Unit 5: Political and Economic Changes and Development

AP Gov vocab

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. (This process facilitates the exchange of goods, services, and capital across countries, resulting in increased trade and investment flows. )

Multinational corporations (MNCs)

Businesses with operations in multiple countries, often impacting local economies and global markets. MNCs sometimes conflict with, domestic economic policies regarding labor, the environment, land rights taxation, and the budget.

Special economic zones

areas in China designed to attract foreign investment and boost economic development by offering favorable conditions such as tax breaks and reduced regulations.

Privatization

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

Nationalization

the process of transferring privately owned assets or industries to government ownership and control. (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 governments’s control over its economy and policy decisions.

Environmental degradation

the deterioration of the environment through depletion of resources such as air, water, and soil, often resulting from human activities and industrialization.

International organizations

Organizations joined by member states with a common interest such as the international monetary Fund the world band and the united nationsthat facilitate cooperation and coordination on global issues such as trade, security, and development.

International Monetary Fund(IMF)

exerts great influence though preconditions for financial assistance that often require economic reforms and policy changes from borrowing countries. 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.

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 Staes, The European Union and the world trade organization

Structural adjustment programs

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

Tariffs

taxes imposed by a government against imported goods

Subsidies

government funding made to support domestic industries against foreign competition 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

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

manufacturing operations in Mexico that import materials and equipment duty-free to produce goods for export, primarily to the US.

Rentier states

countries that derive a significant portion of their national revenues from the rent of their natural resources to external clients, rather than through domestic production.

Resource curse

the paradox where countries rich in natural resources tend to experience less economic growth, democracy, and development due to corruption and reliance on resource revenue. This phenomenon occurs when resource wealth leads to 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.