Globalization
Development driven by transnational corperations
World Trade Organization (WTO
Facilitate intergovernmental agreements -agree to by countries -government gives up agreement rights to reach agreement Free-er Trade -Less regulation -laissefair -neo-regulated markets
Comparative Advantage
David Riccardo
Specialize in thing that they do best (Better/Cheeper)
Import what you cannot do well
General Council
WTO members
164
agree on rules of WTO
Secratariot
200 people who decide all the rules
Director General
Robert Azevedo
4 Principles of Operation (WTO)
Tariffs- protect economy through tariffs, not limitations
Reciprocity- I scratch your back, you scratch mine
Non-Discrimination- All rules apply to all members
Negotiations- All agree to periodic negotiations
Generalized System of Preferences
promotes exports from poor countries to rich
Dispute Settlement Mechanism
One country believes another is breaking WTO rule
Trade Tribunal- sets out timeline and resolution mechanism
Panel- appointed to come up with solution through arbitration. Secret meetings between 3 members
2008
World Trade Fell
Tarrifs rose massively
Doha Development
2001 most ambitious world trade proposal ever comparative advantage benefits rich (No agreement has been made yet)
Uruguay Trials
1984
Changed Africa from large food exporter to large importer
Africans lost their jobs
Bilateral Trade Agreement
2 countries agree to trade together
Regional Trade Agreement
regions that agree to trade together
NAFTA (North American Free Trade Agreement)
Tarrifs are slowly eliminated
manufacturing moves to mexico
Sunset Clause- Can pull out of NAFTA at any time
World Population
Generally unchanged until 1800s then skyrocketed after reaching 1 billion
What Causes Population Growth?
When birth rates are higher death rates.
Birth rates and death rates a going down.
In developed countries: birth rates going down faster than death
Undeveloped: death rates are going down faster
“Population Growth Momentum”
Population Rate Suprieses
-Speed of population growth going down
Reasons Why People are not Dying
Better Health Care (HIV, AIDs help)
Infant Mortality decreasing
The Fertility Rate
Number of live births between ages of 15 and 34
Replacement rates: 2.1 that holds population stable
Population Density
Number of people in a square kilometer
China and Population
1 child policy used to be 1.6 Fertility rate
Rapid decline in population was bad for country, so they stopped enforcing it.
Thomas Malfus
Population grows exponentially ^2 Food grows additionally 1+1+1+1 This will cause us not to have enough food eventually "Food Availability Decline." -Must control population grow -Excessive population ruins environment.
Problems in poplation
- Old people are going to 1/5 of population
- Preference to sons (aborting baby girls) and having more men than women
- Sub Saharan Africa population is going to rise from 1 billion to 3.6 billion (Poverty)
Carrying Compacity
There is only so much the world can give.
But there is no exact number (Very disputed)
4 Population Myths
- World is overpopulated
- Rapid population growth keeps poor countries poor
- China 1 child policy is good for economy
- If population declines, economy declines
The Rise of Urbanisiation
- People moving out of countryside and into cities
- We live a world of megacities (Very populated)
- People who move inwards, do not have city skills, and quality life declines
- They move out of necessity (Agro-business forcing them out)
- Mike Davis: “A planet of slums”
Rural Urban Migration
- Daily occurrence
- loosening of colonial power (Rules loosened)
- conflict moves people into urban areas
- High open unemployment
- high underemployment (Short jobs)
- High informal employment (Under the table)
International Migration
-People moving around the world
-Former colonies generally move to colonial powers
Migration
-Poor to rich countries
-Between developing countries
-Rich to poor
-For cost efficency
Brain Drain (Skilled people moving for better work)
Remitances
Money immigrants send back to their families in home countries.
