PS 282: GOVERNING GLOBALIZATION

EXAM 2 STUDY GUIDE

This guide will help you prepare for Exam 2. The list is not exhaustive of all the topics we have covered in class. Feel free to add your own questions and answers as you study for the exam.

Week 8: The economic regime

1. Which are the three competing approaches in modern international political economy?

Liberalism/neoliberalism, Mercantilism, and Marxist perspective

1. What are the key concepts and ideas of each approach?

Liberalism:

Automatic mechanism for production and distribution of resources

“Invisible hand” of the economy

Mercantilism: government

Government should be the main actors in the international economy

Government support for national economy is important

Marxist perspective: social class

Unequal distribution of capital between the “core” and the “periphery

Resources form the periphery enrich the core

1. What are the policy recommendations derived from each approach?

Liberalism: Privatization, liberalization, and limited regulation

Mercantilism: Trade protectionism (tariffs, quotas, non-tariff barriers) and international regulation

Marxist perspective: Better terms of trade required for periphery countries

1. What is the relationship between liberalism and neoliberalism?

Neoliberalism is a more extreme version of liberalism

Liberal economist: market is important, but sometimes we need intervention

Neo-liberalist: No, under any circumstance government should never intervene

1. What are the major economic crises of the last 100 years?

The great depression, 1929

Monetary crisis, 1971

Oil/energy crises (1973 & 1979)

The Asian financial crisis, 1997

The financial crisis of 2008 and the Eurozone crisis, 2010

The coronavirus crisis of 2020

1. What is the relationship between economic crises and the global finance regime?

Economic crises happen inevitably. The global finance regime exists to soften the blow of crises and help states get out of the crises.

1. What do we mean by the term “Washington consensus”?

Emphasis on neoliberalism by the Bretton Woods institutions and the US Treasury Department

Privatization, Liberalization, and limited role of government in economy

1. What is the purpose of the Bretton Woods regime? How has it evolved over time?

Original goals:

Rebuild European economies after WWI

Prevent a new “Great Depression” with closer cooperation

Present goal:

Manage stability of the global economy

1. Which are the organizations of the Bretton Woods regime?

The International Monetary Fund (IMF)

The World Bank (WB)

The World Trade Organization (WTO)

1. What are the main functions and features of each organization in the Bretton Woods regime?

IMF: Pressures for exchange rate manipulation

WB: Give low interest loans to governments of private entities for development projects

WTO: Setting rules of international trade

Features most-favored nation and trade dispute mechanism

1. What is the “most-favored nation” principle?

Each member-state must treat all other WTO member-states the same

Week 10: Focus on the IMF and the WTO

1. What are the main actors in the International Monetary Fund?

The executive board, the managing director, the United States and other major “stakeholders” (Japan, UK, Germany, France, Saudi Arabia, China) and all other member-states

1. What are IMF lending decisions about?

IMF Programs for countries in need of loans

Whether the country needs to get money and how much

1. Be familiar with the meaning of IMF decisions about general policy, institutional reform, and constitutional changes.

All member-states participate in these decisions

The amount of vote of the member depends on contribution of the funds (quota)

Although the US and major stakeholders have more votes, it is difficult that a single member can decide by itself

1. Which types of IMF decisions are primarily subject to formal rules and which to informal rules?

Formal rules: general policies, institutional reforms, constitutional changes

Informal rules: lending decisions

1. What is the role of the United States in lending decisions?

Lending decisions = informal governance

Informal governance administered mainly by the United States

1. What is the principle of “conditionality” and how was it adopted by the IMF?

2. Conditionality originally not in the IMF statute

3. The US (main lender in 1950s) could not push for a formal change in the statute

4. Then, Western European countries changed camps from borrowers to lenders

5. Consensus was built among the US and Western Europe for changing the IMF formal rules on conditionality

6. Today, conditionality is an important component of all IMF loans

7. Overall, which type of governance is more important in the IMF, formal or informal?

Overall, informal governance is more important than formal governance

In the WTO it is switched

1. Which are the main actors in the WTO? What type of power do they exercise, formal or informal?

The USA and the European Union: significant informal power in agreement negotiations and new member state accession

However, formal rules such as dispute settlement mechanisms and voting rules on new members restrict their power

1. What is the dispute settlement mechanism in the WTO? What is its purpose? What formal what informal rules does it involve?

Member-states initiate a complaint – dispute panel is assembled – panel rules on the case – the complainant is given permission to retaliate against the respondent

Formal rules: few opportunities for big actors to exercise their power

Informal rules: it is hard for small countries to retaliate against big actors

1. How is the process for trade negotiations conducted in the WTO? What formal and informal rules does this process entail?

