chapter 2 post ww2 unipolar world order

Rules based international order

Refers to globally enforced open economy policies that are based on the free enterprise system. Ex- a business practice promoting capitalism, free markets, open trade, innovation, and driven largely by private initiative.

Material institutions

Global organizations that are fundamental to promoting good governance, competitive markets, private property rights, and anticorruption policy measures in member countries.

The P5

Permanent members of the 15 member UN Security Council. China, France, Russia, UK, US. Any one of them can veto a UN resolution.

Surveillance

Core responsibility of the IMF and it involves annual monitoring of economic and financial policies of member countries and providing them with policy advice by identifying potential risks and recommending appropriate policy adjustments to sustain economic growth and promote financial stability.

Balance of payment problems

Occur when a nation is unstable to pay essential imports or service its external debt

Financial crises

Can happen when economic shocks lead to failure of illiquid or insolvent financial institutions

Fiscal crises

Caused by excessive national deficits and debt

Capacity building

Typically focuses on how LICs can boost domestic revenues, manage public finances and monetary policy, regulate their financial system, and develop statistical systems

Most Favored Nation (MFN)

Principle requires non discriminatory treatment by and among members and a commitment to transparency in the conduct of its trade activities

Merchandise trade liberalization

Calls for explicit reduction of import tariffs and quotas on manufactured goods

Free trade area

First stage of regional integration process where a group of countries join to eliminate all tariffs and quantitative restrictions (quotas) on imports and exports of merchandise (goods) among them.

Customs union

Second stage of integration. Countries of free trade area would impose a common external tariff on imports from non member countries. Meant to prevent non members from entering the free trade area through the country with the lowest external tariff

Common or single market

Third stage of integration. Members of a customs union will abolish factor movement restrictions. Ex- allowing for the unrestricted movement of production factors (transferability of land, and free movement of labor, capital, and technology).

Economic union

Fourth stage of integration. Members of the single market agree to implement collective fiscal and monetary policies in effect acting as a single country with convergent economic polices.

Political union

Fifth and final stage of regional integration. Economic union acts as a single country both from economic defense and political standpoint

Second best method

A substitute for global trade liberalization which is the first best approach to enhance global prosperity is to aggressively pursue growth via bilateral and regional economic agreements that is the “second best” method for accelerating economic growth of member countries

Responsible coexistence

Given the diverse socioeconomic structure of world economies global and regional trade agreements will need to seek reasonable adjustments based on responsible coexistence with members rather than trying to impose a complex one size fits all trade model on all.

Multipolar world integration blocs

Groups of major pluralistic economies that are less constrained and freer to modify economic collaboration rules between them, the west, and the rest, that are based on the groups respective economic reform agendas, comparative advantages, and geopolitical national self interests.

Multipolar world

Several engines of global economic growth with emerging market engines accelerating at a faster rate that will continue to narrow the gap with the west led unipolar trade blocs

Schengen area

Comprises of the 27 EU countries and 4 non EU countries (Iceland, Liechtenstein, Norway, and Switzerland) whose citizens do not have to show passports when crossing borders.

Stagflation

Occurs when a country experiences both economic recessions and inflation at the same time.

Rules based world order

Is a governance system that incorporates a more diverse, inclusive, and competitive global power structure than current monopolistic, rent seeking, unipolar system.

Unipolar it’s

Global power structure dominated by a single superpower - historically the US - which exerts economic, political, and military influence with limited checks from other nations.

Multipolarity

Shift toward a more balanced global order where power is distributed among several nations or blocs (BRICS+, EU), rather than dominated by one.

BRICS/BRICS+

Coalition of major economies: Brazil, Russia, India, China, and South Africa. BRICS+ refers to its recent expansion to inc,due additional countries like Saudi Arabia and Iran, aimed at creating an alternative to western led institutions

Global south

Term for developing nations mostly in Africa, Latin America, and Asia, often marginalized in global governance but increasingly assertive in demanding equitable treatment.

Sanctions

Penalties or restrictions (ex- trade, bans, asset freezes) imposed by countries or international bodies to influence the behavior of other nations, often without broad international consensus.

Sovereign assets

State owned financial resources (like currency reserves or foreign investments) that can be frozen or seized during international disputes or sanctions.

New Developed Bank (NDB)

Multilateral development bank created by BRICS to fund infrastructure and sustainable development projects, offering an alternative to the IMF and World Bank

Consensus driven decision making

A method where all members must agree before action is taken- used by BRICS+ to ensure equal input despite power asymmetries.

De dollarization

The global trend where countries reduce reliance on the US dollar in trade and finance, opting for local currencies to avoid US based sanctions and influence.

Rules based international order

Post ww2 system built by western nations where global conduct is governed by agreed upon rules and institutions ( like the WTO, IMF), often critiqued for reflecting western interests.

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