Trade and economic development

3 ways development is unequal/impacts people's lives

1. average life expectancy

   1. Japan: 85 years

   2. Ireland: 83 years

   3. Central African Republic: 54 years

2. per capita GDP

   1. Switzerland: 104,000

   2. Ireland: 130,000

   3. Burundi: 293

3. Adult literacy

   1. Hungary: 99%

   2. Italy 99%

   3. Chad 22%

what is development aid?

= aid by wealthier countries to less developed countries, typically project or sector specific

either bilaterial or multilateral

when did development aid begin and what is UN target for aid?

began post WWII

• partly due to increase in new states

• awareness and research of development

• domestic institutions and remnants of colonialism impacted nations

• often benefits the benefactor more than the beneficiary

UN target = 0.7% of GDP

• most developed countries don't meet this target

• Ireland spends around 0.55% of national income on overseas assistance

what is WTO and when was it founded?

= organization aiming to reduce barriers to free exchange of goods and service + to reduce barriers to global competition

• based on GATT founded in 1947

• currently has 166 members and based in Geneva

what does the WTO do?

• arbitrates on trade disputes between members

• can impose sanctions on offending countries

• includes most goods and services in its work but excludes/partially excludes sectors like culture, agriculture, and defense

What were the Bretton Woods institutions, when were they established, what was the aim of creating them?

• established 1944 to bring stability to post-war order

• economic issues now seen as a world issue with consequences important enough to spark new transnational organizations

• propelled by decolonization and fear of returned rise of fascism

• IMF and World Bank

what is the IMF and what are its key functions/policies

• 191 members

• aim to help countries overcome short term balance of payments and exchange rate difficulties through loans

• shareholder model – the more you pay, the more power you have

• policy: conditionality agreements

  • govts had to carry out strict reforms to qualify for loans (Washington consensus) often leading to heavy cuts in social spending

  • mostly gives money to developing countries but also helped Ireland, e.g. through Troika

what is the world bank and what are its key functions/policies

• 189 members

• aim to promote economic development through various kinds of longer-term loans to both govt and private sector

• provide investment guarantees

• similar shareholder model as IMF

• developed following criticism for not being gender sensitive & conscious of reforming govts with a history of corruption

4 arguments in favor of GEIs (global economic institutions)

1. help integrate countries into the global capitalist system to promote development (Singapore, South korea, Taiwan, Chile, Ireland)

2. foster good domestic governance and accountability

3. institutionalized trade rules benefit weaker states above all – promote right instead of might

4. social and environmental issues were historically neglected but they have become higher on the agenda

5 arguments against GEIs (global economic institutions)

• help maintain the global capitalist system – enshrines inequality and benefits rich states and MNCs

• economic prescriptions often harm the poorest in society

• economic model they promote is often applied indiscriminately, even when it is not applicable

• impinge on national sovereignty

• undemocratic – rich countries have the most influence