new world currency, the Special Drawing Right (SDR) referred to as "paper gold" that was produced in limited amount in ord…
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Why do states go into debt?
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One main reason is trade deficit where the difference in money must be paid out to trading partners. A second reason is the income/consumption pattern of citizens - sometimes people spend too much money and must borrow from banks who sometimes get money from foreign lenders. A third reaso…
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What are some of the economic challenges that are faced by Russia and E. Europe after the Cold War?
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There were many issues as these regions fought to transition from a socialist centrally planned economy to more of a capitalist economy. The states had to fight to integrate themselves into the world trading system and attract foreign investment. It was hard to establish a stable currency…
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Why did China escape harm from the 1997 Asian financial crisis?
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China's economic growth was less speculative (although rapid), its currency was not freely tradable, and its government showed great discipline to control inflation.
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How does the mercantile view of foreign direct investment differ from the liberal view?
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a) Mercantile - suspicion, view as loss of sovereignty; pro-protectionism People don't want to let in products they don't want
b) Liberal - allows global efficiency, increasing wealth is good for all over time, foreign investment helps US economy
If you have a comparative advantage, yes…
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1) What country has been producing high quality counterfeit US currency? Why
can this be seen as a threat to national security?
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a) North Korea produces very high quality counterfeit money
b) Under the Bush administration, this was see as a threat:
Counterfeiting can be seen as an act of war
Counterfeiting could be construed by some as a hostile act against the US
Can create a lack of trust in the national curr…
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What are some of the criticisms of the IMF?
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• IMF has supported military dictatorships
• SAPs or Structural Adjustment Programs ("austerity programs"= reductions in domestic social
programs)
o There are requirements for these adjustments
• Delays in IMF response to crises
• Policies that actually do the opposite of what was in…
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Criticisms of the World Bank?
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• Rather than reducing poverty, the Bank supports US business interests
• Bank projects have actually sometimes
o Increased poverty
o Been detrimental to the environment and public health
• Promotion of US/Western political interests
• "Imperialist" structure of the Bank - President …
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1) What are the pros and cons for developing countries when they allow MNCs to operate within their borders?
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• Pros - Engines for positive domestic and global economic growth o Contribute to host country's modernization, e.g. China
o Accelerate economic growth (e.g. India)
o Foster peace
o Force for global integration (teaches skills for business in globalized economy, create jobs, raise stan…
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Why did President Nixon bring an end to the gold standard?
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• Overspending on Vietnam war
• Increasing cost of energy
• Europe and Japanese recovery post WWII
• Trade deficit
• Dollar overvalued and dropped in relation to gold
• Many countries came to US to get gold in exchange for dollars they held
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What is the most successful example of international integration? Why is it surprising that this region is successfully integrating?
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a. Most successful: European Union
i. This is surprising due to the history of this region. These states were extremely sovereign, and full of old rivalries, tension and war.
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What is spillover in relation to neofunctionalism? Why did functionalists such as Schuman and Monnet suggest that technical (and later scientific) collaborations be undertaken as a step toward integration and peace?
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a. Spillover refers to closer economic ties resulting in "spillover" of integration, causing further growth such as political integration as well as economic.
b. Schuman and Monnet believed future wars could be prevented by creating economic linkages that would eventually bind countries …
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How did the Treaty of Rome reduce state leaders' fears of losing sovereignty?
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a. 1957 - France, Germany, Italy, Netherlands, Luxembourg, Belgium create Euratom and the EEC to aid integration under this Treaty.
b. Euratom coordinated nuclear development and knowledge, while the EEC (later the EC) established rules about trade (free trade areas, customs unions and c…
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Why are EU political leaders as well as some EU citizens concerned about "Eurocrats"?
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a. The EU headquarters has a reputation of having faceless "Eurocrats" that care more about technology than politics making decisions and provisions. States get concerned that they are losing power to people they don't even know and can't deal with face to face.
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What two major changes were initiated by the Single European Act (Europe 1992 and the European Central Bank)?
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a. Creation of the Central European Bank which would create a national currency (euro)
b. Eliminate both tariff and non-tariff barriers within the alliance - allow labor, capital and workers to move across borders freely.
