Global economy

IMF

• Historical process, the result of human innovation and technological progress

• It refers to the increasing integration of economies around the world, particularly through the movement of goods, services, capital, people (labor), and knowledge (technology)

Four Dimension Of Globalization

• Trade in goods and services

• financial and capital markets

• technology and communication

• production

How does globalization differ from internationalization?

• Internationalization = geographic extension of economic activities across borders.

• Globalization = functional integration of activities worldwide. (broader)

IGO’s ( Intergovernmental Organization )

Formed by treaties between states, handle socio-economic, peace, security issues. Ex: UN, IMF, World Bank, WTO.

INGO’s (International NGO’s)

Private, non-profit, independent orgs working across nations. Ex: Red Cross, Greenpeace, IOC.

MNCs vs TNCs

• MNCs: HQ in home country, centralized.

• TNCs: More decentralized, foreign affiliates have decision-making and R&D power.

Westphalian theory

State sovereignty each state controls its territory, no external interference.

World-System Theory (Wallerstein)

A capitalist world economy with endless accumulation of capital and global division of labor.

Core, Periphery, Semi-Periphery

• Core = Advanced, powerful states exploiting periphery

• periphery = weak states, raw material exports, dependent on core

• semi periphery = in between, exploit periphery but exploited by core

Economic Integration

Agreement among countries to reduce trade barriers

Market Integration

• Two markets becoming one

• price changes in one affect the other

• linked globally or locally

Related ideas in market integration

• trade = buying & selling

• Supply & demand = affect the price

• Globalization = word connection

• Competition = lower price, better quality

International Financial Institution (IFI)

An IFI is a financial institution founded by more than one nation, governed by international law, with national governments as shareholders.

Example of IFI’s

• The international monetary found ( IMF )

• the five multilateral development banks ( MDBs )

Five MDBs

• World bank gorup

• african development bank

• asian development bank

• inter american development bank

• european bank for reconstruction & development

World bank Institutions

1. International Bank for Reconstruction and Development
   (IBRD).

2. International Development Association (IDA).

3. International Finance Corporation (IFC).

4. Multilateral Investment Guarantee Agency (MIGA).

5. International Centre for Settlement of Investment Disputes
   (ICSID).

Role of IFS

They were created after the ww2 to help nations recover, manage the global financial system and provide development finance

Contributions of ifis

• They promoted financial stability

• mobilize economic resources

• provide loans

• give professional advice

• support economic and social development

Contribution of IFIs

• They act as a forum global dialogue

• monitor national policies

• provide emergency assistance

• encourage integration and promote long term stability through reforms

Agreement and plans

• The gatt of 1947 - aimed to reduce trade barriers

• the lost decade of 1980 - the NAFTA signed by mexico, canada, and us

• brady plan of 1989 - created by nicholas f brady to make the debt more tradable

• Bretton wood system - create a monetary management system to regulatae commercial and financial

Global changes at the turn of century

• the rise of the internet and e - commerce

• lower transport and communication cost

• the growth of china and india

• the spread of free exchange rates shaped the 2000s

Types of global corporations

• global companies

• international comp

• multinational corp

• transnational companies

Attributes of MNCs

• they have global presence and power

• organizational structure

• growth strategies

• recourse transfer

• conduct market research

four dimension of corporate globality

• Market presences

• supply chain

• capital base

• and corporate mindset

Global interstate system

The way the nation interact with one another without a single central authority, shaped by economic and political interests.

International vs Interstate System

• International system: Broad, includes cultural, economic, and social ties among societies and individuals.

• Interstate system: Narrow, focuses only on state-to-state relations (diplomacy, treaties, negotiations).

Globalization and Government

It shows how globalization weakens the power of governments, shifting influence toward corporations, institutions, and markets.

Effects of Globalization on Governments

It reduces state control over economic policy, increases pressure from international institutions, and makes it harder to maintain social programs.

Importance of Institutions

Institutions set rules, reduce uncertainty, monitor agreements, resolve disputes, and encourage cooperation in an otherwise anarchic international system.

What is the difference between Internationalism and Globalism?

• Internationalism: Cooperation among nations for peace, development, and cultural exchange.

• Globalism: Deep interconnectedness beyond borders, linked to free trade and capitalism, but criticized for weakening identity and increasing inequality.

When did the concept of “system” in international relations become widely used, and by whom?

In the 18th century, by Jean-Jacques Rousseau, who described Europe as a system joined by religion, law, customs, commerce, and balance of power.

How did Georges-Henri Soutou describe the international system?

He said it is marked by balance of power and solidarities in cultural, religious, economic, legal, and diplomatic aspects.

What are examples of interpersonal relations in the global system?

• Tourism,

• international students,

• and migrant workers.

What are examples of intersocietal relations in the global system?

• Global companies (Apple, Toyota),

• religious institutions (Catholic Church), and

• professional networks (e.g., international medical associations).

What challenges do governments face under globalization?

Reduced control over economic policy, pressure from international institutions, and difficulty sustaining social programs.

Why are international institutions important in global governance?

They set rules, reduce uncertainty, monitor agreements, resolve disputes, and encourage cooperation.

What counts as an international institution?

International organizations (UN, WTO, IMF), treaties and agreements (Paris Accord), norms and standards (chemical weapons ban), and regimes (e.g., trade, human rights).

What is Global Governance?

It is the collective management of global issues through cooperation, laws, norms, policies, and institutions to address challenges and promote collective action.

What does Contemporary Global Governance focus on?

It explains how the world is governed without a world government, by creating norms, codes of conduct, compliance systems, and quasi-authoritative values.

When was the United Nations founded and what was its predecessor?

The UN was founded on October 24, 1945. Its predecessor, the League of Nations, was established in 1919 and disbanded in 1946.

What are the five main functions of the United Nations according to its Charter?

• Maintain peace and security.

• Develop friendly relations among nations.

• Achieve global cooperation on economic, cultural, and humanitarian problems.

• Respect and promote human rights.

• Serve as a center for coordinating actions among nations.

What are six key challenges of global governance identified by Ramesh Thakur?

1. Institutional Lag

2. Sovereignty Barrier

3. Power Imbalance

4. Influence Diffusion

5. Legitimacy-Efficiency Trade-off

6. The New Global Divide

According to the Montevideo Convention, what are the four qualifications of a state?

• Permanent population,

• defined territory,

• government,

• and capacity to enter relations with other states.

What characteristics of the territorial state did Eric Hobsbawm identify?

• Defined territory,

• sovereignty,

• monopoly on law and force,

• direct rule,

• and standardized administration.

According to Hobsbawm, how has globalization weakened the state?

• Rise of a transnational economy beyond state control.

• Dependence on regional/global institutions like the EU and banking bodies.

• Decline in territorial importance due to technology and migration.

Despite globalization, what is the remaining essential function of the state according to Hobsbawm?

Redistributing income and wealth through taxation, welfare, public services, and social policies.

What is the UN’s role in global governance?

It acts as the main platform for international cooperation, peacekeeping, promoting human rights, conflict resolution, and coordinating development and humanitarian aid.