AP CoGoPo Vocabulary: Political and Economic Changes

Economic globalization

includes economic networks that are growing more interconnected, a worldwide market with actors unconstrained by political borders, and a reduction in state control over economies

Multinational corporations (MNCs)

businesses with a large presence in countries in different regions of the world. MNCs increasingly dominate global markets and pose challenges to, and sometimes conflict with, domestic economic policies regarding labor, the environment, land rights, taxation, and the budget

Special economic zones

areas in China (particularly along China's east coast) designated by the government as regions where private businesses could attract foreign direct investment

Privatization

converting government-owned industries to businesses run with free-market forces that are owned and operated by private investors

Nationalization

process by which the government gains ownership of industries; run without free-market forces

Foreign direct investment

money invested in private businesses by individuals or a corporation outside of the country that can pose a challenge to a government's foundational economic and political ideas and principles

Environmental degradation

environmental problems created by industrialization and other forms of economic development

International organizations

organizations joined by member states with a common interest such as the International Monetary Fund (IMF), the World Bank, and the United Nations

International Monetary Fund (IMF)

exerts great influence through preconditions for financial assistance; countries that receive IMF assistance often must agree to structural adjustment programs requiring privatization of state-owned companies, reduced tariffs, and reduced governmental subsidies of domestic industries

World Bank (WB)

multi-country financial services provider and lender that offers loans and grants for lower income countries to build infrastructure projects

Supranational organizations

organizations in which member states grant the governing organization sovereignty over policies typically related to trade such as the Economic Community of West African States (ECOWAS), the European Union (EU), and the World Trade Organization (WTO)

Structural adjustment programs

neoliberal reforms often required by international organizations granting emergency loans to countries that require privatization of state-owned companies, reduced tariffs, and reduced governmental subsidies of domestic industries

Tariffs

taxes imposed by a government against imported goods

Trade liberalization

affects the growth of domestic and foreign business, the amount of direct foreign investment, foreign exchange rates, population movement, and often the quality of the environment. Reducing tariffs may lower consumer costs at the expense of domestic industry, while increasing tariffs may protect domestic industry against foreign imports but at the expense of higher consumer prices

Subsidies

government funding made to support domestic industries against foreign competition or to shape economic behaviors

Import substitution industrialization (ISI)

policies aimed at reducing foreign dependency by raising tariffs and encouraging local production of industrialized products

Austerity measures

governmental budget cuts and / or tax increases intended to decrease budget deficits and national debt; often required for IMF emergency loans

Demographic changes

the growth (or decrease) and movement of a population in a country

Gender equity

civil rights ideal for women to be protected with equal treatment and to secure equal power as men in governing a country

Maquiladora zones

areas of Mexico's manufacturing industry mostly located in northern Mexico; factories established to assemble parts imported from the United States for assembly in Mexico made more possible due to NAFTA. Contributed to greater economic development in the north than in the south, as well as other regional disparities

Rentier states

countries that obtain a sizable percentage of total government revenue from the export of oil and gas or from leasing the resource to foreign countries and have been able to raise standards of living and fund governmental programs based on their huge reserves

Industrialization

movement from agricultural economic production to industrial manufacturing

Resource curse

countries that rely too heavily on the export of commodities face negative economic, political and environmental consequences

Economic diversification

when a country is able to obtain economic balance between agriculture, manufacturing, and service without over dependence on one commodity or economic sector