Poli Sci 140 FINAL UW-Madison

Mercantilism

an economic theory and a political ideology opposed to free trade: it shares with realism the belief that each state must protect its own interest without seeking mutual gains through international organizations.

Economic Liberalism

in the context of International Political Economy (IPE), an approach that generally shares the assumption of anarchy (the lack of a world government) but does not see this condition as precluding extensive cooperation to realize common gains from economic exchange. it emphasizes absolute over relative gains and, in practice, a commitment to free markets, free trade, free capital flows and an "open" world economy.

Free Trade

the follow of goods and services across national boundaries unimpeded by tariffs or other restrictions; in principle (if not always in practice), free trade was a key aspect of Great Britain's foreign economic policy after 1846 until WW1 and of U.S. policy after 1945.

Balance of Trade

the value of a state's exports relative to its imports

Comparative Advantage

the principle that states should specialize in making goods that they produce with the greatest relative efficiency and at the lowest relative cost (relative, that is, to other goods produced by the same state).

Autarky

a policy of self-reliance, avoiding or minimizing trade and trying to produce everything one needs (or the most vital things) by oneself.

Protectionism

the protection of domestic industries against international competition, by trade tariffs and other means.

Dumping

the sale of products in foreign markets at prices below the minimum level necessary to make a profit (or below the average cost of production)

Tariff

A duty or tax levied on certain types of imports (usually as a percentage of their value) as they enter the country

Non-Tariff Barriers

forms of restricting imports other than tariffs, such as quotas (ceilings on the volume of imports of a particular good).

Industrialization

the use of fossil-fuel energy to drive machinery and the accumulation of such machinery along with the products created by it.

Centrally Planned Economy:

an economy in which political authorities set prices and decide on quotas for production and consumption of each commodity according to a long-term plan.

Transitional Economies

Former Soviet republics and Eastern European countries that have shifted from communist to capitalist economic systems with various degrees of success.

State-Owned Industries

Industries such as oil companies and airlines that are owned wholly or partly by the state because they are thought to be vital to the national economy

Mixed Economies

economies such as those in the industrialized West that contain both some government control and some private ownership

World Trade Organization

an organization begun in 1995 that replaced the GATT and expanded its traditional focus on manufactured goods. The WTO created monitoring and enforcement mechanisms.

General Agreement on Tariffs and Trade

A world organization established in 1947 to work for freer trade on a multilateral basis: the GATT was more of a negotiating framework than an administrative institution. It became the World Trade Organization in 1995

Most-Favored Nation

a principle by which each trade preference granted to any one of a state's trade partners must be granted to all of its trade partners.

Generalized System of Preferences

a mechanism by which some industrialized states began, in the 1970s, to grant tariff concessions to states in the Global South on certain imports; an exception to the Most-Favored Nation (MFN) principle

Uruguay Round

a series of negotiations under the GATT that began in Uruguay in 1986 and concluded in 1994 with an agreement to create the World Trade Organization. The Uruguay Round followed earlier GATT negotiations, such as the Kennedy Round and the Tokyo Round

Doha Round

a series of negotiations under the World Trade Organization that began in Doha Qatar in 2001. it followed the Uruguay Round and focused on agricultural subsidies, intellectual property, and other issues.

North American Free Trade Agreement (NAFTA)

a free trade area encompassing the U.S., Canada, Mexico that was established in 1994

U.S-Mexico-Canada Agreement (USMCA)

The agreement expected to replace NAFTA that increases environmental and labor regulations and incentivizes more domestic production of cars and trucks (2020)

Cartel

an association of producers or consumers (or both) of a certain product; formed for the purpose of manipulating its price on the World Market.

Organization of the Petroleum Exporting Countries

the most prominent cartel of the international economy; its members control about half the world's total oil exports, enough to affect the world price of oil significantly.

Industrial Policy

the strategies by which a government works actively with industries to promote their growth and tailor trade policy to their needs

Intellectual Property Rights

the legal protection of their original works of inventors, authors, creators and performers under patent, copyright and trademark law. Such rights became a contentious area of trade negotiations in the 1990s.

Service Sector

the part of an economy that concerns services (as opposed to the production of tangible goods); the key focus in international trade negotiations is on banking, insurance and related financial services.

Gold Standard

a system in international monetary relations, prominent for a century before the 1970s, in which the value of national currencies was pegged to the value of gold or other precious metals

Exchange Rate

the rate at which one state's currency can be exchanged for the currency of another state. Since 1973, the international monetary system has depended mainly on floating rather than fixed exchange rates.

Convertible Currency

the guarantee that the holder of a particular currency can exchange it for another currency. some states' currencies are non-convertible

Hyperinflation

An extremely rapid, uncontrolled rise in prices, such as occurred in Germany in the 1920s and in some third world countries more recently

Hard Currency

money that can be readily converted to leading world countries

Reserves

Hard-currency stockpiles kept by states

Fixed Exchange Rates

the official rates of exchange for currencies set by governments; not a dominant mechanism in the International Monetary System since 1973.

Managed Float

a system of occasional multinational government interventions in currency markets to manage otherwise free-floating currency rates.