Informal rules: the USA and the EU determine negotiation outcome

Market power

Formal rules: all countries must sign new trade agreement

1. What is the process of accession of new members in the WTO? What are the formal and informal rules that apply to this process?

Formal rules: two-thrids vote of membership required

Informal rules:

Consensus rule, all existing member-states must approve new accession

The leading exporter of a product spearheads negotiations for that product (EU and US)

Non-trade issues cannot be evoked during accession negotiations, except by the US and the EU

1. Overall, which type of governance is more important in the WTO, formal or informal?

Overall, formal governance is more important than informal governance

Week 11: Critiques of the economic regime and the new rise of protectionism

1. In Thomas Friedman’s “The Lexus and the Olive Tree,” what do the “Lexus” and the “olive tree” symbolize?

Lexus: symbol of progress, competitiveness and market power

Olive Tree: symbol of tradition, identity, roots, sense of belonging to a distinct culture

1. What is Friedman’s main argument in “The Lexus and the Olive Tree”?

Societies need to strike a balance between progress and tradition

Need for global market integration to reap benefits of globalization

But also need to maintain their distinct identity in globalized economy that tend to homogenize

1. According to Joseph Stiglitz’s “Globalization and Its Discontents Revisited,” what explains opposition to globalization in the developing and in the industrialized world?

Stiglitz: critical about the BWI, but not critical about globalization

Disconnect between policy intentions of Bretton Woods institution and policy outcomes

1. Who are the winners and who are the losers of globalization in the developed and in the developing world?

Winners: economic elites in industrialized countries

Losers: economic elites in developing countries, the labor force in developing and developed countries

1. According to Stiglitz, which government officials from influential countries have the most impact in the IMF and the World Bank? What is the implication of this for IMF and WB decisions?

Finance ministers and central bank governors

Implication:

Decisions skewed in business and financial industries’ favor

Labor and consumer concerns in the backseat

1. According to Stiglitz, what is the main economic philosophy behind IMF and the WB decisions?

Sharp ideological shifts in IMF and WB toward neoliberalism

1. What is the impact of this philosophy on countries affected by IMF and WB policies?

Many industries and national markets are forced to open to global competition too soon

1. What are the goals of the Inflation Reduction Act and the CHIPS Act and how do they aim to achieve these goals, according to Kamin and Keysar?

Inflation Reduction Act (IRA): support for clean energy and green technologies over 10 years

CHIPS Act: building microchip manufacturing facilities (“fabs”)

1. Which political economy approach are these two Acts compatible with among the ones we discussed during week 8 (see week 8, question 1)?

Mercantilism (IRA “$400 billion in government support” and CHIPS “$60 billion in subsidies”)

1. What are the potential pitfalls of these Acts and how can they be avoided, according to Kamin and Keysar?

Subsidy war:

Economic costs: it may be more expensive to produce the new technologies in the US

Diplomatic costs: allies less willing to work with the US on a range of international policies

Stronger US coordination with allies, targeted subsidies

1. What is Georgieva’s prediction about the future of globalization?

The era of globalization is ending

Global supply chains and global market competition are being restricted

Global economy is being fragmented into rival economic blocks

1. How will this future affect the well-being of developing countries?

Fragmentation reduces the opportunities for economic growth AND it makes more difficult for countries to deal with economic shocks

1. What can be done, according to Georgieva, to avoid the negative consequences of this new era of globalization on developing countries?

Creditor countries (the US and China) and global financial institutions need to collaborate more

IMF reform – members quotas need to be reviewed

Better representation of IMF members in decision making

Better IMF coordination in other financial institutions (WB, AfDB, etc.)

Week 12: The economic development regime

1. What are the causes of global poverty according to the orthodox/neoliberal approach and the critical/alternative approach?

1. What are the appropriate development policies that can reduce global poverty according to the orthodox/neoliberal approach and the critical/alternative approach?

1. What are the causes of global hunger for the orthodox/neoliberal approach and the critical/alternative approach?

1. What are the solutions for global hunger for the orthodox/neoliberal and the critical/alternative approach?

1. What was the purpose of the Millennium Development Goals?

Set concrete, quantifiable development targets

1. What is the Sustainable Development Agenda, and what is its relationship with the Millennium Development Goals?

Sustainable Development Agenda (SDGs): 17 goals, adopted in 2015, to be attained by 2030

It is inspired by MDGs

1. According to Milanovic, what are the main global trends in prosperity among nations at global level? Is there a convergence or divergence?

Global inequality increased from the industrial revolution to the Cold War

But started decreasing significantly with the end of the Cold War

1. And what are the main trends in prosperity among citizens inside industrialized and developing nations? Is there a convergence or divergence?

