Class Notes (808,294)
Canada (493,118)
POLI 244 (343)


5 Pages
Unlock Document

McGill University
Political Science
POLI 244
Jason Scott Ferrell

Globalization, Development, and International Institutions: Normative and Positive Perspectives (Helen V. Milner) Introduction • post-WWII international institutions created to manage world economy and prevent another Great Depression (IMF, World Bank, GATT, WTO) ◦ highly contested and criticized today • critics left: instruments for the domination of the developing countries by rich countries and international capitalism • critics right: usurping the role of the market and easing pressure on developing states to adopt efficient, market-promoting policies • new evidence shows these institutions may not be so beneficial for the developing countries • counterfactuals: ◦ longitudinal comparison: whether a developing country performed as well before it joined the institution as it did after ◦ cross-sectional comparison: if countries belonging to the institution fare better or worse than those countries that do not ◦ BUT selection bias arises if the countries are joining or participating for nonrandom reasons which are not held constant (must be addressed!!) The Role of the International Economic Institutions • the three institutions were designed to help the developed countries create a cooperative and stable world economy in a nonglobalized world • IMF ◦ established to support the fixed exchange rate system from Bretton Woods Conference 1944 ▪ aid countries experiencing difficulties in maintaining their fixed exchange rate by providing short term loans ◦ lender of last resort for crises to avoid competitive devaluations ◦ ensure stable international monetary system ◦ almost universal now (184 members) ◦ Bretton Woods fixed exchange rate system collapsed 1970s ▪ after that, dealt less with the developed and more with the developing nations ▪ provided short and long-term loans with below-market interest rates for countries in economic difficulty ▪ loans had more and more conditions attached (changes to domestic policy and institutions) ▪ made the IMF extremely similar to the World Bank • World Bank ◦ centered on reconstruction and later, economic development (with the International Development Association IDA) ◦ interest-free loans and grants to the poorest developing countries ◦ overlap of missions, proliferation of adjustment loans, expansion of conditions are pressing issues • WTO ◦ promote trade liberalization by fostering negotiations among countries to reciprocally lower their trade barriers and provide information about their trade policies ◦ membership almost global (146 countries) ◦ originally a negotiating forum for developed countries, then it extended to developing ◦ connections between domestic policies and trade barriers ▪ domestic (IP laws, enviro policy, tax laws) affect trade flow ◦ attack on trade barriers ◦ attempts to balance countries' gains and losses ◦ DOHA Round of trade negotiations ▪ specifically to address developing nations The Experience of the Developing Countries • debate because little progress in developing world • if they want help, must liberalize policies toward trade and foreign direct investment (FDI) ◦ but does that promote development? ◦ much lending, little adjustment, little growth • increased gap between developed and developing as growth is smaller for developing • debt problems of the developing increased • developing have upgraded their role in the world economy ◦ now producers and exporters of manufactures • Would the performance of these countries have been better, the same, or even worse had these institutions not existed? THEORIES ABOUT THE FUNCTIONS AND BENEFITS OF INTERNATIONAL INSTITUTIONS Constraining the Great Powers • the rules, norms, and procedures of international institutions replace to some extent the pursuit of national interest by power • help harness the behaviour of the most powerful states ◦ great powers taking part reassures others that they will not take advantage of them ◦ mixed success for trade in the WTO ▪ developing countries have not gained much from the GATT trade rounds ▪ unbalanced
More Less

Related notes for POLI 244

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.