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60 Cards in this Set
- Front
- Back
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One criticism of using gross national product (GNP) to determine how well countries are doing is that the GNP
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does not take into account Prices for locally consumed goods despite the fact that their cost affects purchasing power.
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Why are economic nationalists suspicious of economic interdependence?
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They believe that it undermines state sovereignty and weakens national economic strength.
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All of the following are terms associated with economic structuralism except
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Neoliberalism
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World system theorists would argue that the U.S. role in the Persian Gulf during the 1990s was the result of the U.S. desire to
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Protect oil-producing countries so that they could continue to get crude oil at lower prices.
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Increased supply and demand for material goods can be traced back to
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The industrial revolution
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The primary reason that the General Agreement on Tariffs and Trade was established was to
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Provide a means for countries to reduce international trade barriers
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Approximately how many people in the world live in extreme poverty?
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1 billion
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A measure of a country’s total credits and debits is
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Its balance of payments.
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The end of the cold war has
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Lessened the need for strategic cooperation.
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A country’s sale of its exports in foreign markets at below-cost prices is known as
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Dumping
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Using a country’s economic data, such as GDP, is an absolute and accurate way to determine its wealth and to compare countries
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False
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International exchange rates have little impact on domestic economies.
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False
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Disparity within countries is not an economic problem facing LDCs.
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False
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Tax breaks are no longer a popular form of governmental subsidy.
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False
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The incorporation of protectionist policies provides for greater economic equality in LDCs
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False
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An approach to the study of international relations that is concerned with the political determinants of international economic relations and also with the economic determinants of international political relations
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International political economy (IPE)
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A measure of the sum of all goods and services produced by a country’s nationals, whether they are in the country or abroad
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Gross national product (GNP)
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A measure of income within a country that excludes foreign earnings
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Gross domestic product (GDP)
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A measure of the relative purchasing power of different currencies. It is measured by the price of the same goods in different countries, translated by the exchange rate of that country’s currency against a base currency, usually the U.S. dollar.
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Purchasing power parity (PPP)
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The value of dollars expressed in terms of a base year. This is determined by taking current value and subtracting the amount of inflation between the base year and the year being reported. Sometimes called uninflated dollars. Any currency can be valued in real terms. See also Current dollars.
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Real dollars
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The value of the dollar in the year for which it is being reported. Sometimes called inflated dollars. Any currency can be expressed in current value. See also real dollars
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Current dollars
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The belief that the state should use its economic strength to further national interests, and that a state should use its power to build its economic strength.
Realist approach IPE as a zero-sum game Emphasis on political goals Practices Imperialism/neoimperialism Economic incentives and disincentives Protectionism and domestic economic support |
Economic nationalism
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The belief that international economic relations should and can be conducted cooperatively because the international economy is a non-zero-sum game in which prosperity is available to all.
Liberal approach Free economic interchange, laissez-faire, capitalism Non-zero-sum game Adam Smith's The Wealth of Nations (1776) Practices National competition, but cooperation is increasing Limited role of politics in economics Keynesian economics Use IGOs and national governments to regulate international economic interchange IMF, GATT, and other organizations to promote trade and ease inequities |
Economic internationalism
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The belief that economic structure determines politics, as the conduct of world politics is based on the way that the world is organized economically. A radical restructuring of the economic system is required to end the uneven distribution of wealth and power.
Marxism, neoimperialism, neocolonialism Also includes dependency theory and world systems theory Structure determines politics and structure is based on the “haves” (EDCs - economically developed country) exploiting the “have-nots” (LDCs) |
Economic structuralism
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It is bases on the ideas of Karl Marx who with Friedrich Engels in The Communist Manifesto (1848) depicted the struggle between the propertied and powerful bourgeoise and the poor and oppressed proletariat over the distribution of wealth as the essence of politics.
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Marxist Theory
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Holds that underdeveloped and poverty in the LD's is the result of exploitation by the EDC's.
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Dependency Theory
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Trade
International investment Monetary relations |
The World Economy: Globalization and Interdependence
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General pattern of expanding trade
Merchandise trade (Associated with imports and exports) Primary goods Manufactured goods Services trade (Things you so for others) Includes services from insurance to education |
Trade
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Improved Productive technology (supply)
Increase Demand for Resources demand) Materialism (demand) Improved Transportation (supply and demand) Free trade philosophy |
5 Factors Promoting Expanded Trade
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Stake in foreign companies or real estate, with the aim of gaining controlling interest
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Foreign direct investment (FDI)
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Does not involve control of companies
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Foreign portfolio investment
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Private enterprises
Subsidiaries operating in more than one state Ownership of plants and/or resource extraction in other countries Most based in North |
MNC's also called Transnational Corporations (TNC's)
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The entire scope of international money issues, such as exchange rates, interest rates, loan policies, balance of payments, and regulating institutions (for example, the International Monetary Fund).
