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Politics: Global Politics > global governance - economic > Flashcards

global governance - economic Flashcards

1
Q

When was the Bretten Woods Conference?

A

1944 in the US (New Hampshire)

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2
Q

Why did the Bretten Woods Conference occur?

A

to consider how the world’s financial systems and trade could be managed in peacetime

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3
Q

What were the main aims of the Bretten Woods Conference?

A
  • to create an agreed system of rules for international economic matters
  • stabilise world currencies, reduce wide fluctuations
  • prevent a repeat of the Great Depression
  • bolster capitalism against the rise of communism
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4
Q

What economic global governance IGOs did the Bretten Woods Conference create?

A
  • The IMF
  • The International Bank for Reconstruction and Development (World Bank)
  • The General Agreement on Tariffs and Trade (World Trade Organisation)
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5
Q

What does global cooperation on economic governance focus on now?

A
  • poverty/development
  • free trade
  • single currency
  • forums
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6
Q

What are the main actors in economic global governance?

A
  • IGOs
  • Informal intergovernmental forums (G7/G20)
  • Multinational cooperations (MNCs)
  • Multilateral forums (WEF)
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7
Q

What is the main role of the IMF when it was founded?

A
  • encourage stability in world exchange rates
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8
Q

What was the fixed exchange rates system?

A
  • linked to the US dollar and then gold
  • states and traders in the international financial system knew how much currency was worth and could make investments with a greater stability
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9
Q

When and why did the fixed exchange rate system break apart?

A

1971 because US president Richard Nixon abandoned the fixed link between the value of the US dollar and gold

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10
Q

What has been the role of the IMF since the 1970s?

A
  • provides economic stability (financial support or loans to suffering states)
  • monitors the economic outlook of both the world economy and individual member countries
  • advises member countries on how best to manage their economies
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11
Q

What are the top three main functions of the IMF?

A
  • surveillance and monitoring
  • lending
  • capacity building
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12
Q

How many members does the IMF have?

A

190

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13
Q

Who is the managing director of the IMF?

A

since 2019 - Kristalina Georgieva (Hungary)

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14
Q

What is the main source of the IMF’s financial resources?

A

payments made to it by member countries

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15
Q

Why has the IMF been criticised for being undemocratic?

A

its voting power is weighted according to how much states contribute financially -> the most economically powerful states are allocated more power over decision making

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16
Q

In 2020 how much did the IMF lend to 83 countries?

A

$165 billion

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17
Q

In 2020 how much did the IMF lend to low income countries?

A

$16 billion

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18
Q

In 2020 where did majority of IMF loans go to?

A

the Western hemisphere (Chile,Colombia,Mexico)

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19
Q

In 2020 who was the largest contributor to the IMF?

A

The US = 17% of member states contributions

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20
Q

What are the two key aims of the IMF?

A
  • to try to keep afloat the economies that are suffering the most/ prevent them from collapsing or getting into so much debt they can’t pay it back
  • prevent a financial crisis from spreading to other countries
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21
Q

What are the three major financial crisis the IMF has assisted on?

A
  • The Asian financial crisis (1997)
  • Emergency lending to Brazil (1998) and Argentina (2000)
  • The Eurozone crisis (from 2008 onwards)
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22
Q

What must a state do to receive an IMF loan and what are they called?

A

undergo economic reforms to overcome the problems that led to it to request help in the first place -> called Structural Adjustment Programmes (SAP)?

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23
Q

What may an SAP include?

A
  • cutting public spending and raising taxes
  • selling government-owned assets to private ownership
  • increasing the amount of taxes that the state collects
  • reducing public sector wages/ state pensions
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24
Q

What did the government in Argentina set out to do in 2019 in order to receive an IMF loan?

A

increase taxes on wealth and create a new independent body to review the governments budget and make forecasts

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25
Q

Why may making loans conditional and demanding SAP be criticised?

A

they are excessive demands which infringe on state sovereignty

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26
Q

What are some specific criticisms of SAPs?

A
  • economic reforms (privatisation) see and increase in corporate profit which isn’t shared with wider society
  • tax rises can sometimes hit the poorest the hardes
  • most of the poorest work in the informal sector which means reform of the formal sector has little impact on them
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27
Q

What was the founding objective of the World Bank?

A

source of loans for reconstruction and development projects in countries lacking financial capital

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28
Q

What did the World Bank work on after WW2?

A

rebuilding key infrastructure e.g. roads and electricity

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29
Q

What are the two key institutions within the World Bank?

A
  • The International Bank for Reconstruction and Development
  • The International Development Association
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30
Q

What is the International Bank for Reconstruction and Development?

A

responsible for providing loans to help meet middle-income countries development needs

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31
Q

What is an example of the International Bank for Reconstruction and Development providing loans?

A

to the State Bank of India, $700 million to develop solar energy projects

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32
Q

What is the International Development Association?

