Module II: Economic Globalization

Economic Globalization

Historical process where economies become connected through trade, technology, capital, goods, and services.

Characteristics of Economic Globalization

Growing cross-border activities; rapid spread of technology; expansion of markets; increasing economic interdependence; irreversible trend of global development.

Protectionism

Government policy that protects domestic industries through tariffs and quotas.

Tariffs

Taxes imposed on imported goods.

Quotas

Limits on the amount of goods that can be imported.

Trade Liberalization/Free Trade Agreements

Removal or reduction of trade barriers between countries.

Global Stratification

Unequal distribution of wealth, power, resources, and influence among nations.

First World

North American and Western capitalist nations.

Second World

Nations associated with the former Soviet Union.

Third World

Most developing nations during the Cold War era.

Developed Countries

Nations with advanced economies, technology, and infrastructure.

Developing Countries

Nations that are improving economically but are not yet fully industrialized.

Undeveloped Countries

Nations with low economic development and limited industrialization.

Gross Domestic Product GDP Per Capita Classification

High Income, Middle Income, and Low Income.

Global North

Wealthy, industrialized nations with advanced technology and stable governments.

Global South

Poorer nations often characterized by agriculture, poverty, and economic challenges.

Brandt Line

Visual division between the wealthy Global North and poorer Global South.

Willy Brandt

Founder of the Brandt Line concept.

Modernization Theory

Countries become wealthy by adopting modern values, technology, and industrialization.

Dependency Theory

Poor countries remain poor because wealthy countries exploit their resources.

World Systems Theory

Nations which become wealthy denied poorer nations to grow since they exploit most of its available resources, denying them of modernization.
The world economy is divided into Core, Semi-Periphery, and Periphery nations.

Core Nations

Wealthy countries that dominate global trade and industry.

Semi-Peripheral Nations

Countries that share characteristics of both core and peripheral nations.

Peripheral Nations

Less developed countries that depend on core nations for capital and investment.

Metropolis

Dominant nation that benefits from resources from other countries.

Satellite

Dependent nation that supplies resources to the metropolis.

Market Integration

Interconnection of markets, prices, goods, services, and investments across countries.

Bretton Woods System

International monetary system created after World War II to promote economic stability.

GATT

General Agreement on Tariffs and Trade; promotes international trade.

Multinational Corporation (MNC)

Company operating in multiple countries with one central headquarters.

Examples of MNCs

McDonald's, Coca-Cola, Toyota, Walmart.

Transnational Corporation (TNC)

Company operating in multiple countries without a single dominant headquarters.

Examples of TNCs

Unilever, Shell, Nestlé.

Gulf Cooperation Council

GCC; promotes economic cooperation among Gulf countries.

Mercado Comun del Sur

MERCOSUR, this group was established in 1991 to create a single market for goods and services between Argentina, Bolivia, Brazil, Paraguay and Uruguay

South American trade bloc promoting a common market.

African Continental Free Trade Area

AfCFTA; aims to increase trade within Africa.

Association of Southeast Asian Nations

ASEAN; promotes regional economic growth and cooperation.

EU

European Union; regional organization of 27 European countries.

Nation

Group of people sharing common culture, history, language, or ethnicity.

State

Political entity with territory, government, sovereignty, and population.

Elements of a State

People, Territory, Government, Sovereignty.

Global Interstate System

Network of relationships and interactions among sovereign states.

Internationalism

Cooperation and solidarity among nations for global well-being.

Social Internationalism

Belief that social justice and equality can create a fair global society.

Liberal Internationalism

Belief in diplomacy, interdependence, and international cooperation.

Nationalism

Belief that promotes loyalty and devotion to one's nation.

International Agreement

Treaty signed by states establishing global rules.

International Organization

Organization that helps countries cooperate and solve global issues.

International Law

Rules that define the rights and responsibilities of states.

Global Governance

System of laws, norms, policies, and institutions that regulate international relations.

WHO

World Health Organization; major example of global governance in health.

State vs Nation

State is a political/legal entity; Nation is a socio-cultural group.

Can a Nation exist without sovereignty?

Yes.

Can a State exist without sovereignty?

No.

What unites a State?

Laws and regulations.

What unites a Nation?

Shared culture, history, language, and identity.

Role of Metropolis in Dependency Theory

Extracts raw materials and cheap labor from satellite countries.

Role of Satellite in Dependency Theory

Supplies raw materials and cheap labor to the metropolis.

Economic Structure of Metropolis

Diverse, industrialized, and self-sustaining economy.

Economic Structure of Satellite

Dependent economy focused on exporting primary commodities.

Development Pattern of Metropolis

Self-sustaining growth and high standard of living.

Development Pattern of Satellite

Kept in a state of underdevelopment.

Core Countries in World Systems Theory

Dominant capitalist countries that exploit peripheral countries.

Semi-Periphery in World Systems Theory

Countries with characteristics of both core and periphery.

Periphery in World Systems Theory

Countries dependent on core countries and with underdeveloped industries.

Difference Between MNC and TNC

MNCs have one central headquarters; TNCs operate through decentralized networks with greater local autonomy.

Purpose of ASEAN

Promote economic growth, cooperation, and regional stability in Southeast Asia.

Purpose of EU

Promote economic and political cooperation among European countries.

Purpose of AfCFTA

Increase trade and investment across Africa by reducing trade barriers.

Purpose of MERCOSUR

Create a single market for goods and services in South America.

Purpose of GCC

Promote economic integration among Gulf countries.