Devaluation

a unilateral move to reduce the value of a currency by changing a fixed or official exchange rate

Central Bank

an institution common in industrialized countries whose major tasks are to maintain the value of the state's currency and to control inflation

Discount Rate

the interest rate charged by governments when they lend money to private banks. the discount rate is set by countries' central banks

Bretton Woods System

a post WWII arrangement for managing the world economy, establishing at a meeting in Bretton Woods, New Hampshire, in 1944. Its main institutional components are the World Bank and the International Monetary Fund (IMF)

World Bank

Formally the International Bank for Reconstruction and Development, an organization that was established in 1944 as a source of loans to help reconstruct the European economies. later the main borrowers were third world countries and, in the 1990s, Eastern European ones.

International Monetary Fund (IMF)

an intergovernmental organization (IGO) that coordinates international currency exchange, the balance of international payments, and national accounts. Along with the World Bank. it is a pillar of the international financial system

Special Drawing Right (SDR)

a world currency created by the International Monetary Fund (IMF) to replace gold as the world standard. Valued by a "basket" of national currencies, the SDR has been called "paper gold"

Less-Developed Countries (Developing Countries)

the world's poorest regions - the global South - where most people live. also called the underdeveloped countries or developing countries

Sustainable Development Goals (SDGs)

UN targets for basic needs, measures such as reducing poverty and hunger, adopted in 2015

Basic Human Needs

the fundamental needs of people for adequate food, shelter, health care, sanitation, and education. Meeting such needs may be thought of as both a moral imperative and a form of investment in "human capital" essential for economic growth.

Malnutrition

A lack of needed foods including protein and vitamins, about 3 million children die each year from malnutrition-related cases

subsistence farming

Rural communities growing food mainly for their own consumption rather than for sale in local or world markets

Cash Crops

Agricultural goods produced as commodities for export to world markets

Urbanization

A shift of population from the countryside to the cities that typically accompanies economic development and is augmented by displacement of peasants from subsistence farming.

Land Reform

policies that aim to break up large landholdings and redistribute land to poor peasants for use in subsistence farming

Migration

movement between states, usually emigration from old state and immigration to the new state

Refugees

people fleeing their countries to find refuge from war, natural disaster, or political persecution. International law distinguishes them from migrants.

Remittances

Money sent home by migrant workers to individuals (usually relatives) in their country of origin.

Economic Surplus

A surplus created by investing money in productive capital rather than using it for consumption

World-System

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 (for example, some of the newly industrializing countries) as the semi-periphery

Resource Curse

the difficulties faced by resource-rich developing countries, including dependence on exporting one or a few commodities whose prices fluctuate, as well as potential for corruption and inequality.

demographic transition

The pattern of falling death rates, followed by falling birthrates, that generally accompanies industrialization and economic development.

Pronatalist

describing government policy that encourages or forces childbearing, and outlaws or limits access to contraception

Infant Mortality Rate

the proportion of babies who die within their first year of life

Multinational Corporation

a company based in one state with affiliated branches or subsidiaries operating in other states

Foreign Direct Investment

the acquisition by residents of one county of control over a new or existing business in another country

Host Country

a state in which a foreign multinational corporation operates (MNC)

Home Country

The state in which a multinational corporation has its own headquarters (MNC)

Technology Transfer

A developing country's acquisition of technology (knowledge, skills, methods, designs, specialized equipment, etc) from foreign services usually in conjunction with direct foreign investment or similar business operations

Brain Drain

Poor countries' loss of skilled workers to rich countries

Default

Failure to make scheduled debt payments

debt renegotiation

A reworking of the terms on which a loan will be repaid; frequently negotiated by developing country debtor governments in order to avoid default.

Paris Club

A group of first world governments that have loaned money to governments in the Global South; it meets periodically to work out terms of debt negotiations.

London Club

A group of private creditors that have loaned money to governments in the Global South; it meets periodically to work out terms of debt renegotiations

IMF Conditionality

An agreement to loan IMF funds on the condition that certain government policies are adopted. Dozens of states in the Global South have entered into such agreements with the IMF in the past 30 years.

Foreign Assistance

Money or other aid made available to developing countries to help them speed up economic development or meet humanitarian needs. Most foreign assistance is provided by governments and is called official development assistance (ODA)

Development Assistance Committee (DAC)

A committee whose members - consisting of states from Western Europe, North America and East Asia - provide 95 percent of official development assistance to countries of the Global South.

Bilateral Aid

Government assistance that goes directly to developing country governments as state-to-state aid.

Multilateral Aid

Government foreign aid from several states that goes through a third party, such as the UN or another agency.

UN Development Program (UNDP)

A program that coordinates the flow of multilateral development assistance and manages 6,000 projects at once around the world (focusing especially on technical development assistance)

Peace Corps

an organization started President John Kennedy in 1961 that provides U.S. volunteers for technical development assistance in developing countries.

Oxfam America

A private charitable group that works with local communities in the Global South to determine the needs of their own people and to carry out development to carry them out.

Disaster Relief

Provision of short-term relief in the form of food, water, shelter, clothing, and other essentials to people facing natural disasters.