A

provides loans to the poorest countries, loans tend to have very low interest rates and sometimes no interest at all

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33
Q

What does the World Bank predominately work on now?

A

its projects work in support of the wider UN human and sustainable development agenda, focuses on medium to long term projects rather than emergency assistance

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34
Q

How much does the World Bank deploy in financial assistance every year?

A

$50 billion

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35
Q

How many projects has the World Bank supported worldwide since its founding?

A

over 12,000 projects

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36
Q

What is the overarching goal of the World Bank?

A

to end poverty within a generation and boost shared prosperity

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37
Q

What does World Bank technical assistance focus on?

A

human and social development

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38
Q

What project did the World Bank carry out in India?

A

Water and Sanitation -> provided $3.4 billion to improve access to clean drinking water and sanitation, long-term project, since 2000 and is estimated to have helped 36 million people

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39
Q

What project did the World Bank carry out in Afghanistan?

A

Reconstruction of Afghanistan -> since 2002, invested over $4.7 billion for development and reconstruction of Afghanistan, mostly through grants and no-interest loans

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40
Q

How does the World Bank decide what decisions to make?

A

World Bank Executive Board agrees new loans, programmes, budgets and priorities -> decisions are then put to a member vote

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41
Q

How many World Bank member states are there?

A

189 member states

42
Q

How is World Bank voting power decided?

A

weighted according to the amount that states contribute

43
Q

Who carries the most voting power in the World Bank?

A

US carries 16%

44
Q

How has the US traditionally dominated the World Bank?

A

largest shareholder -> every president since its creation has been a US citizen and is nominated by the US

45
Q

Who is the current president of the World Bank?

A

Ajay Banga

46
Q

How has the World Bank been successful?

A
  • recognised as a base for the world’s foremost experts in development economies
  • acted as a source of finance to many states as they sought to develop e.g South Korea received nearly $15 billion and is now a leading donor to poorer states
  • moved away from conditional loans to grants and has become less demanding on economic reform
47
Q

How has the World Bank been unsuccessful?

A
  • competing development banks make the World Bank less powerful and create other less US-dominated sources of finance
  • criticised for SAPs that pushed a neo-liberal reform agenda to aggressively -> resulting ‘shock therapy’ in economies has been criticised as undemocratic and an attempt to impose a US-centric economic model on states too quickly and in the global interest opposed to the recipient states’ interest
48
Q

Why was the General Agreement on Tariffs and Trade created?

A

to reduce obstacles to international trade

49
Q

When was the General Agreement on Tariffs and Trade signed and by how many states?

A

1947 by 23 founding nations

50
Q

What was the aim of the General Agreement on Tariffs and Trade?

A

to agree a set of international trade rules where tariffs on goods would be reduced

51
Q

By 1995 how many states had signed the General Agreement on Tariffs and Trade?

A

over 100 states

52
Q

By 1995 how much did the reduced tariffs on goods set by the General Agreement on Tariffs and Trade amount to?

A

approximately $300 billion of world trade

53
Q

What is the WTO’s primary goal?

A

reduce barriers on trade in both goods and services

54
Q

What two things does reducing barriers on trade and goods and services include (WTO)?

A
  • reducing and removing tariffs imposed by states on imports from other states to agreed levels
  • quotas on the amount of imports of particular goods from other states
55
Q

How else can states reduce tariffs barriers?

A

states are free to enter into agreements with one or more other states

56
Q

What does the WTO offer?

A

the opportunity to put together extremely comprehensive trade agreements that will involve nearly all international trade

57
Q

What are the main functions of the WTO?

A
  • checks that states are following trade agreements
  • helps to resolve trade disputes between states
  • produces research on global trade and economic policy
58
Q

How many members does the WTO have?

A

164 member countries

59
Q

How much of world trade do WTO member states account to?

A

97% of world trade

60
Q

What states are currently applying to join the WTO?

A

Iraq, Libya, Somalia and Sudan

61
Q

Who is the most recent member of the WTO?

A

Afghanistan - joined in 2016

62
Q

What do EU members of the WTO have to do?

A

act together as a unified bloc of states

63
Q

What does membership of the WTO involve?

A
  • rights e.g. right to export to other countries
  • obligations e.g. need to limit tariffs on imports and to follow rules
64
Q

What is the highest decision-making body in the WTO?

A

Ministerial Conference

65
Q

How often do the Ministerial Conference (WTO) meet?

A

every 2 years

66
Q

How are decisions in the WTO made?

A

by consensus and are binding, so every member has to agree to a trade deal or there is no trade deal

67
Q

What does the need for consensus cause in the WTO?

A

makes decision making very slow

68
Q

What are the six key principles the WTO operates on?

A
  • non-discrimination
  • more open
  • predictable and transparent
  • more competitive
  • more benefits for less developed countries
  • protection of the environment
69
Q

What is ‘non-discrimination’ as a principle of the WTO?

