AP Comp Gov Unit 3 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

Multinational corporations (MNCs) - businesses with a large presence in countries in different regions of the world; MNCs increasingly dominate global markets and pose challenges to, and sometimes conflict with, domestic economic policies regarding labor, the environment, land rights, taxation, and the budget

Special economic zones - areas in China (particularly its east coast) designated by the government as regions where private businesses could attract foreign direct investment

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

Nationalization - government-owned industries run 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 government’s foundational economic and political ideas and principles

Environmental degradation - environmental problems created by industrialization and other forms of economic development

International organizations - organizations joined by member states with a common interest (ex. the International Monetary Fund (IMF), the World Bank, and the United Nations)

International Monetary Fund (IMF) - exerts great influence through preconditions for financial assistance; 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 (ex. the Economic Community of West African States (ECOWAS), the European Union (EU), and the World Trade Organization (WTO))

Tariffs - taxes imposed by a government against imported goods

Subsidies - government funding made to support domestic industries against foreign competition or to shape economic behaviors

Import substitution industrialization (ISI) - policies aimed at reducing foreign dependency by raising tariffs and encouraging local production of industrialized products

Austerity measures - funding cuts to state programs 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 - areas of Mexico’s manufacturing industry (mostly located in northern Mexico); factories established to assemble parts imported from the United States for assembly in Mexico made more possible due to NAFTA; contributed to greater economic development in the north than in the south, as well as other regional disparities

Rentier states - countries that obtain a sizable percentage of total government revenue from the export of oil and gas or from leasing the resource to foreign countries and have been able to raise standards of living and fund governmental programs based on their huge reserves

Resource curse - countries that rely too heavily on the export of commodities face negative economic, political, and environmental consequences

Economic diversification - when a country is able to obtain economic balance between agriculture, manufacturing, and service without overdependence on one commodity or economic sector