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How does the case of the "chocolate wars" illustrate tensions around economic integration?
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Chocolate Wars: In the quest for 1992 Europe, the definition of "chocolate" was disputed. Belgium used all cocoa butter, Britain used oil which was cheaper. As Europe became an open market, GB and Belgium became direct competitors, and GB could easily sell their chocolate for less due to …
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One problem with achieving a monetary union in the EU is that the economies of the countries vary greatly in their strength. How did the Treaty of Maastricht attempt to deal with this problem?
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a. In attempt to deal with this issue, the Treaty of Maastricht established the euro - a common currency used throughout all members of the EU.
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What is the nature of the digital divide between the Global North and South? In Africa? In the EU?
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The digital divide follows the North South Gap - and is especially highlighted in Africa.
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In what way does China stand at the center of the debate over sustainable development?
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In the drive for rapid economic growth, these countries have created serious pollution and other environmental problems. In early 2013, Beijing's photochemical smog exceeded dangerous levels of and residents who ventured outside suffered burning lungs and stinging eyes. Because of China's…
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In what ways have states had more success in negotiating agreements and developing regimes to manage the ozone problem compared to dealing with global warming?
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o The costs of replacing CFCs are much lower than the costs of addressing global warming. CFCs can be replaced with other chemicals at relatively modest costs. Furthermore, the consequences of ozone depletion are much better understood and more immediate in time than those of global warmi…
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Where are most of the largest rain forests located? What issues are relevant to the rain forests for the developing countries that have them?
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a. The largest rainforests on earth are located in mostly poor states such as Brazil, Indonesia, Malaysia and Madagascar
b. Important issues include economic benefits due to forest exploitation.
i. Cutting lumber
ii. Clearing land for agriculture and mining (slash and burn)
o Leaders …
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How do energy consumption patterns differ between the regions of the world; who uses more and who uses less, and why? What country has the largest oil reserves and is the largest oil exporter?
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a. The 4 industrialized regions of the North use much more energy per person than those of the South
b. US uses 15 times as much per person as South Asia and Africa combined (not industrialized countries)
c. Among industrialized countries there are differences in the efficiency of energ…
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What were the events in 1973 that led to the "oil shock"?
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The Arab-Israeli War was the key reason that lead to the oil shock. The oil producing Arab states of the region decided to punish the US for supporting Israel. They cut off their oil exports to the US and curtailed their overall export. This supply disruption sent world oil prices skyrock…
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What is the role of women's status in population growth (or decrease) and what factors affect women's choices and ability to impact birthrate?
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a. Cultures that traditionally see women as valuable only in the sense of caretakers and reproduction = pressure for women to conform
i. Many women do not use birth control because their husbands will not allow itii. Husbands may think that having many children is proof of his manliness.…
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How has AIDS deepened the North-South division? How is AIDS a collective goods problem?
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a. A 2001 UN conference revealed that there exist sharp differences between western, secular states and a number of Islamic states that object to and reference of gay people.
b. The Iranian president claimed in a 2007 speech at Colombia University that there exist no gay people in Iran
…
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What is the Carter Doctrine? How is it relevant to US policy toward oil in the Middle East?
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a. Carter doctrine - it is in the US interest to have a hand on the Persian gulf (oil)
i. Carter first stated that US should cut down on oil consumption -- not successful in public
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About how many people live in abject poverty and where in the world are they concentrated? Somewhere in the world every 6 seconds a child dies as a result of what?
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o About 1 billion people in abject poverty, without access to basic nutrition or health care. They are concentrated in Africa, where income levels have lagged for decades.
o 2 decades ago the poverty concentration was especially high in South Asia - home to 2 billion
people. Economic gr…
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What is the status of water in the global South? How is unsafe drinking water related to disease?
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o In many rural locations people have to walk miles every day to find drinkable water
Note: access to water does NOT mean running water in every household, but a clean well
near a village
o 1990-2010 the number without water access decreased by half, meeting the MDG target earlier than…
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What causes urbanization in the global South?
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o Urbanization is not caused, like many think, by higher population growth in cities compared to the countryside. In actuality people in the cities are generally higher educated, have lower birth rates and earn higher incomes.
o Urbanization is mainly caused by people moving from the cou…
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Why do people migrate? Why do industrialized states attempt to limit immigration from the South?