Globalization of money Four main banking centers: Germany, Japan, United Kingdom, United States Globalization of financial services North-South patterns of money and banking International regulation of money dominated by North Exchange rates Balance of payments Credits Debits |
monetary relations
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North America and Europe
Africa, Asia, and Central and South America But, there are exceptions–divisions are based more on economic and political factors than on geographic location |
All economic theories recognize that the world is divided into two spheres:
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Not a clear dichotomy
Newly industrializing countries (NICs) Countries in transition (CITs) Inaccurate statistics–difficulty of measuring and reporting Questionable relevance of data (GNP vs. GNP-PPP) Economic vulnerability |
Problems with Classifications
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Trade differences
Dominated by North LDCs dependent on EDCs for export earnings LDCs rely on primary products Investment differences also favor North |
North-South Economic Patterns
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Disparities
LLDCs (least developed countries) Lower life expectancy Lower literacy rate Poor health Less access to food, water, and sanitation services Declining conditions in some LLDCs Vicious circle of extreme poverty and deprivation |
North-South Societal Differences
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Mixed data on development
Uneven patterns of development Disparity among countries Disparity within countries Negative by-products of development Explosive population growth Rapid urbanization |
Evaluating the North-South Gap
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Involves net trade, deficit spending, foreign debts, and so on
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Financial Position
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Possession or lack of energy, mineral, or other natural resources influences levels of self-sufficiency or dependency
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Natural Resources
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Industry is highly concentrated in a few countries
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Industrial Output
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Power of food production (self-sufficiency)
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Agricultural Output
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Slowed growth rate
- More competition from NICs of the South |
Changes in North’s economic climate
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High technology means fewer workers
Exporting the service sector of economies Downsizing and outsourcing |
Shifts in labor force
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Shifting post–cold war alliances
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Changes in North’s political climate
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- LDCs are now asserting with mounting intensity their claim that they have a right to a much greater share of the world’s economic wealth
- North has generally rejected LDC demands for economic concessions - Some LDCs have become major exporters of manufactured goods and, to a lesser degree, services that directly compete with the EDCs’ products and services, thus undermining EDC dominance in those economic areas |
Increased Tension
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Trade reforms
Monetary reforms Institutional reforms Economic modernization Greater labor migration Elimination of economic coercion Economic aid Debt relief |
New International Economic Order (NIEO)
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Trade and investment barriers
Trade and investment supports |
Using economic means to achieve economic ends
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Nontariff barriers
Quotas Pricing limits Health and safety standards Administrative requirements Monetary barriers Investment barriers |
Trade and Investment Barriers
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Providing domestic subsidies
Encouraging dumping Forming cartels |
Ways in which governments intervene in free trade to gain an unfair advantage in the international marketplace
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All violate international trade agreements
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Trade and Investment Supports
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National security restrictions
Economic incentives Economic sanctions |
Using Economic Means to Achieve Noneconomic Political Ends
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Date back to the city-states of Athens and the use of trade embargoes
Use of economic instruments to promote policy is ancient Increased use of sanctions in 20th century Used by both international organizations and individual countries |
History of Sanctions
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Limited success rate, but they remain a regularly used tool
When do they accomplish their goals? Goal is modest Target is politically unstable and weak Sender and target are friendly and trade with each other Imposed quickly and decisively Sender avoids high cost to itself |
Effectiveness of Economic Sanctions
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There may be unintended victims
Country imposing sanctions can be hurt They may be used by EDCs to maintain dominance over LDCs They can harm relations with countries not supporting sanctions They can harm those whom they seek to assist |
Drawbacks of Sanctions
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Capitalism has triumphed over other competing economic models, particularly Marxism and socialism
Greater economic interdependence Yet, powerful arguments against and forces opposed to globalization still exist |
The Future of Economic Nationalist Policy
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The belief that the state should use its economic strength to further national interests, and that a state should use its power to build its economic strength.
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Economic Nationalism
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Taxes, usually based on percentage of value, that importers must pay on items purchased abroad; also known as import taxes or import duties.
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Tarrifs
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The organization that replaced the General Agreement on Tariffs and Trade (GATT) organization as the body that implements GATT, the treaty.
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World Trade Organization (WTO)
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Is an organization that attempts to promote democracy and freedom around the world.
A nonprofit, nonpartisan organization, is a clear voice for democracy and freedom providing valuable statistics and rankings on the state of democracy in the world. Recent ____________ rankings, for example, show that a non-Islamic state is nearly three times more likely to be democratic that an Islamic state. |
Freedom House
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