unit 5 ap comp gov flashcards

Economic globalization

The increased interconnectedness of people, states, and economies including the flow of economic activity, technology, and communications around the world

International Monetary Fund (IMF)

An international organization that provides financial assistance and policy advice to member countries facing economic crises; in exchange for loans it requires structural adjustment programs including privatization, tariff reduction, and austerity measures

World Bank

An international financial institution that provides loans and grants to developing countries for capital projects aimed at reducing poverty and promoting economic development

World Trade Organization (WTO)

A supranational organization that facilitates global trade through regulatory agreements, resolves trade disputes, and works to reduce tariffs and trade barriers among member nations; successor to GATT

Multinational corporations (MNCs)

A company with facilities or assets in more than one country

Neoliberalism (neoliberal economic policies)

A market-oriented ideology associated with free trade, privatization of state industries, deregulation, reduced government spending, and economic liberalization; often promoted by the IMF and World Bank as conditions for loans

Special economic zones (SEZs)

A strategically located area in China with a large labor pool, well-developed infrastructure, and tax incentives to attract foreign companies

Privatization (M)

When a government transfers ownership and control of a nationalized industry to the private sector

PEMEX (M)

The company that oversaw all of Mexico's oil production (nationalized in 1938)

Nigerian National Petroleum Corporation (NNPC) (N)

Forms joint investments with foreign companies to extract and produce oil

Re-nationalization (R)

The process of transferring privately owned assets or industries back into the control of the government; Russia re-nationalized its oil and gas industries under Putin to increase state revenue and reduce foreign influence

Foreign direct investment (FDI)

The creation of or investment in a business in one country by an entity from another country

Environmental degradation

The deterioration of the natural environment through pollution, resource depletion, and industrial damage caused by rapid industrialization and globalization; often worsened by the race to the bottom as MNCs move to countries with weaker environmental standards

United Nations

An international organization founded in 1945 to promote peace, security, and cooperation among nations; the five permanent Security Council members (U.S., UK, France, Russia, China) each hold veto power

Economic liberalization

Economic policies that support the free market and reduce trade barriers

Trade deficit

An imbalance in international trade in which the value of a country's imports exceeds the value of its exports

Urban sprawl

The uncontrolled expansion of urban areas driven by rapid industrialization, rural-to-urban migration, and lack of government regulation; contributes to environmental degradation and uneven economic development

Structural adjustment program

Requirements for receiving assistance from international lenders (such as the IMF) including the privatization of state-owned companies, reducing tariffs, and reducing subsidies for domestic industries

Import substitution industrialization (ISI)

Enacting high tariffs and providing incentives to encourage the growth of domestic manufacturing aimed at reducing dependence on other countries

Supranational organizations

Organizations in which member states grant the governing body sovereignty over certain policies (typically related to trade); members cede some sovereignty to a higher authority that can set binding rules; examples include the EU, ECOWAS, and WTO

Economic Community of West African States (ECOWAS) (N)

A regional supranational organization of West African nations whose goal is to achieve collective self-sufficiency by creating a single trade bloc, promoting economic integration, and raising living standards; Nigeria is a major leader within it

European Union (EU) (UK)

A supranational organization of European countries that promotes economic and political integration; members pool sovereignty and are subject to EU law and the European Court of Justice; the UK left via Brexit

Austerity measures

Policies implemented by governments to reduce spending, increase taxes, and cut public services in order to address budget deficits or economic crises; often required by the IMF as part of structural adjustment programs

North American Free Trade Agreement (NAFTA) (M)

Eliminated most trade barriers between the United States, Mexico, and Canada; replaced by the USMCA in 2018

Maquiladora zones (M)

Manufacturing plants set up just south of the U.S.-Mexico border to take advantage of inexpensive labor and then export their goods to the United States tariff free

Rentier states (I N R)

A state that relies on the export of oil or from the leasing of resources to foreign entities as a significant source of government revenue

Resource curse

A problem faced by countries that have a valuable and abundant natural resource which limits diversification of the economy, makes government revenue dependent on the world market, increases opportunities for corruption, and lessens the government's responsiveness to citizens

Inflation

the general increase in prices for goods and services over time, which reduces the purchasing power of money