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o People migrate in search for better economic opportunities, professional environments or to be closer to their culture or religion voluntary migration
o Limits are constructed because immigrants need education, health care, housing, and support services. Some feel that immigrants disru…
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What are the international norms concerning treatment of refugees? How are refugees a collective goods problem?
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o International norms obligate countries to accept refugees who arrive at their borders. Refugees from wars or natural disasters are generally housed in temporary refugee camps until they can return home. Refugees from political persecution may be granted asylum to stay in the receiving c…
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What are four major reasons for the fact that most former colonies are making only slow progress in accumulation? (Technical and administrative skills; economies based on single or dual commodities; borders and ethnic rivalries; ineffective postcolonial governments)
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o 1. Under colonialism the economy of suffered because they were only developed to serve the European market. Rested on the exports of only one or two products. Economies based on single or dual commodities
Time and capital are crucial. Leaders often don't want to reconstruct an economy …
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How do revolutionary governments deal with foreign policy? What happens to revolutionary governments after a decade or two?
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o By starting out planning radically different relationships with neighbors & great powers: The pattern of international alliances often shifts after revolutions (Cold War)
o A new government. usually discovers that, once it holds power, it has the same interest as other states in promot…
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1) Extreme poverty spills over and creates other problems. What are some of these problems? 2) How does spending on perfumes in the US and Europe compare to spending to improve basic health and nutrition in the global South? 3) What is the relationship between drug companies and health in…
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1) fuels anti-western sentiments, vulnerability, lack of education, lack of health support
2) if a small % of perfume investment from global north would make a BIG difference in global South
3) relationship - companies in global north don't lower price for the AIDS medication thus globa…
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After Mao died in 1976, what economic reforms were instituted by Deng Xiaoping?
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Deng instituted economic reforms and transformed its southern coastal provinces into free economic zones open to foreign investment and run on capitalists principles. Peasants worked their own fields instead of collective farms and got rich (by Chinese standard) if they did well. Entrepre…
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Third world states want to use manufacturing to improve their economies. What is one great difficulty in getting this sector started?
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o A great difficulty is seeking out a niche for manufacturing goods instead of raw materials. A developing country must compete against industrialized countries with better technologies more skillful workers and greater capital assets.
o It is not a sufficient method to subsidize and pro…
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How does corruption in the global South present a collective goods problem for states in the North?
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Corruption in the global South presents a collective goods problem because MNCs as well as states in the global North lose money by having to make private payoffs and deals with the corrupt leaders. This creates the incentive to only stop corruption ones other industrialized states do.
…
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Why do poor countries have an interest in foreign investment inside their borders? What are the pros and cons of foreign investment?
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o Poor countries have an interest in foreign investment inside their borders because they have little money available to invest in new factories, farms, mines, or oil wells. So foreign investment is one way to get accumulation started.
o Cons: the foreign investor can usually take the pr…
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What are the advantages and disadvantages of borrowing for poor countries? What was the third world debt crisis? What are the tensions around debt renegotiation?
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o Advantages and disadvantages of borrowing for poor countries:
Advantages: it keeps control in the hands of the state and does not impose painful
sacrifices on local citizens, at least in the short term.
Disadvantages: the borrower must service the debt- making regular payments of int…
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What was the impact of the exclusion of the agriculture and textile sectors from the rules of the GATT?
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The impact of the exclusion of the agriculture and textile sectors: World trade deals concentrated on free trade in manufactured goods, in which states in the North have comparative advantage. As a result, some developing countries had to open their home markets to foreign products, again…
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What is foreign assistance? Where does the majority of foreign assistance come from?
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Foreign assistance- is money or other aid made available to help states speed up economic development or simply meet basic humanitarian needs. the majority of foreign assistance comes from governments in the North. More than 90% came from members of the Development
Assistance committee c…
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What is Nigeria's economic status? How is its current economic status in part a legacy of colonialism?
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Foreign assistance- is money or other aid made available to help states speed up economic development or simply meet basic humanitarian needs. The majority of foreign assistance comes from governments in the North. More than 90% came from members of the Development Assistance committee co…
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PSC 124: Exam 1