Economic inequality has been increasing in many countries

1. Which groups of people have become better off and which worse off because of globalization in industrialized and developing nations?

The lowest income earners in global south become more affluent

The lowest income earners in global north become less affluent

Highest income earners in global south become more affluent

The highest income earners in global north continue to be as affluent as they used to be

1. How does Ibrahim explain the persistent economic underdevelopment of Africa? What are the main factors that have contributed to it?

The colonial legacy holds Africa back

Arbitrary national borders

Extractive colonial economic architecture projects

Hierarchical political cultures designed by colonial powers persist

1. What does Ibrahim argue could be done to lead Africa to a more prosperous future?

More economic integration (increase trade among African countries)

1. What does Ibrahim think the role of African people and Western countries and institutions in those efforts should be?

Africa needs more representation and voice in global institutions

Western countries need to support Africa to fight with the effects of climate change

International Rating Agencies need to reassess African countries’ creditworthiness

Week 13: The environmental regime

1. What types of environmental regimes are there?

Global type many countries, broad issues

Restricted type: few countries, narrow issues

1. What are some examples of different types of international environmental regimes?

UN framework Convention on Climate Change

The Earth Summit (Rio de Janeiro, 1992)

World Summit on Sustainable Development (Johannesburg, 2002)

The Kyoto Protocol (Kyoto, 1997)

Paris Agreement (Paris, 2016)

1. What is the role of science in environmental regimes?

All the norms and rules in environmental regimes are based on science (unlike the human rights regime, which is dominated by values)

1. What is “sustainable development”?

Development that meets the need of the present without compromising the ability of future generations to meet their own needs (Brundtland Commission, 1987)

1. What are some examples of sustainable development?

Using wind and solar power instead of fossil fuels

Using technology that does not pollute rivers and lakes

Preventing deforestation

Treatment of urban and industrial waste

1. What is the controversy over Genetically Modified Organisms (GMOs)?

Confrontation between the US and the European Union

In the US, using GMOs are not a taboo.

In the EU, GMOs are not welcomed

EU “we are not going to import GMOs” vs. US “That is non-tariff barrier”

1. What is the “precautionary principle” and what is its role for the international GMO regime?

In the absence of conclusive scientific evidence that a substance is harmful

Then, it is up to individual governments to decide whether they will allow the use of that substance or not

1. What is the controversy over climate change? What are the opposing views?

debate on causes:

result of human action, increase of carbon emissions

vs. regular change in temperature patterns

1. Which international agreements constitute the foundation of the global climate change regime?

1992: the United Nations framework Convention on Climate Change (UNFCCC)

1. What are the main provisions of the recent Paris Agreement of Climate Change?

Goal: keep global average temperature to 2°C above pre-industrial levels (perhaps even to 1.5°C)

Pledges by both developing and industrialized countries, but industrialized countries have more ambitious pledges than developing countries

1. What were the new geopolitical alliances that made the Paris Agreement on climate change possible, according to Nick Mabey?

Ambitious coalition (industrialized and developing countries): EU, US, SIDS group, CVF group, Brazil

Equity coalition (only developing countries): India, China, LDC group, Africa group

1. Which issues brought the members of each alliance together?

Ambitious coalition: ambitious temperature target

Equity coalition: equity and differentiation

1. How do these new alliances differ from past alliances?

Past alliances:

Industrialized countries (the EU and the US) vs. Developing countries (China and India)

New alliances:

Ambitious coalition vs. Equity Coalition

This is an important change that makes the Paris Agreement possible

1. What is the connection between the use of coal as an energy source and the success of the Paris agreement, according to the article by Boersma and VanDeveer?

If the Paris Agreement is to succeed, affordable alternatives to coal need to be found

Week 14: The security regime

1. What are the main goals of the United Nations, as outlined in its Charter?

Maintain peace and security

Develop friendly relations among nations

Promote cooperation among nations for solving problems

Be a center for harmonizing the actions of nations

1. Which are the organizations in the UN system that work to promote traditional security?

UN Security Council (UNSC), UN General Assembly (UNGA), UN Secretariat, International Court of Justice (ICJ)

1. What are the main tasks of those organizations?

UNSC: principal body of traditional security, only UN body that can authorize sanctions and use of force

UNGA: Issue non-binding resolutions, highly symbolic role

UN Secretariat: bureaucratic function, mediating disputes

International Court of Justice: adjudicating disputes between states only

1. What is the principle of collective security?

Respect for national sovereignty

When a nation-state’s security is compromised, other nations need to come to its aid

1. What are the UN activities for maintaining traditional security?

Peaceful means:

Preventive diplomacy, peacemaking, peacekeeping, post-conflict peacebuilding

Peace enforcement:

Economic sanctions, military intervention

1. Which are the organizations in the UN system that work on improving the economic and social conditions that contribute to security?

