PoliSci5 S. Hyde UC Berkeley Midterm 2

civil war

A war in which the main participants are within the same state

terrorism

The use or threatened use of violence against noncombatant targets by individuals or nonstate groups for political ends. Compare civil war.

asymmetrical warfare

Armed conflict between actors with highly unequal military capabilities

separatist

An actor that seeks to create an independent state on territory carved from an existing state. Compare irredentist.

irredentist

An actor that seeks to detach a region from one country and attach it to another

proxy wars

Conflicts in which two opposing states “fight” by supporting opposite sides in a war

insurgency

A military strategy in which small, often lightly armed units engage in hit-and-run attacks against military, government, and civilian targets.

extremists

Actors whose interests are not widely shared by others; individuals or groups that are politically weak relative to the demands they make.

coercion

A strategy of imposing or threatening to impose costs on other actors in order to induce a change in their behavior.

provocation

A strategy of terrorist attacks intended to provoke the target government into making a disproportionate response that alienates moderates in the terrorists’ home society or in other sympathetic audiences.

spoiling

A strategy of terrorist attacks intended to sabotage a prospective peace between the target and moderate leadership from the terrorists’ home society.

outbidding

A strategy of terrorist attacks designed to demonstrate superior capability and commitment relative to other groups devoted to the same cause.

comparative advantage

The ability of a country or firm to produce a particular good or service more efficiently than it can produce other goods or services

absolute advantage

The ability of a country or firm to produce more of a particular good or service than other countries or firms can produce with the same amount of effort and resources. Compare comparative advantage.

neo-mercantilism

A belief that national economic policy should encourage exports and discourage imports

Heckscher-Ohlin trade theory

The theory that a country will export goods that make intensive use of the factors of production in which it is well endowed. For example

protectionism

The imposition of barriers to restrict imports.

trade barriers

Government limitations on the international exchange of goods. Examples include tariffs

tariff

A tax imposed on imports. Tariffs raise the domestic price of the imported good and may be applied for the purpose of protecting domestic producers from foreign competition.

quantitative restriction (quota)

A limit placed on the amount of a particular good that is allowed to be imported and sold domestically.

nontariff barriers to trade

Obstacles to imports other than tariffs (trade taxes). Examples include restrictions on the number of products that can be imported (quantitative restrictions, or quotas); regulations that favor domestic over imported products; and other measures that discriminate against foreign goods or services. “Buy American” laws that govern what state and local governments can buy, for example, are an implicit—but nontariff—obstacle to the purchase of imports.

Portfolio Investment

Investment in a foreign country via the purchase of stocks (equities), bonds, or other financial instruments. Portfolio investors do not exercise managerial control of the foreign operation. Compare foreign direct investment.

Most-favored nation (MFN) status

A status established by most modern trade agreements guaranteeing that the signatories will extend to each other any favorable trading terms offered in agreements with third parties.

Stolper-Samuelson theorem

The theorem that trade protection benefits the scarce factor of production. This view flows from the Heckscher-Ohlin theory: if a country imports goods that make intensive use of its scarce factor, then limiting imports will help that factor. So in a labor-scarce country, labor benefits from protection and loses from trade liberalization.

Ricardo-Viner (specific-factors) model

A model of trade relations that emphasizes the sector in which factors of production are employed rather than the nature of the factor itself. This differentiates it from the Heckscher-Ohlin theory, in which the nature of the factor—labor, land, capital—is the principal consideration.

reciprocity

In international trade relations, a mutual agreement to lower tariffs and other barriers to trade. Reciprocity involves an implicit or explicit arrangement for one government to exchange trade-policy concessions with another.

World Trade Organization (WTO)

An institution created in 1995 to succeed the GATT and to govern international trade relations. The WTO encourages and polices the multilateral reduction of barriers to trade, and it oversees the resolution of trade disputes. Compare General Agreement on Tariffs and Trade.

General Agreement on Tariffs and Trade (GATT)

An international institution created in 1947 in which member countries committed to reducing barriers to trade and providing similar trading conditions to all other members. In 1995, the GATT was replaced by the WTO. Compare World Trade Organization.

regional trade agreements (RTAs)

Agreements among three or more countries in a region to reduce barriers to trade among themselves.

Sovereign lending

Loans from private financial institutions in one country to sovereign governments of other countries

Foreign direct Investment (FDI)

Investment in a foreign country via the acquisition of a local facility or the establishment of a new facility. Direct investors maintain managerial control of the foreign operation. Compare portfolio investment.

World Bank

An important international institution that provides loans at below-market interest rates to developing countries, typically to enable them to carry out development projects.

recession

A sharp slowdown in the rate of economic growth and economic activity. Compare depression.

depression

A severe downturn in the business cycle, typically associated with major declines in economic activity, production, and investment; a severe contraction of credit; and sustained high unemployment. Compare recession.

default

To fail to make payments on a debt.

austerity

The application of policies to reduce consumption, typically by cutting government spending, raising taxes, and restricting wages.

Bank for International Settlements

One of the oldest international financial organizations, created in 1930. Its members include the world’s principal central banks, and under its auspices they attempt to cooperate in the financial realm.

International Monetary Fund (IMF)

A major international economic institution established in 1944 to manage international monetary relations. It has gradually reoriented itself to focus on the international financial system, especially debt and currency crises.

multinational corporation (MNC)

An enterprise that operates in a number of countries, with production or service facilities outside its country of origin.

global supply chains

A network of customers and suppliers involved in the production and distribution of a product. Parts of it may be inside a multinational corporation; parts may also involve links between corporations.

bilateral investment treaty

An agreement between two countries about the conditions for private investment across borders. Most of these treaties include provisions to protect an investment from government discrimination or expropriation without compensation as well as mechanisms to resolve disputes.

exchange rate

The price at which one currency is exchanged for another.

appreciate

In terms of a currency, to increase in value relative to other currencies. Compare depreciate.

depreciate

In terms of a currency, to decrease in value relative to other currencies. Compare appreciate.

devalue

To reduce the value of one currency relative to other currencies.

monetary policy

An important tool of national governments to influence broad macroeconomic conditions such as unemployment, inflation, and economic growth. Typically, governments alter their monetary policies by changing national interest rates or exchange rates.

central bank

The institution that regulates monetary conditions in a country’s economy, typically by raising or lowering interest rates and the quantity of money in circulation.

fixed exchange rate

An exchange-rate policy under which a government commits itself to keeping its currency at or around a specific value relative to another currency or a commodity, such as gold. Compare floating exchange rate.

gold standard

The monetary system that prevailed between about 1870 and 1914, in which countries tied their currencies to gold at a legally fixed price.

floating exchange rate

An exchange-rate policy under which a government permits its currency to be traded on the open market without direct government control or intervention. Compare fixed exchange rate.

Bretton Woods monetary system

The monetary order negotiated among the World War II Allies in 1944, which lasted until the 1970s and which was based on a U.S. dollar tied to gold. Other currencies were fixed to the dollar but were permitted to adjust their exchange rates.

adjustable peg

A monetary system of fixed but adjustable rates. Governments are expected to keep their currencies fixed for extended periods but are permitted to adjust the exchange rate from time to time as economic conditions change.

international monetary regime

A formal or informal arrangement shared by most countries in the world economy to govern relations among their currencies./