Key Concepts in Global Economics and International Organizations

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 that increasingly dominate global markets and pose challenges to domestic economic policies.

Special economic zones

Areas in China designated by the government as regions where private businesses could attract foreign direct investment.

Privatization

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

Nationalization

Government-owned 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 challenge a government's foundational economic and political ideas.

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.

Supranational organizations

Organizations in which member states grant the governing organization sovereignty over policies typically related to trade.

Structural adjustment programs

Neoliberal reforms often required by international organizations granting emergency loans to countries.

Tariffs

Taxes imposed by a government against imported goods.

Subsidies

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

Import substitution industrialization (IST)

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.

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.

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.

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.