Unit 5 Flashcards
Economic Globalization
economic networks that are growing more interconnected, a worldwide market with actors unconstrained by political borders, and a reduction in state control over economies- has deepened cross-national connections among workers, goods, and capital and has caused challenges for regime and cultural stability.
International Monetary Fund (IMF)
an international organization of 190 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
World Bank
an international organization dedicated to providing financing, advice, and research to developing nations to aid their economic advancement. The bank predominantly acts as an organization that attempts to fight poverty by offering developmental assistance to middle and low income countries.
World Trade Organization (WTO)
the only global international organization dealing with the rules of trade between nations, intergovernmental organization that regulates and facilitates international trade between nations.
multinational corporation (MNC)
a corporate organization that owns or controls production of goods and services in at least one country other than its home country.
Neoliberalism
a political approach that favors free-market capitalism, deregulation, and reduction in government spending.
market forces
the actions of buyers and sellers that cause the prices of goods and services to change without being controlled by the government: the economic forces of supply and demand. The value of these commodities is determined by market forces.
Special Economic Zones (SEZs)
Privatization
Privatization
converting government-owned industries to business run with free market forces that are owned and operated by private investors. Ex. Mexico encourages more competition against PEMEX (state owned in 1938) to defer costs and increase oil production.
Nationalization
government-owned industries run without free-market forces Ex. Russia and Yukos Oil (privately owned by Mikhail Khodorkovsky) but forced to sell Gazprom (Russia’s state owned oil company). Small private are allowed to operate, but state owned businesses are banned from working with MNCs.
Bunkering
illegal siphoning of oil from pipelines Ex. oil in Nigeria and Mexico can lead to greater environmental degradation from oil spills as local people and organized criminal groups attempt to gain economic benefits disproportionately to governmental elites.
Economic liberalization
when a state reduces its economic role and embraces free market mechanisms such as eliminating subsidies and tariffs, privatizing government-owned industries, and opening the economy to foreign direct investment.
Foreign Direct Investment
investment made by a firm or individual in one country into business interests located in another country. Investor establishes foreign business operations or acquires foreign business assets in a foreign company.
Human Development Index (HDI)
An indicator of the level of development for each country, constructed by the United Nations, that is based on income, literacy, education, and life expectancy.
Gross Domestic Product (GDP)
A measurement of the total goods and services produced within a country.
GDP per capita
Gross domestic product divided by the number of people in the population.
Gini Index
A statistical formula that measures the amount of inequality in a society; its scale ranges from 0 to 100, where 0 corresponds to perfect equality and 100 to perfect inequality
International Organization
organizations joined by member states with a common interest such as the IMF, World Bank, and UN.
supranational organization
organizations in which member states grant the governing organization sovereignty over policies typically related to trade such as the Economic Community of West African States (ECOWAS), EU, and WTO.
structural adjustment programs
neoliberal reforms often required by international organizations granting emergency loans to countries that require privatization of state-owned companies, reduced tariffs, and reduced governmental subsidies of domestic industries
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
policies aimed at reducing foreign dependency by raising tariffs and encouraging local production of industrialized products.
Hukou System
A longstanding Chinese system whereby all inhabitants must obtain and carry with them residency permits that indicate where an individual is from and where they may exercise particular rights such as education, health care, housing, and the like.