Commission on the Status of Women, Commission on Narcotic Drugs, Permanent forum on Indigenous Rights, Economic Commissions for regions (Africa, Europe, Latin America and the Caribbean, Asia and Pacific, Western Asia), FAO, WHO, ILO, WB, IMF

1. What are the UN activities those organizations are involved in?

Authorizes and supervises various social and economic committees

Receives reports on social and economic issues of global concern

Specialized function

1. What UN reforms have been proposed?

Traditional security:

Add new permanent members to Security Council

Responsibility to Protect

Economic and social foundations of security:

Better implementation of UN programs on the ground to fit the needs of specific countries

1. How does David Miliband explain the gap of support for Ukraine between the countries of the Global North and the countries of the Global South?

Deep distrust of Western countries by the Global South countries:

Western countries seen as hypocritical

Lack of support to the Global South countries

1. What recommendations does Miliband make to close this gap?

The Western countries needs to provide more support to developing countries for climate change and refugee support

Give developing countries more say in international governance, especially in UNSC

1. How do Ero and Mutiga explain the paradox that many people in some African countries support both military coups and democracy?

People in Africa are disappointed with the current leaders, and they want changes

Often elections are rigged, leaders revise constitutional term limits or distribute economic benefits unequally

Coup leaders promise change

Paradoxically, people hope that coups will restore democracy

1. What historical developments have led to the popularity of military coups among the people of those African countries, according to Ero and Mutiga?

Two cataclysmic events:

2008 global economic crisis: commodity prices plunged, and GDP dwindled

2011 NATO operation in Libya, collapse of the Libyan State and flooding of weapons in the Sahel

1. What can the rest of the word, especially Western industrialized countries, do to reduce African popular support for military coups, according to Ero and Mutiga?

Western capitals need to adopt a more nuanced approach to the coups

Hardline condemnation is counterproductive; engagement with coup leaders may be a good idea

Fundamental socio

Week 15: The human rights regime

1. What is the liberal conception of human rights? What are its two main principles?

All human beings (individuals) possess (a) inalienable and (b) unconditional rights

1. What is the natural rights tradition, and how does it relate to the liberal conception of human rights?

Natural rights: rights not limited to specific nation, state, religion, race, community, or civilization

1. What is the charter rights tradition, and how does it relate to the liberal conception of human rights?

Charter rights: Result of bargain between government and individuals

1. What is the nature of modern human rights? (What are their main features?)

Universal, Individual, and protected by contract

1. What are the main global human rights conventions and agreements?

The Universal Declaration of Human Rights

International Covenant on Civil and Political Rights

International Covenant on Economic, Social and Cultural Rights

The Vienna Declaration and Program of Action

1. What is the history and content of the Universal Declaration of Human Rights? How is enforced?

UN General Assembly, 1948

Divided into two main categories:

Civil and political rights

Social and economic rights

Non-binding

1. What are the three generations of human rights?

First generation

Second generation

Third generation

1. What type of rights does each generation of human rights entail?

1. Which generations of rights were included in the Universal Declaration of Human Rights?

The third-generation rights are not included in the Universal Declaration

1. What is the difference between positive and negative rights?

1. What is cultural relativism and how does it challenge the liberal conception of human rights?

Cultural relativism: challenges universality of human rights

Liberal conception of human rights: emphasis on democracy and individual

1. What is the concept of “human security” and what are its main components?

Human security: protection for security of the individual

Main components: economic, Food, Health, Environmental, Personal, Community, and Political security

1. How is human security different from national security?

Human security: individual as main subject of security, not the nation state

1. What are the implications of the concept of human security for national sovereignty?

Restrictions to national sovereignty: responsibility of international community to intervene in a country’s affairs when human rights are being abused

1. What is “responsibility to protect”?

Duty of international community to react to situations in which there is compelling need for human protection

1. Under what conditions can the principle of “responsibility to protect” lead to military action?

Just cause: Large scale loss of life or ethnic cleansing

Right intention: primary purpose of intervention must be to halt human suffering

Last resort: every non-military option has been explored and expected to fail

Proportional means: scale of action commensurate with magnitude of original provocation

Reasonable prospects: reasonable chance of success

1. Which actors can provide legitimate authorization for military action under “responsibility to protect”?

Decision to intervention must be legitimized by the (a) UN Security Council (UNSC) or (b) UN General Assembly (UNGA)