General Agreement on Tariffs and Trade (GATT)
Eliminate all tariff and non tariff barriers to trade
General Agreement on Trade in Service (GATS)
Less Regulation on:
- Health Care
- Education
- General Trades
Trade Related Intellectual Property Rights (TRIPs)
Trade marks
Cannot reverse engineer and reproduce pharmaceuticals
Evidence of Climate Change
- Trend increase of global temperature
- More CO2
Implications of Polar Temperature Rising
Ice melts (More heat is retained)
Warmer seas feed storms
Frozen ground thaws (and releases methane)
Theories on our Relationship With Nature
Fatalists-We Cannot Change Nature (its fate)
Entrepreneurial Expansionist-Nature Can Take What We Give it
Hierarchist-Nature Can Take What We Give (To A Point)
Communal-Nature is Fragile
Rich vs Poor Climate Change
Poor are more susceptible to effects of climate change
Developed countries screw over poor countries
Richest 10% of population do 1/2 of CO2 emission
Global Human Inequality and Climate
Developed World -emission -agro-companies -chemical companies -energy demand Undeveloped World -High birth rates=need for rapid expansion
Overconsumption
Transportation -Container ships, airplanes Deforestation -killing the lungs of the planet Agriculture, Mining Sand -becoming scarce -dredging rivers and seas (destroying habitat) Water Availibility Fish -overfishing -global warming forces environment change Species Extinction
Conference of the Parties (COP)
Climate change section of the UN
Focuses on 2 problems
-Adaptation (of developing countries)
-Mitigation (of developed countries)
6 Approaches to Global Environmental Government
Scarcity (Levels of human consumption must be cut) Liberal Market (The Market will solve the problem) Environmental Economics (Put a price on recources) Ecologic Economics (Thermodynamics- we cannot restore the planet) Ecological Modernization (Green Markets)
Bruntland Report
1987
Sustainable development
Maintain development without jeopardizing future generations
Cap and Trade
set emissions limits on companies that they can trade for a profit
Carbon Tax
government charges companies for their emissions
Paris Agreement
2015 Keyisto Protical 187 Countries Agreed: -not to increase temp by 2 degrees Pledges made by countries are not good enough
Sustainable Development
Develop the current system to sustain future needs
Absolute Poverty
a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information
Amartya Sen
Indian Economist who’s book was about:
- political freedoms
- freedom of opportunity
- economic protection from abject poverty
Authoritarianism
enforcement of strict obedience at expense of person freedom
Bureaucracy
a system where decisions are made by stat officials, more than elected officials
Structural Adjustment Policy
Policy Based Loans
Very specific and unattainable rules
Poverty Reduction Strategy Papers
Replaced SAP’s
Boost Supply
Cut Demand
Neo-Liberalism
Small Efficient State
Enabled Markets
Provides what markets will not
(Promoted by IMF and World Bank)
Transnational Corporation
Investing outside of of country
lower unit labor cost=production/wadges
Dependency Theory
Unequal exchange: rich suck the resources out of the poor
Modernization Theory
Traditional to Modern
Linear
Social evolution
NO CAPITALISM
Structuralism
Fitting into the world economy
Human Development Index
-Life Expectancy
-Education
-Economic Growth
(Must choose to emphasis one but cannot do all)
Import Substitution Industrialization
Many internal trade, less import, more exports
After GD, Latin America 95% of goods locally
Comparative Advantage
David Recardo
Countries specialize in cost effective goods
Imperialism
Dominance of a territory without actual control
Neo-Colonialism
Reliance of colonial state on old colonial power (Politically, Economically, Socially)
Charitable Inpulse
Impulse to give aid
Private Aid
Private organizations providing aid
Aid vs Charity
- Singular aim of framework at its inception
- Size of resources and organizations
- Aid is political
What is Aid
Transfer of resources
Concessional terms-softer terms given on loans
Grants or Concessional Loans
Must be:
-From official organizations
-Be 25% a grant
-Must be for economic and welfare development
Development Assistance Committee (DAC)
Representatives of a ‘rich’ club that set outs rules
Official Development Finance
A form of loan that is given, but is not aid because it is given at full market value
Official Development Assistance
A form of loan/grant that is given to a country, but 1/4 of the money has to be a grant (For developing countries)
Official Aid
A form of loan/grant that is given to a country, but 1/4 of the money has to be a grant (For middle income countries)
Refugees and Aid
Taking in refugees now counts as aid
Architecture of Aid
Multilateral Agencies (WTO, IMF, ect) Bilateral Agencies (Facilitate Things between close governments) Non-Governmental Organization
Types of Aid
Project Aid Program Aid Technical Assistance Humanitarian Aid Military Aid
6 Key Characteristics of Aid
Multilateral Organization have bulk of personnel and money Bilateral political interconnections Conditionality Good Aid Should -improve lives of people -coordinated across agancies -Be transparent -flow through governments Enforce Neo-Liberal appraoch
Current Aid
- Aid has gone up
- China and Brazil are one of many new donors
- Cash on delivery (Get paid when you do something good)
- Randomized experiments (Form of evaluating where you compare two countries)
- The geography of poverty has changed (A lot within developed countries)
- The private sector delivers public sector aid
- Aid does not go to the poorest people.
Sustainable Development Goals
To Be Achieved by 2030
- poverty reduction
- ect