A

states should treat trading partners equally and fairly

70
Q

What is ‘more open’ as a principle of the WTO?

A

commitment to free trade and to progressively lowering tariff and non-tariff barriers

71
Q

What is ‘predictable and transparent’ as a principle of the WTO?

A

states should not raise trade barriers without warning

72
Q

What is ‘more competitive’ as a principle of the WTO?

A

states should not interfere in order to give themselves an unfair competitive edge

73
Q

What are ‘more benefits for less developed countries’ as a principle of the WTO?

A

allows less developed countries to catch up and transition to becoming participants in international trade

74
Q

What is ‘protection of the environment’ as a principle of the WTO?

A

environmental protection must be respected both nationally and intentionally

75
Q

How many negotiating rounds have there been in the WTO?

A

nine

76
Q

When was the most recent negotiating round in the WTO?

A

2001 (Doha Round)

77
Q

What was the aim of the Doha Round?

A

improving developing countries access to global markets, mostly for agricultural products

78
Q

What did the Doha Round intend to do?

A

reduce global subsidies on exports that boost prices and domestic subsidies that go directly to farmers

79
Q

What was one of the specific proposals of the Doha Development Round?

A

reductions in government agricultural subsidies of up to 75% (EU) and 66% (US)

80
Q

Why has there been resistance from both developed and developing states?

A

developed = seeking to defend their interests
developing = rejecting compromises they judge to be against their interests

81
Q

What would critics say about the Doha Round?

A

powerful nations are blocking less developed nations and attempting to preserve the status quo for protectionist reasons

82
Q

What has happened to the WTO in recent decades?

A

gridlocked

83
Q

Why do states seek to agree trade deals outside of the WTO?

A

WTO can not make decisions quickly

84
Q

What happened to the Doha Round in 2015?

A

effectively abandoned without agreement

85
Q

What are the main problems of the WTO?

A
  • consensus decision making is slow
  • frequently sidelined by states forming their own agreements
  • economically powerful states hold considerable bargaining power over less powerful states
86
Q

What are the main successes of the WTO?

A
  • has reduced the cost of international trade by reducing tariffs
  • expanded a single set of trade rules to 164 member states
  • increased predictability and order in world trade
87
Q

When was the G7 founded and who by?

A

1975 - the six wealthiest worlds economies

88
Q

Who is currently part of the G7?

A

Canada, France, Germany, Italy, Japan, UK, US

89
Q

What happened with Russia and the G7?

A

Russia joined in 1998 but was suspended in 2014 after the annexation of Crimea

90
Q

What was always intended for the G7 membership?

A

made up of like-minded states sharing similar values and international outlook

91
Q

How did the Council of Foreign Relations describe the G7?

A

steering group for the West

92
Q

What does the G7 do in its annual meetings?

A

monitor and address developments in the world economy

93
Q

How are the G7 and G20 different to IGOs?

A
  • no formal rules
  • can invite any states, IGOs or NGOs to its meetings
  • can remove any members from meetings
  • no budget or formal secretariat
  • decisions are non-binding and rely on individuals will
  • no defined objectives
  • primarily a forum for world leaders to interact at an annual summit
94
Q

What were some of the agendas and outcomes at the 2021 G7 meeting?

A
  • covid-19 pandemic response = committed to 1 billion vaccine doses
  • climate change = commitment to limiting global temperature rises to 1.5 degrees, net zero carbon emissions by 2050
95
Q

What are some criticisms of the G7?

A
  • its membership reflects an outdated vision of the worlds economic powers
  • the scope for the G7 to achieve major breakthroughs is limited
  • G7’s flexibility and informal approach makes it difficult to hold its members to account
96
Q

What is the main argument for reform of the G7?

A

widen its membership to include other significant emerging and established economic powers

97
Q

When was the G20 created?

A

1999

98
Q

Why was the G20 created?

A

to expand the G7 to include a wider group of industrialised states and emerging economic powers

99
Q

What is the objective of the G20?

A

an informal forum that promotes open and constructive discussion between industrialised emerging market countries on key issues related to global economic stability

100
Q

What are the key features of the G20?

A
  • membership represents both established and emerging economies
  • has key economic IGOs attending its meetings
  • agenda has become increasingly broad
101
Q

How is the G20 more effective than the G7 has an informal forum?

A
  • it is a balance between traditional, historic powers, newly emerged economic powers and emerging economic powers
  • includes more states that do not always agree with each other
  • inclusion of an partnership with the major Bretton Woods economic IGOs has benefits
  • widening of the agenda to include non-economic matters
  • has taken decisive action on both economic and non-economic matters
102
Q

What are the main criticisms of the G20?

A
  • meetings have often been a focal point for anti-capitalist protests
  • G20 outcomes are ‘watered down’ or ‘lowest common denominator’
  • prioritising the needs of its member states and defending the interests of global capitalism

Politics: Global Politics (10 decks)

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